Factors Influencing Silver's Price Movements

1. Recent Price Movement

The iShares Silver Trust (SLV) is currently trading at $83.32, down 1.47% today. It has recently experienced a sharp pullback from record highs, after soaring past $82 per ounce, before witnessing a steep 14% decline on Monday. However, it saw significant gains in 2025, rallying 152%, and extended its gains by another 13% in the first week of 2026.

2. Tariff Discussions

Easing Tariff Risks: The Trump administration paused broad tariffs on key minerals, including silver, opting for bilateral talks. Citigroup anticipates silver will likely avoid U.S. tariffs, which could encourage metal outflows from U.S. warehouses and relieve global tightness.

Potential Future Tariffs: Silver's addition to the U.S. Critical Minerals List in early November changed how the U.S. governs its silver supply chain, leading to speculation of possible tariffs on silver in the future.

Impact on Industrial Demand: Earlier concerns suggested that the threat of tariffs could weaken industrial demand for silver, potentially cooling price gains.

3. Supply and Demand Dynamics

Persistent Supply Deficits: The global silver market is projected to face its seventh consecutive year of deficit in 2025, with a cumulative shortfall of nearly 800 million ounces since 2021 due to declining mine output. The market is expected to record a substantial deficit of 117.6 million ounces in 2025, marking the sixth straight year of shortage. This structural supply-demand imbalance is a significant factor.

Tight Inventories: Physical supplies are tightening across global markets, with inventories on the Shanghai exchanges at "decade lows." London vault holdings have significantly declined, approaching historic lows by October 2025.

Industrial Demand: More than 50-60% of all silver demand now comes from industrial applications such as electronics, solar panels, electric vehicles, and data centers. The AI boom and green technologies are major new drivers of this demand. Industrial demand for silver rose 4% in 2024. 

Investment Demand: Strong gains in silver have also been driven by robust investment demand. Silver is seen as a cheaper alternative to gold, attracting renewed investment flows.

4. Other Influencing Factors

CME Margin Requirements: The CME Group increased margin requirements for silver futures, which led to leveraged traders reducing positions and triggered near-term price corrections.

Geopolitical Tension and Economic Uncertainty: Geopolitical tensions and global economic uncertainty have also contributed to a flight to safety, benefiting precious metals.

U.S. Dollar Strength and Interest Rates: A weaker U.S. dollar and expectations of Federal Reserve rate cuts typically support non-yielding assets like silver.

Summary

Silver has experienced significant rallies, driven by persistent supply deficits and strong industrial demand from sectors like solar energy and electric vehicles. While recent easing of tariff risks may have contributed to its pullback, there's ongoing speculation about future tariffs. The market also reacted to increased margin requirements by the CME Group. Despite recent volatility, the underlying fundamentals of limited supply and growing industrial usage continue to underpin silver's price movements.