Or on Saturday, the results of the US 232 tariff investigation will be released! Silver, platinum, and palladium will face "significant uncertainty."
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The results of the US critical minerals Section 232 tariff investigation are expected to be announced this Saturday (January 10), and this decision will have a significant market impact on Comex silver and platinum group metal prices.
According to news from the ZF Trading Desk, on January 8, Citi's Kenny Hu research team believes that if no tariffs are imposed, metals will flow out of the US to other regions, alleviating the current extremely tight market situation and suppressing London spot prices.
In the tariff scenario, there will be an approximately 15-day implementation window, which will trigger a brief "rushing US shipments" behavior, thereby further pushing up US benchmark pricing and Exchange for Physical (EFP) premiums before the tariffs are imposed. After the tariffs are in place and imports decrease, the supply of non-US metals will improve and London spot price pressure will ease.
The investigative results were originally scheduled to be submitted by October 12, 2025, and President Trump has 90 days to take action. This means the deadline is around January 10 (this Saturday). However, Citi believes that given the large number of goods involved, President Trump's actions may be indefinitely delayed, so during this time, silver and platinum group metal prices are likely to continue rising.
As of January 7, EFP pricing shows that the market expects the platinum tariff rate to be about 12.5%, palladium about 7%, and silver about 5.5%. These implied tariff rates reflect market uncertainty amid high volatility.
(Expected tariff rates by EFP pricing)
Silver Likely to Avoid Tariffs, May Face Price Correction
Because the US is heavily dependent on imported silver, the Citi research team prefers the base case where silver is not subject to tariffs, or even if there are tariffs, key exporters such as Canada and Mexico may be exempted.
In the no-tariff scenario, silver prices may face temporary downward pressure.
As seen from historically high lease rates, the non-US market is currently experiencing a severe physical silver shortage. No tariffs would incentivize metal outflows from the US, alleviating global market tightness.
(Lease rates remain at historical highs, indicating extreme tightness in physical market supply)
It is worth noting that the timing of the tariff decision may overlap with the annual index rebalancing window.WallstreetCN mentioned that the Bloomberg Commodity Index (BCOM) annual rebalancing will begin after market close on January 8 and last until the 14th.
Citi expects about $7 billion in silver outflows, equivalent to about 12% of Comex's open interest. At that time, improved market liquidity and softening prices due to US outflows may also temporarily suppress investor demand (such as ETFs).
Palladium Most Likely to Face High Tariffs, Platinum Outlook Uncertain
The Citi research team believes that among the three metals, palladium is most likely to be subject to tariffs. The main reasons are twofold:
Potential to increase domestic US supply: There is potential for the US to increase palladium supply domestically, for example, by expanding mining or refining activities for domestic nickel or platinum, which could yield more palladium as a by-product. This reduces reliance on external imports, making tariffs more feasible from an industrial policy standpoint.Powerful industry lobbying: Relevant US industries (like auto catalyst manufacturers or mining companies) have strong political lobbying power and may support tariffs to protect domestic industries or stimulate local investment.
Therefore, the report's base case is that palladium will face a high tariff rate, such as 50%. The research notes that if a high tariff is imposed on palladium, prices will surge in the short term, and the cost of palladium imports into the US will rise sharply, driving up US benchmark futures prices and EFP (spot-futures spread).
In the long term, a “dual market” will form between the US and other regions, permanently altering trade flows and pricing logic. This means:
The US becomes a “price highland”: Because of tariff barriers, US palladium prices (e.g., NYMEX futures) will systematically and persistently remain above major pricing centers in London.
Premium reflects tariff costs: This price spread (premium) will roughly reflect the tariff rate plus logistics and financing costs, becoming a “domestic market premium” US buyers must pay.
Trade flows change: Global palladium will tend to flow to non-tariff or low-tariff regions, while the US market will rely more on domestic supply and a few tariff-exempt import sources (such as possible Canada, Mexico).
The Citi research team is uncertain whether platinum will be subject to tariffs, calling it “like flipping a coin.”
The US is more dependent on platinum imports and has less scope to boost domestic supply, reducing the likelihood of tariffs. But platinum could still be subject to tariffs alongside palladium.
It is notable that NYMEX platinum and palladium inventories remain near historical highs. Recently, strong inflows into PGM ETFs have intensified physical tightness. CFTC managed money positions have turned net long for the first time since 2022.
(NYMEX platinum and palladium inventories remain near historical highs)
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The above content is from ZF Trading Desk.
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