Anyone who has been around commodity markets for a long time, especially precious metals markets, know this absolutely: Prices do not rise forever.
And, when the prices fall, it is rarely pretty.
This has been happening now to anyone who rode precious metals higher when 2026 opened, especially silver and gold, assuming the ride would never end. The market is now really taking the fun away.
Related: Middle East chaos continues to drain your pocketbook
Silver is back to where it began 2026
Silver was mauled on March 19, falling more 8% to $70.97 per troy ounce, its seventh straight daily loss, the longest losing streak since December 2023 Since peaking at $121.785 on Jan. 29, silver has fallen 41.5%.
Gold hasn’t been friendly either, falling 6.3% to $4,588. Since its top at $5,626.80, the yellow metal has dropped 18.5%.
|
Jan 29 Peak |
Mar 19 Price |
% Drawdown |
|
|
Silver |
$121.79 |
$70.97 |
-41.50% |
|
Gold |
$5,626.80 |
$4,588.00 |
-18.50% |
Silver is basically back to where the year began, at $70.63 an ounce. Gold is still up 6% on the year.
When the bombs fell, so did metals prices
The smart money started getting out at the January peaks for both metals for three reasons:
Margin hikes. One catalyst was futures exchanges raising margins — the cash deposits that traders are required to maintain positions. The margins have been raised three times since Jan. 13. Currently, you have to put up 18% on silver and 9% on gold in cash.
Margin increases are used to curb excess volatilityand, by extension, excess speculation.
Geopolitics. Then, Nevada commodities trader Carley Garner says, when Israeli and U.S. bombs and missiles started falling on Iran after Feb. 27, the selling became much more insistent.
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The Fed has its inflation worries
Add to that the Federal Reserve, which pointedly left its key federal funds rate at 3.5% to 3.75% on Wednesday. That’s because most Fed officials are worried that soaring commodity prices and the effects of the Middle East fighting could push inflation rates higher, commodity expert Jim Wyckoff wrote on Kitco News.com.
We say most because Fed governor Steven Miran, a Donald Trump appointee, voted against the Fed’s decision. Miran and Trump believe rates can move lower without reigniting inflation.
Silver and gold markets are affected by a relatively new set of players: investors in exchange-traded funds. They can buy into a fund and not have to put up any margin.
The fund itself, however, has to buy more silver not to distort markets too much.
And ETFs investors can sell out quickly. This clearly has happened since silver peaked in January, says Garnet, a contributor to theStreet Pro. That also forces the ETF to match the investors’ moves
You can see it happening on March19 with the iShares Silver Trust. It closed at $68.70 on March 18 and opened the next day at $61.90, dropped to $60.85 and then finished at $65.68. That was down 4.4% on the day and 40.2% from its 52-week high on Jan. 29.
A boom-and-bust cycle at work
The big break in metals prices is following a classic boom and bust pattern. Likememe stocks a few years ago or the pre-2008 real estate runup and crash.
The pattern has been occurring in many areas of financial markets this year, and there are starting to signs markets are trying to put in bottoms.
The Standard & Poor’s 500 Index was down as many as 66 points on March 19 but started to recover in the afternoon.
Recoveries were also seen in such stocks as Freeport McMoRan, Newmont Corp., Hecla Mining and Coeur Mining.
The recovery started as Israeli Prime Minister Benjamin Netanyahu told a news conference that Iran could no longer enrich uranium or manufacture ballistic missiles. And, he suggested, Israel would help reopen the Strait of Hormuz.
