The iShares Silver Trust (SLV) experienced a sharp decline of 11.57% during intraday trading on Thursday, significantly underperforming the broader market.

The sell-off in the silver-backed ETF was primarily driven by a drop in the underlying metal's price. Strong U.S. labor market data released earlier dampened investor expectations for near-term interest rate cuts from the Federal Reserve. This development reduced the appeal of non-yielding assets like silver, offsetting any safe-haven demand that might have been spurred by ongoing geopolitical tensions.

Furthermore, the silver market is undergoing notable structural shifts. Significant physical withdrawals from Western vaults, as reported in COMEX data, highlight growing physical demand that is challenging traditional paper-based pricing benchmarks. A sustained premium for silver in Shanghai compared to Western prices indicates a divergence in market dynamics, potentially influenced by capital controls and logistical barriers.