ProShares Ultra Silver (AGQ), a leveraged exchange-traded fund designed to track twice the daily performance of silver, experienced a sharp intraday plummet of 35.10% during Friday's trading session. The dramatic decline reflects extreme volatility in the silver market and the amplified nature of the fund.
The sell-off was primarily triggered by reports that the Trump administration plans to nominate former Federal Reserve Governor Kevin Warsh as the next Fed Chair. Market participants view Warsh as an inflation hawk, leading to expectations of a less aggressive path for interest rate cuts. This perception boosted the U.S. dollar, increasing the cost of dollar-denominated silver for international buyers and pressuring prices.
Additionally, silver prices had surged significantly in January, rising approximately 39% to 48% year-to-date, creating conditions ripe for profit-taking. Nervous investors moved to lock in gains from the parabolic rally, contributing to the broad-based decline across precious metals. The leveraged structure of AGQ magnified these downward moves, resulting in the severe intraday drop.
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