Silver Is Down 27% From Its High, and Here's Why It Can Still Go Lower
Key Points
The iShares Silver Trust has more than doubled over the past year, due to the soaring price of silver.
Web searches for silver have been declining in recent weeks, which could indicate less interest from retail investors.
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At the start of the year, there was plenty of excitement around silver. The precious metal was soaring and reaching record highs along the way. However, it has declined from the highs it reached in January. While it's still up around $89 per ounce, it's down about 27% from its peak, back when it was up over $121.
The iShares Silver Trust (NYSEMKT: SLV), which tracks the price of silver, is up an impressive 25% thus far in 2026, far better than the S&P 500, which is down about 1%. Whether it continues to be such a stellar, market-beating investment, however, will inevitably depend on the price of silver. And the problem is that it could decline as the year goes on.
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Why the price of silver could be heading lower
Silver can be a safe-haven asset to hang on to in normal years. But the past year hasn't been a typical one at all, with silver acting more like a meme investment rather than a safe option for investors. That adds a bit more risk and volatility to the picture, which is why even if investors flock to safe-haven investments this year and market volatility, silver may not necessarily benefit from that.
How the precious metal performs will likely depend more heavily on how much interest there is from retail investors. The problem I see is that interest in silver appears to be declining as web searches for it are down significantly (more than 60%) from late January, when interest was its highest over the past year.
Investing in other assets could prove to be a better move for investors
Although the iShares Silver Trust has soared more than 170% in the past year and has proven to be an excellent investment during that stretch, that doesn't mean the pattern will continue. Past returns don't predict future performance.
If you've made a solid profit from investing in silver, it may be a good time to consider cashing out, given the potential for a decline. When a stock or other type of investment surges so much so quickly, there's always the risk that it can come down just as fast. Speculation has driven up the price of silver to levels that may prove unsustainable, which is why now may be a good time to sell and consider investments that are more reasonably valued, or at least have much more upside in the long run.
Investing in dividend or growth stocks can be a much better move for the long term than holding investments closely tied to silver, which may have already peaked.
Should you buy stock in iShares Silver Trust right now?
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David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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