Spot silver fell approximately 5% to around $71.26 per ounce on April 2 after President Donald Trump’s prime-time address on April 1 pledged to escalate military operations against Iran.
Spot silver was also seen around $71.52 in early trading. Gold fell approximately 2.3% to 2.8% in the same session. Silver’s drop was roughly twice as steep.
The gap tells a story. Gold and silver may both be precious metals, but they are not the same trade. And in this conflict, that difference is starting to matter.
Speaking from the White House on April 1, President Trump said the U.S. would hit Iran “extremely hard” over the next two to three weeks and threatened to target Iran’s electric generating plants and oil infrastructure if a deal was not reached, per CNBC.
“We’re going to hit them extremely hard over the next two to three weeks,” the president said. “We’re going to bring them back to the stone ages, where they belong.”
Markets had been hoping the speech would signal a path toward de-escalation. It did not. Brent crude jumped more than 6% to approximately $107 per barrel in the aftermath. The dollar strengthened. Stocks fell. And metals, which had spent four days recovering, gave it all back.
The divergence between gold and silver comes down to what each metal actually does in the real economy. Gold is primarily a monetary asset, held by central banks, institutions, and investors as a store of value and hedge. Silver is both of those things and something else: an industrial material.
Industrial demand accounts for approximately 59% of total silver usage, with solar panels, electronics, and electric vehicles among the biggest end markets, per UniAthena. When Trump’s speech raised the prospect of a prolonged conflict and more oil price pressure, it was not just precious metal sentiment that shifted. It was the entire industrial demand outlook for silver.
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A stronger dollar and higher yields hurt both metals by raising the opportunity cost of holding non-yielding assets. But silver takes an additional hit when growth fears rise because its industrial demand softens alongside the broader economy.
That double pressure explains why silver’s drop outpaced gold’s by nearly two to one on the day.
“Because a significant portion of silver demand is industrial, a war-induced global economic slowdown could dampen industrial demand, making silver more volatile than gold in a prolonged conflict,” Business Today Middle East noted.
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A war-induced global economic slowdown could dampen industrial demand, making silver more volatile than gold.Shutterstock ·Shutterstock
The April 2 drop did not happen in isolation. Silver had already been under severe pressure since the Iran war began Feb. 28.
The white metal hit an all-time high of approximately $121 to $122 per ounce in late January 2026. By early April, it had fallen to the low $70s, a decline of more than 40% from the peak.
That rally itself was extraordinary. Silver surged roughly 145% in 2025, driven by robust industrial demand from solar panels, electronics, and electric vehicles, as well as investment buying.
The subsequent collapse has been equally dramatic, reflecting just how crowded the trade had become and how sharply the macro environment shifted when war broke out.
Spot silver: Down approximately 5% to $71.26, per Coinpaper
Spot gold: Down approximately 2.3% to 2.8%, according to CNBC
Brent crude: Up more than 6% to approximately $107 per barrel, Al Jazeera reported
Silver’s decline: More than 40% from its January all-time high, per Euronews
The president’s speech pushed oil prices sharply higher, which fed inflation fears. Higher inflation expectations reduce the likelihood of Federal Reserve rate cuts, which in turn pushes Treasury yields and the dollar upward.
Silver, as a non-yielding asset priced in dollars, faces headwinds from both directions.
Markets had previously expected the Fed to cut rates at least twice in 2026. That expectation has now been pushed to late in the year at the earliest. Every time that timeline shifts further out, the pressure on non-yielding metals increases.
Iran’s response added no comfort.
A spokesperson for the country’s Revolutionary Guards said American and Israeli strikes had not destroyed key military capabilities, including missile production centers and air defense systems, per CNBC.
With no ceasefire in sight and oil supply disruptions continuing through the Strait of Hormuz, the combination of macro headwinds facing silver is unlikely to ease quickly.
The long-term structural case for silver, rooted in its role in solar energy, electric vehicles, and AI infrastructure, remains intact, according to analysts.
But in the near term, silver is caught between a slowing industrial demand outlook and a monetary environment that punishes non-yielding assets. That is a difficult position amid a war that continues to push oil prices higher.
Related: Silver price today: This warning is bigger than most think
This story was originally published by TheStreet on Apr 3, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.
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