Silver prices suffered their steepest single-day decline in over three years on Friday, tumbling 15% to trade around $26 per troy ounce as a global flight from risk assets gathered pace. The precious metal is now testing a critical support zone that, if broken, could open the door to further losses, analysts warned.
The sell-off was triggered by a combination of factors: a resurgent US dollar index hitting a 20-month high, hawkish comments from Federal Reserve officials signalling further rate hikes, and deepening worries about a slowdown in Chinese manufacturing demand. Industrial metals have been particularly hard hit, with copper falling 8% and platinum shedding 12% in the same session.
For UK investors, the slide in silver has direct implications for diversified portfolios and pension funds with exposure to commodity ETFs or mining stocks. Fresnillo, the London-listed silver producer, saw its shares drop 18% by midday, while other miners such as Hochschild Mining and Endeavour Mining also recorded heavy losses. The FTSE 350 Mining Index fell 6.5%, dragging the broader FTSE 100 down 1.8% to 7,942 points.
“Silver is caught between two powerful forces: a stronger dollar that makes it more expensive for non-US buyers, and fears that global industrial activity is stalling,” said Rachel Harding, senior commodities analyst at London-based Oakley Capital Markets. “The $25 level is now the line in the sand. If that breaks, we could see a retest of the $22 area.”
The rout has also reignited debate about the role of precious metals as a hedge in multi-asset portfolios. While gold has historically been seen as a safe haven, its 4% decline on Friday suggests that even traditional stores of value are not immune when liquidity dries up. The silver market’s smaller size and higher volatility amplify moves in both directions, making it a double-edged sword for retail investors.
UK pension schemes with significant allocations to commodity indices or mining equities may see short-term valuation pressure, though diversified funds with broader exposure are likely to be cushioned by gains in defensive sectors such as utilities and healthcare, which rose modestly on the day.