WisdomTree Silver 3x: A Slashed Deficit Forecast and a Resolute Fed Weigh on Silver

WisdomTree Silver 3x ETC plummets as silver drops under $76 on higher inflation and an 80% cut to UBS's 2026 supply deficit forecast. Next support at $70.

The WisdomTree Silver 3x Daily Leveraged ETC has been hit hard as a perfect storm of macro headwinds and a sharply downgraded supply deficit forecast batter the metal. The triple?leveraged product has magnified the pain for holders after silver tumbled below the $76 mark, extending losses from an already brutal Friday session.

The immediate trigger was a double dose of inflation data that crushed any lingering hope for near?term Fed easing. US producer prices surged in April at the fastest pace since 2022, while the consumer price index climbed to 3.8 percent — above the 3.7 percent consensus and the highest reading since May 2023. The reaction was swift: ten?year Treasury yields rose to around 4.6 percent, and silver, which offers no yield, became far less attractive. July futures collapsed by more than nine percent on Friday.

For the WisdomTree product, which tracks daily silver moves at three times leverage, the damage has been brutal. Physically backed vehicles such as the iShares Silver Trust also shed nearly nine percent in that session. But the leveraged structure amplifies every downturn, and with silver now trading under $76, the next chart support at $70 is in focus. A break there could open the door to a slide toward $60 — or even $54.50 if tokenized iShares Silver Trust prices are any guide.

Yet the sell?off is not solely a function of interest?rate fears. The structural bull case for silver has taken a significant blow after UBS slashed its estimate for the 2026 global supply deficit by roughly 80 percent — from 300 million ounces down to just 60–70 million ounces. The bank also cut its 2026 investment demand forecast from over 400 million ounces to 300 million ounces. The Silver Institute still expects a sixth consecutive annual deficit, but only around 46 million ounces. That is a far cry from the double?digit million shortfalls that had been a key driver of bullish sentiment earlier in the year.

The bullish camp retains some ammunition. Industrial demand for silver remains structurally intact, driven by data centres, AI infrastructure and electric vehicles. Silver’s electrical conductivity is virtually unmatched, and Chinese solar manufacturers imported 173 percent more silver in March 2026 than the ten?year seasonal average — even as the metal content per module declines. J.P. Morgan, ING and UBS all maintain average price forecasts of $81, $83 and $85 per ounce respectively for the year.

But near?term caution dominates. J.P. Morgan strategist Greg Shearer advised against re?entering the market until “the recent exuberance has been fully shaken out.” The gold?silver ratio compressed from roughly 62:1 to about 55:1 in a single May week — one of the fastest moves in years — which suggests speculative excess that needed to unwind.

The next key event on the calendar is the Federal Open Market Committee meeting on 16–17 June, which will include an updated dot plot — the first since March. There is also the possibility that the meeting will be the first under Kevin Warsh, the designated Fed chair, who is known for his hawkish stance on inflation. Markets have fully priced out any rate cut for this year, and a small faction of traders now sees a hike by December. The June cut probability collapsed from about 48 percent in mid?May to under eight percent after the CPI release.

For holders of the London?listed 3SIL, which manages roughly €330 million and charges a total expense ratio of 0.99 percent, technical levels are critical. Support lines lie at €22.76 and €19.28; a sustained break below the lower level would trigger sell signals. Resistance sits at €31.33. In the silver market itself, the $82–83 zone is the key hurdle for a recovery. A daily close above that could open a path to $85–90. But if the dollar remains firm and the Fed stays on hold, a retreat into the $76–77 support area — and possibly down to $72–74 — becomes a real risk.

Given the daily reset of the leverage, the compounding effect means that in volatile markets actual returns can diverge significantly from three times the index return. For those holding the ETC through this turbulence, the whipsaw has been punishing — and the path ahead depends on whether a thinning physical deficit or a hardened Fed wins the tug?of?war.