Silver Drops as Trump Delays Tariffs on Key Minerals

Silver Prices Slide After Rapid Surge

Silver prices dropped sharply as investors cashed in profits following a dramatic rally, coinciding with the US decision not to implement import tariffs on key minerals.

On Thursday, silver tumbled by up to 7.3% after reaching a record high of $93.75 earlier in the day. This decline came after the metal soared over 20% in the previous four sessions. Gold also experienced a downturn.

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President Donald Trump announced plans to negotiate bilateral deals to secure supplies of vital minerals, suggesting the possibility of price floors but not dismissing tariffs entirely. Concerns over potential tariffs have led to stockpiling of metals like silver in US warehouses, fueling a global supply squeeze last year and supporting prices into 2026.

Silver outperformed gold last year, surging nearly 150% as investors shifted focus from gold, which had become costly. The metal also benefits from strong industrial demand, especially in the solar sector, and recent speculative buying in China has further boosted prices.

Market Outlook and Volatility

According to Christopher Wong, a strategist at Oversea-Chinese Banking Group, the outlook for silver remains positive due to ongoing supply shortages, robust industrial use, and continued interest from gold investors. However, he cautioned that the recent rapid price movements call for short-term vigilance.

This week, both gold and silver have attracted significant investment as part of a broader surge in commodities, with prices for precious metals, tin, and copper reaching new highs. Political developments, including renewed criticism of the Federal Reserve by the Trump administration, the US’s actions regarding Venezuela and Greenland, and tensions in Iran, have all contributed to increased demand for safe-haven assets.

Silver has experienced heightened volatility lately, as indicated by a spike in its 14-day exponential average true range. This instability appears to be driven more by technical trading factors than by changes in supply or demand fundamentals.

Ole Hansen, head of commodity strategy at Saxo Bank, noted that much of the recent trading activity is influenced by forced flows, margin calls, option hedging, and short covering, rather than genuine price discovery. In such an environment, technical signals become less reliable, stop-losses are frequently triggered, and even well-founded market views can be disrupted by short-term fluctuations.

Further Developments and Analyst Insights

Market participants were closely monitoring the outcome of a US Commerce Department investigation into whether imports of silver and other essential minerals posed a threat to national security.

Daniel Ghali, senior commodity strategist at TD Securities, commented that Trump’s decision to delay tariffs indicates a more targeted approach to future policy decisions. This move has eased concerns about broad measures that could have unintentionally affected the underlying assets supporting benchmark metal prices.

As of 1:00 p.m. in Singapore, silver had dropped 6% to $87.78 per ounce, while gold slipped 0.7% to $4,591.51. Platinum and palladium also saw declines of over 2%. The Bloomberg Dollar Spot Index remained stable.

According to the latest Markets Pulse survey, gold’s upward trend is expected to continue beyond January. While silver and copper have also reached significant milestones, there are indications that investor interest in these metals may be waning as concerns about sustained supply constraints persist.

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