Why is iShares Silver Trust slipping today and what comes next?

The iShares Silver Trust (SLV) is facing heavy selling pressure on Friday primarily because of the leadership transition at the US Federal Reserve.

Today marks the official end of Jerome Powell’s term as Fed Chair.

The transition to Kevin Warsh, President Trump’s nominee, has triggered a “sell the news” sentiment for two big reasons.

Versus its year-to-date high, the SLV exchange-traded fund (ETF) is now down roughly 35%.  

What’s hurting iShares Silver Trust today?

The iShares Silver Trust is in the “red” this morning due to Warsh’s reputation as a “hard money” advocate that’s strengthening the US Dollar Index (DXY) on May 15.

Since silver is priced in USD, a surging greenback makes the metal more expensive for international buyers, leading to immediate liquidations in paper silver (SLV).

Plus, while there were fears initially that a Trump-appointed chair might aggressively cut interest rates, the market has pivoted to a view that Kevin Warsh may maintain a more disciplined approach to the balance sheet.

This has diminished the “debasement trade” – the practice of holding silver as a “hedge” against a devaluing currency, causing speculative capital to exit SLV.

On Friday, the iShares Silver Trust slipped through its major moving averages (MAs) as well, which further accelerated the downward momentum.

Should you buy the dip in SLV fund?

Despite the sharp pullback, HSBC recommends that investors practice caution in buying the dip.

In a research note this week, the firm’s chief precious metals analyst, James Steel, told clients that silver remains fundamentally overvalued.  

He pointed out that the global silver supply deficit is narrowing significantly – dropping from 143 million ounces last year to a projected 73 million in 2026.

This deficit compression – coupled with weakening industrial demand in photovoltaic and jewelry sectors – suggests the metal’s cross-cycle momentum is fading.

With the gold/silver ratio likely to widen and “speculative froth” still clearing from the market, the investment firm believes silver prices could trend lower through the second half of 2026.

The road ahead for silver investors

As the Warsh era begins at the Federal Reserve, the near-term outlook for the iShares Silver Trust remains clouded by macroeconomic shifts.

While silver’s role in the global energy transition, specifically within AI-driven hardware and solar infrastructure, provides a long-term floor, the immediate focus has shifted to the “real yield”.

If the US dollar maintains its current trajectory and the US central bank signals a commitment to quantitative tightening, the pressure on non-yielding assets like SLV may persist.

Importantly, the iShares Silver Trust’s relative strength index (RSI) sits in the mid-40s currently – reinforcing that it remains far from the “oversold” territory.

Investors should watch for a consolidation phase near the 200-day moving average (MA) before considering a new entry.