Sharp Decline in Silver Prices After Trump Delays Metal Tariffs

SadaNews - Silver prices fell sharply amid signs of profit-taking by investors after a record rally, following the United States' decision to refrain from imposing tariffs on essential metal imports.

The white metal fell by as much as 7.3% on Thursday after reaching an all-time high of $93.7515 earlier, having risen over 20% during the previous four sessions. Gold also declined.

Concerns about potential U.S. tariffs on silver, platinum, and palladium eased temporarily after U.S. President Donald Trump stated that he would negotiate bilateral agreements to ensure the availability of sufficient supplies of essential metals.

He also proposed the idea of implementing minimum price limits on imports, instead of relying solely on percentage-based tariffs, in an effort to develop supply chains, although he did not rule out imposing tariffs in the future, according to a statement released late Wednesday.

Daniel Ghali, chief commodity strategist at TD Securities, wrote in a note that "this indicates that the administration will take a more nuanced and selective approach in future decision-making."

He added that this "significantly alleviates concerns about adopting a broad-brush approach that could inadvertently affect the core bullion underpinning standard metal prices."

Sharp Volatility and the Role of Technical Factors

A broad rally in metal markets drove silver and gold prices to new highs on Wednesday, alongside copper and tin, as investors turned to tangible assets amid a backdrop of geopolitical and economic risks and supply concerns. Frenzied buying in China and the U.S., combined with a broader shift toward commodities, boosted demand for these metals.

Silver has experienced sharp volatility in recent weeks, with the 14-day average true range rising, indicating market fluctuations. Much of this is attributed to technical factors rather than fundamental drivers.

Oli Hansen, head of commodity strategy at Saxo Bank, stated in a social media post that "much of what traders see on their screens reflects forced flows, margin dynamics, hedging via options, and covering short positions, more than it reflects real pricing based on supply and demand."

He added: "In such an environment, technical levels lose their reliability, stop-loss orders are easily triggered, and even accurate macroeconomic insights struggle to withstand short-term noise."

Political Pressures Provide Price Support

Renewed threats from Trump towards the Federal Reserve have supported precious metals by reviving trading in "selling U.S. assets." The arrest of the Venezuelan president, Trump's repeated threats to take control of Greenland, alongside the fragile situation in Iran, have also bolstered demand for safe havens.

Silver dropped 6% to $87.7795 per ounce by 1:00 PM Singapore time. Gold fell by 0.7% to $4591.51 per ounce. Platinum and palladium prices also decreased by over 2%, while the Bloomberg Dollar Spot Index held steady.

According to the latest Markets Pulse survey, the gold rally is expected to continue beyond January. While silver and copper have reached similar levels, signs are emerging of declining flows into these metals as investors reassess the sustainability of supply constraints.