Silver collapsed 7% after a record high. Is the rally over?

The rally in the precious metals market was interrupted by a collapse in silver prices. Investors began to close positions on the news that the U.S. administration has chosen a softer scenario of regulating imports of minerals and is ready to abandon the introduction of blanket duties in favor of point measures.

The value of silver collapsed by 7.3% in the moment after US President Donald Trump decided to refrain from imposing new duties on imports of critical minerals, Bloomberg writes. In a statement following a months-long review to determine whether foreign supplies pose a threat to national security, Trump said he may set minimum price thresholds on imports - instead of imposing direct percentage tariffs - to develop supply chains through loyal countries. According to data compiled by Bloomberg, concerns about imposing duties have kept some stocks, including silver, in U.S. warehouses, contributing to a global short-squeeze last year and continuing to support prices into early 2026.

Gold fell in price by 0.9% - investors are taking profits after another record, in addition, Trump's softening rhetoric on the Fed and Iran weakened demand for protective assets, Reuters reports. Trump made it clear that he is taking a wait-and-see stance on the Iranian crisis and said he has no plans to fire Fed chief Jerome Powell.

Published on the night of January 15, the document suggests that the Trump administration will take a "more point-by-point approach to future decisions," Bloomberg quoted Daniel Gali, investment strategist for exchange-traded commodities at TD Securities, as saying. Washington's ill-conceived blanket duties could have inadvertently affected precious metals trade, he said, and Trump's announcement significantly reduced that risk.

The medium-term scenario for silver remains "persistently constructive, supported by supply shortages, industrial consumption and demand spillovers from gold," said Oversea-Chinese Banking Group strategist Christopher Wong. However, "the speed of recent movements calls for some caution in the short term," he added.

Silver overtook gold in 2025, rising almost 150% as some investors shifted capital into the asset after the yellow metal became too expensive. Silver is also supported by industrial demand, especially in the solar energy sector, where it is used in panels, and speculative excitement in China in recent weeks has reinforced the uptrend, states Bloomberg.

Gold and silver benefited this week from broad capital inflows into exchange-traded commodities, pushing the precious metals, along with tin and copper, to record highs. On Jan. 14, the price of silver topped $93 an ounce for the first time. The Trump administration's new attacks on the U.S. Federal Reserve revived the "sell America" strategy and supported the prices of defensive instruments. The seizure of Venezuela's leader by the U.S. military, repeated threats to take Greenland and the unstable situation in Iran also contribute to the demand for a "safe haven".

This article was AI-translated and verified by a human editor