ProShares Ultra Silver (AGQ) experienced a significant pre-market decline of 5.29% on Monday, mirroring a broader downturn in precious metal-related assets.
The sharp drop follows heightened geopolitical tensions after former President Trump ordered a naval blockade of the Strait of Hormuz, signaling a potential escalation in U.S.-Iran conflict. This development led to a surge in oil prices, fuelling inflation concerns and dampening market expectations for Federal Reserve interest rate cuts this year. Concurrently, a stronger U.S. dollar exerted additional downward pressure on dollar-denominated commodities like silver.
These combined factors created a negative environment for leveraged silver ETFs like AGQ during the pre-market session, as investors reacted to the increased macroeconomic uncertainty and its implications for monetary policy and commodity prices.