Despite today’s outperformance, silver remains under broader pressure, diverging temporarily from gold, which also dropped sharply before staging a modest recovery. Gold continues to attract central bank support and benefits from a safe-haven bid. In contrast, silver lacks institutional backing, and its heavy industrial exposure makes it more vulnerable to the current macro climate.
Tariffs and Recession Risk Undermine Industrial Demand
President Trump’s sweeping tariff plan, which includes a baseline 10% tariff on goods from 180 countries, has rattled manufacturing sentiment globally. China’s retaliatory 34% tariffs, especially on U.S. semiconductors, directly impact silver-intensive sectors. The resulting drag on global manufacturing demand is weighing on silver, as industrial buyers in Asia and Europe retreat.
Margin Calls, Strong Dollar Add to Selling Pressure
Last week’s broad market collapse forced liquidation across risk assets. Silver bore the brunt of this deleveraging as Dow futures tumbled more than 2,000 points and margin calls escalated. While gold retained partial support from its safe-haven status, silver’s weaker monetary appeal left it more exposed. A strengthening dollar and rising real yields have further limited upside potential, particularly as the Fed pushes back on rate cut expectations.
