Silver Shines after Tariff Turbulence

Silver prices edged up modestly, rising by 0.49% to ₹91,595, as investor demand for safe-haven assets increased in response to persistent geopolitical tensions and shifting trade policies. A temporary adjustment in U.S. tariffs and ongoing supply-demand imbalances are contributing to silver’s appeal, especially in a climate marked by inflationary uncertainty and volatile markets.

Former President Donald Trump's unexpected reversal on tariff policies—reducing import duties to a flat 10% for most nations over a 90-day negotiation period—briefly lifted market sentiment. However, China remains excluded from this pause, with tariffs raised to a steep 125%, intensifying trade tensions and sustaining demand for metals like silver as a protective asset. Meanwhile, U.S. inflation eased to 2.4% in March 2025, down from 2.8% in February, suggesting that price pressures may be stabilizing. Jobless claims also remained steady, reflecting resilience in the labor market.

Silver’s supply fundamentals remain tight, with the market projected to face a fifth consecutive annual deficit—149 million ounces in 2025. While this is a 19% reduction from 2024, it's still historically significant. Industrial demand, particularly from green technologies, continues to support prices, along with a 3% rise in physical investment. Technically, silver is showing fresh buying interest, with open interest rising 1.05% to 20,613 contracts. Key support is seen at ₹90,785, with resistance at ₹92,330. A breakout could push prices toward ₹93,060.

UBS remains bullish on silver’s medium-term prospects. Despite recent volatility and a dip below the $30 per ounce mark, the bank forecasts silver to trade between $36–$38 in the second half of the year. Analysts point to similarities with past market disruptions, such as the global financial crisis and COVID-19, though they caution that current economic headwinds are less severe. Rate cut expectations by the Federal Reserve, potentially deeper than anticipated, are also seen as a tailwind for silver.

Markets have responded cautiously but positively to Trump’s 90-day tariff pause, with major indices rebounding and Asian markets showing solid gains. Silver has traded within a relatively tight range, hovering just below $30 per ounce as volatility begins to stabilize. The gold-silver ratio remains elevated, approaching 100, often viewed as a sign that silver may be undervalued relative to gold.

With geopolitical tensions high and monetary policy easing on the horizon, silver appears well-positioned for a potential rally. Investors are advised to stay alert to new trade developments and economic indicators. The metal’s dual role—both industrial and precious—makes it a compelling asset in uncertain times. For now, silver seems to be forming a base, with analysts suggesting it’s a market to buy on dips—especially if new tariff agreements emerge and macroeconomic trends turn more favorable.