Silver rally pauses as Trump has yet to impose tariffs on key minerals; spot silver prices at one point fell over 7%.

Investor profit-taking combined with the Trump administration's temporary suspension of tariffs on key minerals caused silver, which had risen sharply for more than a year, to pull back from record highs. Spot silver once fell more than 7%, and other metals that set intraday records on Wednesday alongside silver—gold, copper, and tin—also declined.

After completing months-long national security reviews, the Trump administration decided not to impose comprehensive tariffs on key minerals, including silver and platinum, and instead seeks bilateral negotiations and considers setting price floors. This decision significantly eased market concerns over comprehensive tariff measures by the U.S., as previous tariff expectations had prompted substantial silver inventories to remain in U.S. warehouses, fueling the global short squeeze in 2025.

Despite sharp short-term fluctuations, Wall Street strategists remain optimistic about silver’s medium-term outlook. OCBC strategist Christopher Wong said supply gaps, industrial demand, and spillover demand from gold will continue to support silver prices, but the recent pace of movement means caution is needed in the short term.

Silver plunged after hitting a fourth consecutive intraday record high on Thursday, with a cumulative gain of over 20% in the previous four trading days. Since the start of this year, silver prices have risen more than 10%, continuing last year's near 150% surge.

Silver Drops from Record Highs as Other Metals Adjust Simultaneously

Spot silver rose above $93.75 in Asian trading early Thursday, setting an intraday historical high for the fourth consecutive day. It then quickly reversed and maintained its decline, hitting a session low below $86.40 and dropping nearly 7.3% intraday; by midday U.S. trading, its loss narrowed to less than 2%.

New York silver futures also reversed after hitting new highs. COMEX March silver futures rose above $93.75 in Asian trading to a new intraday high; during the session, they fell below $86.20, dropping nearly 5.8% on the day, with several small rebounds during U.S. trading.

Rallies in other metals also stalled Thursday. Gold was mostly down throughout the day—the first of the past four trading days not to set an intraday historical high. During Asian trading, New York gold futures’ main contract fell to $4,584, down 1.1% intraday, while spot gold dropped below $4,581.40, down nearly 1% on the day.

London copper and tin, which set records on Wednesday, both closed down. LME copper futures ended down about 0.6% at $13,106/ton, failing to approach the previous Tuesday's closing record. LME tin futures, which gained nearly 8% on Wednesday, fell by nearly 2.7% to $52,031/ton.

Trump Delays Tariffs and Shifts to Bilateral Negotiations

U.S. President Trump has stopped imposing comprehensive tariffs on imports of key minerals, including silver and platinum, stating that he will seek bilateral negotiations and has proposed the idea of setting price floors. This move comes after months-long investigations into whether such imports threatened U.S. national security.

TD Securities' senior commodity strategist Daniel Ghali stated in a report that Trump's decision "indicates that the U.S. government will take a more targeted approach in future decisions." He believes this "significantly eases concerns about the U.S. taking comprehensive action that could affect the physical metals that support benchmark prices."

Concerns over possible U.S. tariffs led to some metal supplies, including silver, remaining in U.S. warehouses. New York Mercantile Exchange related warehouses currently hold roughly 434 million ounces of silver, an increase of about 100 million ounces from a year ago. This stimulated a global short squeeze in 2025 and continued to support silver prices into 2026.

Rhona O'Connell, analyst at StoneX Group Inc., said these inventories may help ease tightness in other markets, but "any silver outflow from the U.S. could face some degree of constraint." She noted that silver remains on the list of key minerals possibly targeted by future trade measures.

Multiple Factors Driving Silver Rally

Gold and silver have benefited this week from broad commodity buying, pushing both precious metals and industrial metals copper and tin to intraday historical highs on Wednesday. Pressure from the Trump administration on the Federal Reserve boosted prices and reignited the so-called "Sell America" trade. Meanwhile, U.S. moves to forcibly control Venezuelan leader Maduro, repeated threats to seize Greenland, and tensions over Iran have increased safe-haven demand.

Silver outperformed gold last year, with prices rising nearly 150% for the year, while gold rose over 60%, reflecting some investors’ move to silver as gold became too expensive. Silver has also benefited from strong industrial demand—especially from the solar sector—and in recent weeks, Chinese retail buying has added further momentum. Wallstreetcn mentioned last month that when silver broke $80/oz in the last week of 2025, the lines at the trading counters of Shenzhen’s Shuibei market—a major domestic gold jewelry center—grew even longer.

Poor liquidity and surging investor demand have made silver prone to sharp swings in recent weeks, putting pressure on traders' risk limits. Volatility may become self-reinforcing, as rapid price changes trigger forced selling or short covering.

Ole Hansen, head of commodity strategy at Saxo Bank, commented on social media: "Most of what traders see on their screens reflects forced flows, margin dynamics, option hedging, and short covering, not true supply-demand price discovery. In this environment, technical levels lose reliability, stop-losses are easily triggered, and even correct macro views may struggle to survive in the short-term noise."

Wall Street Bullish on Medium-Term Outlook Yet Warns of Short-Term Risks

Despite a short-term correction in silver, Wall Street analysts remain optimistic about the medium-term outlook.

Christopher Wong, strategist at OCBC, says silver’s medium-term outlook remains clearly positive, supported by supply gaps, industrial demand, and spillover demand from gold. Still, rapid recent movements mean some short-term caution is warranted.

Mitsubishi UFJ (MUFG) analyst Soojin Kim said, "Earlier, the broader metals rally was supported by geopolitical and economic uncertainties, which boosted demand for hard assets, but the tariff suspension gives the market reason to take profits and reassess recent price pressure."

According to Bloomberg’s latest Markets Pulse survey, gold’s rally will last beyond January. While silver and copper have hit similar milestones, there are signs that, as investors assess the persistence of supply constraints, inflows to these metals are wavering.

MUFG analysts say the Trump administration’s decision not to immediately tax key mineral imports has eased supply concerns. After months of reviewing the national security impact of some imports, the government did not impose tariffs but said it is negotiating with trading partners to reduce U.S. dependence on other countries, though the possibility of future tariffs isn't ruled out.

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