On June 24, ProShares Ultra Silver ETF (AGQ) fell 8.61% in pre-market trading, trading at $67.8816/share, with turnover of $18.60 million. The decline reflects the sharp selloff in underlying silver prices, which dropped to $60.70/oz — the lowest level since December last year.
The core driver behind silver's collapse is a dramatic shift in Fed policy expectations. CME FedWatch data shows traders now price an 86% probability of a Fed rate hike by December, a stark reversal from earlier expectations of two rate cuts. Bank of America projects three 25-basis-point hikes in September, October, and December. The US dollar index surged to a 13-month high near 101.50, further pressuring dollar-denominated commodities.
Rising rates increase the opportunity cost of holding non-yielding assets like silver, while a stronger dollar makes silver more expensive for overseas buyers, suppressing both investment and physical demand. Spot silver has now fallen over 50% from its January high. Multiple Chinese banks have also raised margin requirements for precious metals trading, with some planning to suspend personal precious metals business entirely.
ProShares Ultra Silver ETF seeks daily investment results that correspond to two times the daily performance of silver bullion. It does not invest directly in any commodity, instead using financial instruments including swap agreements, futures contracts, and options.
(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)
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