The trading price of silver, the world's hottest precious metal recently, experienced a significant pullback on Thursday, following a multi-day surge in its futures price that repeatedly set new historical highs. During the early Asian trading session on Thursday, the price of silver fell over 4% to around $87.2 per ounce, primarily due to U.S. President Donald Trump's indication that he would temporarily suspend tariffs on key mineral imports, which substantially cooled the market's panic-driven bullish sentiment towards silver. Silver had previously surged to a record high of $93.7 on Wednesday. The white metal plummeted by as much as 7.3% at one point, while gold also declined but with a far smaller drop of less than 0.5%.
Following a sharp rally of over 20% in the past four trading sessions, silver entered a correction. Beyond the macro-level impact of the U.S. government's tariff suspension temporarily averting a silver buying spree in the U.S. market, the majority of the decline is likely attributed to profit-taking by substantial speculative funds in silver and billions of dollars in selling pressure stemming from the rebalancing of the Bloomberg Commodity Index (BCOM). Silver has nearly quadrupled in price over the past year. In the first two weeks of 2026, gold prices have risen 7% year-to-date, while silver prices have surged dramatically by 29.5%.
Gold and silver futures prices continued their strong upward trend into Wednesday, closing at new record highs, largely driven by concerns that global geopolitical tensions may worsen persistently. Key factors include ongoing instability in Venezuela, Cuba, and Iran, with escalating risks of direct political or military conflict between the latter two nations and the United States. Additional pressures come from the Trump administration's continued threats to the Federal Reserve's monetary policy independence, the perceived collapse of "American economic exceptionalism" during Trump's term leading to a weaker U.S. dollar, and a sell-off in U.S. Treasury bonds.
President Donald Trump's "tariff reprieve" triggered the pullback in silver. After Trump stated he would secure key mineral supplies through bilateral trade negotiation agreements, concerns in the U.S. commodities market about imminent tariffs on silver, platinum, and palladium were temporarily alleviated. This led to significant corrections in the recently surging prices of silver and platinum group metals, with platinum and palladium both falling nearly 5% at the time of writing. According to a statement released late Wednesday local time, the Trump administration proposed setting price floors for imports—rather than just percentage-based tariffs—to develop the increasingly large U.S. domestic industrial supply chain system, but did not rule out the possibility of announcing tariffs in the future.
"The order signals a more targeted approach from the Trump administration in future decisions, rather than a broader strategy," said Daniel Ghali, a senior commodity strategist at TD Securities, in a report. He emphasized that, as evidenced by the sharp declines in both silver and platinum prices, this approach "significantly alleviated fears of a broad-based policy, but this environment may inadvertently undercut the fear-driven support for benchmark precious metal prices."
The broad rally in commodity metals had pushed silver and gold to new highs on Wednesday, with LME copper and tin prices also soaring wildly, primarily because investors are turning to industrial and precious metal assets due to various geopolitical, economic, and supply chain tension risks. Frenzied buying in Chinese and U.S. markets, along with a broader commodity rotation cycle, continues to support demand for precious and industrial metals.
Silver prices have been prone to violent swings in recent weeks. Its 14-day Average True Range (ATR)—a measure of market volatility—has spiked rapidly within just a few days. However, this trend is largely attributable to strong technical factors dominated by speculative funds, rather than fundamental drivers. "Much of what commodity traders see on their screens reflects forced flows, margin dynamics, option hedging, and short covering, not genuine price discovery based on supply and demand," said Ole Hansen, head of commodity strategy at Saxo Bank A/S, on social media. "In such an environment, technical support can become unreliable, stop-losses are easily triggered, and even correct macro views struggle to survive the short-term noise of speculative selling."
Amid silver's sharp decline, gold demonstrated its quality as the "ultimate safe-haven." The Trump administration's renewed threats towards the Federal Reserve have also significantly boosted the precious metals market recently, while rekindling the "de-Americanization" trade. This has prompted some institutional investors to sell U.S. Treasuries and allocate more funds to gold, the traditional safe-haven asset. Instability, including the U.S. detention of a Venezuelan leader, President Trump's repeated threats of military occupation of Greenland, and the situation in Iran, has also contributed to safe-haven demand for both gold and silver.
According to the latest Markets Pulse survey, gold's upward momentum, driven by factors including robust ongoing purchasing demand from global central banks, is expected to persist beyond January. This suggests that gold prices, which surged 70% over the past year and repeatedly hit new highs, are poised for continued gains. Even as gold dipped during the early Asian session on Thursday, Asian gold ETFs continued to attract bargain-hunting buying interest. However, silver may not exhibit the same price resilience as gold—after all, silver is dominated by speculative funds, whereas gold enjoys substantial support from systematic central bank buying.
Therefore, high volatility is likely to become the norm for silver in the near future. Although silver, copper, and platinum group metals have also reached similar record-high milestones, inflows into these commodity metals (excluding gold) are beginning to show signs of wavering as investors assess the sustainability of supply constraints and large volumes of speculative capital opt to take profits. Furthermore, the CME Group tightened its risk control standards again this month. Effective from the close of trading on January 13th, the margin calculation method for gold, silver, platinum, and palladium was changed from a "fixed U.S. dollar amount" to a "percentage of nominal value."
This shift means margins will adjust dynamically in real-time based on fluctuations in contract value. When silver prices surge violently, the required collateral for commodity traders increases proportionally. The CME's latest policy, in the current high-volatility environment, significantly raises the cost of highly leveraged speculation, forcing some "lightly positioned and speculative long" traders to actively reduce their positions due to margin pressure, objectively helping to cool overheated sentiment. The analyst team at Saxo Bank noted that any one-sided market trend will eventually hit a historical ceiling, and the most likely brake for silver would be the destruction of industrial demand.
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