Silver Falls 26% After a Crowded Trade Breaks on Fed Shift

The devil’s metal is living up to its nickname. Silver is down roughly 26% from last week’s highs as the unwind reinforced the metal’s reputation for extreme volatility relative to gold. The carnage stemmed from an overcrowded trade that snapped after President Trump nominated hawkish, dollar-positive Kevin Warsh to lead the Fed — with losses accelerating as Chinese speculators flipped in Shanghai’s night market.
- ProShares Ultra SilverAGQ crashed 63% on Feb. 1 and was forced to dump an estimated $4B in silver futures, deepening the metal’s freefall.
- “The trade was way too crowded,” said former JPMorgan metals trader Robert Gottlieb, noting that risk aversion drained liquidity and worsened the unwind.
Salvaging commodity sentiment: Beyond silver, other metals also came under pressure. Deutsche Bank analyst Michael Hsueh maintained a $6K-per-ounce gold target, arguing conditions “do not appear primed for a sustained reversal” as key thematic drivers remain intact. Platinum and palladium also retreated as the broader commodity complex weakened. Early stabilization emerged Monday as retail buyers snapped up physical bars and coins, though silver analyst Rhona O’Connell warned the white metal “is always a death trap” given its wild swings in a market much smaller than gold.