Beyond the AI Selloff
Monitoring disruption by sector
Off the desk | Multi-Strategy | March 2026
The Silver Selloff:
An important reminder on the value of diversification
At the end of January, markets witnessed one of the largest weekly price ranges in the history of precious metals, most notably in silver. On January 28, 2026, silver’s spot price sat at $116.6 USD per ounce, having surged 68% in January alone. The selloff began on January 30th and by midday, its price had plunged by as much as 35%, marking silver’s largest one-day drop in history. By the time the trading session ended, silver’s price had dropped 26% to $85 USD per ounce.1 Much of the sharp decline was driven by a sudden decrease in perceived political risk (thanks to the designation of Kevin Warsh as the upcoming Federal Reserve Chairman) and the rapid unwinding of speculative, crowded positions in silver. Episodes like this remind investors that even traditional stores of value can experience significant short-term volatility.
For long term investors, however, precious metals still serve a strategic purpose. Precious metals represent one component of a broader effort that can help hedge inflation risk and preserve purchasing power. Their role seeks to offer protection across cycles when confidence in fiat currencies or policy frameworks weakens. Distinguishing between tactical price action and strategic allocation is critical.
We keep a close eye on inflation because it can help inform our strategic asset allocation and tactical decisions, but it’s important to understand that not all inflation is the same. Inflation can take two forms: it can manifest as monetary debasement, where expansive fiscal and monetary policy erodes currency value over time, and it can also appear as rising consumer prices that directly impact consumer purchasing power. These forces are linked, but they do not always move together. Precious metals can respond to both dynamics, but they are also influenced by real interest rates, currency movements, and investor positioning. This complexity reinforces why we seek measured exposure rather than concentrated bets.
In our view building a resilient portfolio means seeking balance between these different aspects of inflation. Rather than relying solely on a single asset class, we take a diversified approach to tackling inflation by combining precious metals with other commodities, fixed income strategies, and other alternative assets and strategies with the aim to create a more durable inflation defense. Risk balancing across these exposures can allow portfolios to participate in inflationary upside while mitigating the impact of abrupt reversals in any one segment.
Ad hoc chasing of individual themes such as silver, cocoa, or other “flavour of the month” trades is inherently challenging without a holistic framework. Periods of extreme price range expansion often attract attention at precisely the wrong time.
Violent selloffs like this serve as a useful reminder why thoughtful portfolio construction grounded in macro awareness and disciplined risk management remains one of the most effective ways to navigate inflation uncertainty.
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1 https://global.morningstar.com/en-nd/markets/why-are-gold-silver-plunging
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