Shares of the SIL silver ETF plunged by more than 28% in a single session, marking the most severe daily drop since March 1980. This move was driven by a sudden unwind of highly leveraged long positions in both spot and futures markets, where silver futures contracts fell over 31%. The extreme volatility inflicted substantial losses on retail investors and commodity refiners who had ramped up inventories in anticipation of sustained price gains.

The sell-off followed a brief period in late January during which SIL shares had surged by nearly 38% year-to-date, as a wave of retail traders piled into silver via retail broker platforms and exchange-traded products. On Thursday alone, more silver options contracts changed hands than those on the largest U.S. single-stock exchange, underscoring the outsized role of speculative, short-term flows. Bank of America commodities strategists estimate that, absent this retail impulse, silver’s fair value based on industrial demand models would sit roughly 50% below recent traded levels.

Despite the recent rout, some strategists maintain a bullish two-year target for silver near a 170:1 ratio versus gold, contingent on continued retail participation and a reversion of the gold-to-silver ratio toward historical norms. However, the disconnect between social-media-driven sentiment and fundamental supply-demand balances—particularly the modest growth in mine output and steady industrial consumption—raises questions about the sustainability of any rapid rebound in SIL shares.