Triple-Leveraged Silver ETC Hit by 31% Rout as Macro Headwinds Drown Out a Sturdy Deficit

The WisdomTree Silver 3x Daily Leveraged ETC suffered a one-day loss of roughly 31% on Friday, an extreme swing even by the standards of leveraged products. The catalyst was a brutal selloff in silver itself — futures tumbled more than 9% to settle at $77.55 an ounce, after briefly dipping below $77 and compared with a recent high above $84. Some price feeds showed an even steeper decline, with spot silver dropping over 8% to around $76.

The leveraged structure magnified the move threefold, as designed. In London the ETC closed at $17.45, while in Milan it ended at €15.03. The week had begun on a much brighter note: the ETC had surged more than 17% on Wednesday, but by Friday those gains had been entirely eclipsed.

Several macroeconomic headwinds converged to punish precious metals. US Treasury yields hovered near a one-year high, and the dollar strengthened — both factors that make non-yielding assets such as silver less attractive. Additionally, crude oil spiked above $109 a barrel on renewed tensions in the Strait of Hormuz, stoking fresh inflation concerns. That inflation narrative was already well entrenched: US producer, import and export prices accelerated in April at the fastest pace since 2022, and the consumer price index rose 3.8% year-on-year, exceeding consensus estimates. Markets, as tracked by the CME FedWatch Tool, now see a 50% probability of a rate hike in December, with cuts effectively off the table.

A structural demand shock from Asia added to the pressure. India, one of the world’s largest bullion consumers, raised import duties on gold and silver from 6% to 15% on May 13. The move dampens physical demand from the subcontinent, and analysts reckon the market only belatedly priced in the implications.

The deteriorating macro outlook prompted UBS to slash its silver price forecasts just days before the crash. The bank lowered its Q2-2026 target from $100 to $85, trimmed its September projection from $95 to $85, cut the year-end view from $85 to $80, and reduced the March 2027 estimate from $85 to $75. UBS also sharply revised its global supply deficit estimate for 2026, shrinking it from an earlier 300 million ounces to a range of 60 to 70 million ounces, citing weaker industrial demand and rising mine output.

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Yet the fundamental picture for silver is far from collapsing. The World Silver Survey projects a deficit of 46.3 million ounces for 2026 — the sixth consecutive shortfall year — underpinned by sustained demand from electronics and solar panel manufacturing. The Silver Institute echoes that outlook with a similar deficit forecast of about 46 million ounces. The tension between these structural tailwinds and the macro headwinds creates a uniquely volatile environment, especially for a high-beta instrument like the triple-leveraged ETC.

Trading activity on Friday was elevated: roughly one million units changed hands in Milan and about 569,000 in London. From a technical perspective, the picture is mixed. The primary London listing shows an RSI near 39 and a bearish MACD crossover, with near-term support at $16.06 and $14.58, and resistance at $17.74 and $19.39. Meanwhile, a separate technical analysis that had been in effect prior to the crash still registers buy signals based on longer-term support levels of $22.76 and $19.28. That earlier buy signal, triggered on March 26, had lifted the ETC by more than 105% before this week’s reversal.

The gold-silver ratio, which had compressed from around 62:1 to below 55:1 earlier in the week after the US-China tariff truce, snapped back sharply to 58.9:1 on Friday. Silver’s dual nature as both an industrial metal and a monetary asset leaves it especially exposed when different forces pull in opposite directions.

For now, any meaningful recovery in the ETC depends on a retreat in the dollar and clearer signals that the Federal Reserve will not tighten policy further. Neither outcome is guaranteed in the week ahead.