Silver retreats as Trump delays tariffs on critical minerals

Silver pulled back after investors booked profits following a strong rally, alongside signals that the U.S. administration will refrain from imposing import tariffs on key minerals for the time being.

The white metal fell by up to 7.3% on Thursday, after earlier reaching a record high near $93.75 per ounce. The decline follows a surge of more than 20% over just four consecutive sessions. Gold also edged lower.

U.S. President Donald Trump stated that the administration will negotiate bilateral agreements to secure sufficient supplies of critical minerals. He left the door open to price floors, but currently has no plans to implement tariffs. Concerns over such measures over the past year have led to a portion of supplies, including silver, being held in U.S. warehouses. This has contributed to a global shortage, which is expected to continue supporting prices into 2026.

Last year, silver outperformed gold, surging nearly 150%. Some investors rotated into silver after gold became relatively expensive. Additional support comes from industrial demand, particularly from the solar sector, where silver is used in panel production. Speculative activity in China has also boosted upward momentum in recent weeks.

According to Christopher Wong, strategist at Oversea-Chinese Banking Group, the medium-term outlook for silver remains positive, supported by tight supply, stable industrial demand, and spillover interest from gold. At the same time, the speed of recent moves calls for caution in the short term.

Gold and silver have benefited from broader commodity interest this week, which has also pushed tin and copper to record levels. Pressure from the Trump administration on the Federal Reserve has supported prices and revived the so-called “sell America” strategy. Geopolitical risks—including tensions in Venezuela, Greenland, and Iran—have also strengthened demand for safe-haven assets.

In recent weeks, silver has shown sharp swings, with volatility indicators rising. This is largely attributed to technical factors, rather than fundamental changes in supply and demand.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, notes that much of the movement reflects forced flows, margin requirements, option hedging, and short-covering, rather than true market equilibrium. In such an environment, technical levels become less reliable, and short-term noise dominates over macroeconomic arguments.

Markets are also closely monitoring a U.S. Department of Commerce investigation into whether imports of silver and other critical minerals threaten national security. Trump’s decision to delay potential tariffs suggests a more targeted approach in future decisions, reducing the risk of broader market disruptions.

By early afternoon in Asia, silver traded around 6% lower, dipping below $88 per ounce. Gold fell just under 1%, while platinum and palladium also traded lower. The U.S. dollar index remained relatively stable.

According to the latest Markets Pulse survey, gold’s rally is expected to continue beyond January. For silver and copper, however, there are signs that some capital flows are easing, as investors assess how long supply constraints may persist over the longer term.

-Source: Bloomberg Terminal