Investors in WisdomTree's 3x Silver ETF Endure 13% Weekly Loss as Fed's Inflation Warning Douses Safe-Haven Rally
Published on 07/11/2026 at 06:13 | Redaktion boerse-global.de
The WisdomTree Silver 3x Daily Leveraged ETF closed Friday at $7.45, capping a week that saw the product swing violently between a geopolitical spike and a monetary-policy hangover. The three-times leveraged vehicle lost 2.84% on the final session alone, bringing the weekly decline to 12.80% and the 30-day rout to 26.90%.
Thursday offered a starkly different picture. Reports of US airstrikes against targets in Iran sent the ETF soaring 10.29% in a single day, as oil and silver both surged on fears that shipping through the Strait of Hormuz — reportedly operating at half capacity — would be severely disrupted. Investors piled into safe havens, and the leveraged structure magnified the move.
That relief proved short-lived. By Friday, markets had pivoted back to the Federal Reserve, which delivered a congressionally mandated report on July 10 — the first under Chair Kevin Warsh — warning that inflation risks have “intensified.” The central bank identified three main drivers: tariffs, the Iran conflict, and a massive surge in AI-related investment, which alone is projected to reach roughly $1 trillion in 2026. The report helped explain why the Fed is sticking to a tight policy stance despite rising geopolitical uncertainty.
Minutes from the Fed’s June meeting, released earlier in the week, had already stirred unease. Although the decision to hold the federal funds rate at 3.50%–3.75% was unanimous, the minutes revealed a more divided committee than the vote suggested: nine of 18 members now see at least one more rate hike this year. The CME FedWatch Tool puts the probability of a September increase at 52.7%, a prospect that is supporting the dollar and pushing the yield on 10-year US Treasuries toward the 5% threshold — headwinds for non-yielding assets like silver.
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The geopolitical backdrop itself then shifted. US President Donald Trump declared the previous memorandum with Tehran “over” but confirmed that technical talks were still ongoing, easing the immediate conflict premium. Crude oil WTI slipped back to around $72 a barrel, removing a key catalyst that had been boosting silver alongside inflation fears. Meanwhile, some analysts at Metals Focus argued that markets had overstated the likelihood of further rate hikes late in 2026. The dollar index held near a three-week low of 100.60, providing a modest counterweight.
JPMorgan also weighed in, cutting its silver price forecast for the rest of the year to a range of $60–$65 per ounce, citing a “shaking out of the overreaction” after the extreme volatility in the first half of 2026, when spot silver briefly hit an all-time high of $121.62. The spot price has since corrected sharply and ended the week oscillating between $58 and $60.
Yet the physical market tells a very different story from the short-term price action. The World Silver Survey 2026, compiled by the Silver Institute and Metals Focus, projects a sixth consecutive year of supply deficit, estimated at 46.3 million ounces. Industrial demand from the clean-energy sector has been a key driver, though a curious phenomenon — what analysts call the “solar paradox” — is emerging. Solar-cell manufacturers are reducing the silver content per unit (thrifting) to cope with high raw-material costs, leading to a 19% drop in photovoltaic demand to roughly 151 million ounces. Still, even with that decline, the overall deficit remains intact, forming what many see as a fundamental floor under the metal.
Technically, the leveraged ETF is flashing exhaustion. The 14-day relative strength index has dropped to 35.8, approaching oversold territory at 30, while the annualized 30-day volatility stands at a staggering 157.47%, underscoring the risk profile of such products. Physical premiums in Shanghai continue to trade at around 11% above international prices, but the western futures market remains more fixated on interest-rate expectations than on physical tightness.
Investors now await the next major catalyst: the US Consumer Price Index report for June, due on July 14. A hotter-than-expected print would likely reinforce rate-hike bets and pile further pressure on silver — and by extension, on the triple-leveraged fund that amplifies every move.
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