Silver Crashes Over 50% From January Record High Amid Rate Hikes
Silver prices have plummeted nearly 50% from their January record high of $121.62 per ounce to around $61 an ounce, while gold has only dropped about a quarter from its peak. The gold-silver ratio, which measures how many ounces of silver it takes to buy one ounce of gold, has widened to its highest level in months.
The sharp decline in silver prices is largely attributed to the same rate story that's pressuring gold, as well as traders who piled into silver as a leveraged bet on gold and are now unwinding their positions. The proximate trigger for the sell-off has changed from Iran-related tensions and falling rate expectations to higher rates and a stronger dollar.
However, despite the recent selloff, the bull case for silver remains intact. The Silver Institute estimates that data center-related silver demand will reach 20-30 million ounces annually by 2026, driven by the metal's use in high-density circuit boards and thermal interface materials for AI hardware.