Death Cross and CPI Jitters Drive Triple-Leveraged Silver ETF to 33% Weekly Rout

The leveraged silver ETF lost a third of its value in seven sessions as a death cross and hawkish Fed expectations drive selling. Key support at $60.32.

The WisdomTree Silver 3x Daily Leveraged ETF has been pummelled by a confluence of technical and fundamental headwinds, shedding 33.59% of its value over the past seven trading sessions. The product closed Wednesday at $10.20, down another 3.82% on the day, as traders fled precious metals exposure ahead of the US May inflation report and a deteriorating chart picture.

Technical breakdown adds to selling pressure

Silver’s spot price has slumped well below its 20-, 50- and 200-day moving averages, triggering what chartists call a death cross — the moment when the short-term moving average slices beneath its longer-term counterpart. That technical signal has injected fresh downward momentum. The metal recently fell under $65 an ounce, having already dipped below $64 in the run-up to the CPI release. The next critical support level sits at $60.32; a breach there could open the floodgates toward the $50 zone, a move that would be punishing for leveraged products.

With an annualised 30-day volatility of 122.81%, even modest daily moves in silver futures can translate into outsized swings. The product aims to deliver three times the daily performance of the Solactive Silver Commodity Futures SL Index, which rolls into the nearest COMEX front-month contract each month. It achieves this through fully collateralised swaps, with BNY Mellon holding the collateral in segregated accounts.

Macro pressure: inflation and rate expectations

The sell-off has been fuelled by mounting fears that the Federal Reserve will keep monetary policy tight. The central bank’s current target range of 3.50% to 3.75% already restricts zero-yielding assets, and strong economic data is strengthening the case for further tightening. The US added 172,000 jobs in the latest reading, while April inflation came in at 3.8%. Markets now assign a 61% probability to at least one rate hike by October.

Against that backdrop, economists were bracing for the May CPI report, with headline inflation expected to rise 0.5% month over month and 4.2% year over year. Core inflation was forecast at 0.3% monthly and 2.9% annually. Spot silver had already retreated below $64 before the data hit the wires, suggesting the position reduction was pre-emptive rather than a reaction to the print.

Broader metal malaise

The damage is not confined to silver. The MicroSectors Gold ETN, another leveraged precious metals product, shed nearly 5% in the same period, as a strong dollar and rising yield expectations weighed across the sector. WisdomTree itself offers two other silver-linked products: the Silver 2x Daily Leveraged, which uses a lower multiplier, and the Silver 3x Daily Short, designed for those betting on declines.

For now, the survival of the long leveraged fund hinges on whether silver can hold the $60.32 support level and whether the inflation narrative pivots. Until the industrial metal shows a clear stabilisation, the three-times levered structure will remain exposed to the daily volatility of the futures market — a market that shows no sign of calming.