The iShares Silver Trust (SLV) experienced a sharp intraday decline of 5.74% on Wednesday, reflecting a broad sell-off in the precious metals sector.

The plunge was driven by a confluence of factors that increased the opportunity cost of holding non-yielding assets like silver. Market expectations have pivoted towards the Federal Reserve implementing interest rate hikes this year, fueled by persistent inflation concerns and a hawkish tone from the central bank. This shift makes yield-bearing assets more attractive relative to silver. Simultaneously, the U.S. dollar strengthened significantly, reaching multi-month highs, which makes dollar-priced silver more expensive for overseas buyers and further dampens demand.

Additional pressure came from easing tensions between the U.S. and Iran, which reduced the safe-haven appeal of precious metals. Furthermore, several major banks have tightened leverage requirements or halted personal precious metals trading services, intensifying selling pressure in the market. Financial institutions, including ING, have also downgraded their silver price forecasts, citing the challenging environment of rising yields and a stronger dollar.