Metals Volatility: Silver crashes 7% on Tariff Pause, Geopolitics Floor Gold

Precious metals markets experienced violent divergence on Thursday, as Silver (XAG/USD) plunged approximately 7.3% to trade near $86.40, retreating sharply from record highs. Gold (XAU/USD), while softer, remained relatively resilient above $4,600, supported by persistent geopolitical premiums.

The catalyst for the silver washout was the White Houses decision to prioritize “negotiations” over immediate tariffs on critical mineral imports, temporarily removing a key supply-squeeze narrative that had fueled recent speculative buying.

Trade War Fears Recede, Geopolitics Heat Up

The Trump administration's announcement to pause immediate Section 232 tariffs on critical minerals triggered massive profit-taking in the industrial metal.

• The Reaction: Spot Silver, which had rallied roughly 150% over the past year partly on “strategic hoarding” bets, saw technically driven liquidation.
• Analyst View: TD Securities noted the decision suggests a “more surgical approach” by the White House, reducing the immediate risk of a blanket trade war that would disrupt physical supply chains.

However, the floor for the broader precious metals complex remains solid due to the “fragmentation” of the global order. Tensions between the US and Iran have escalated, with the US moving a carrier strike group to the Middle East. Simultaneously, bizarre but strategically significant friction over Greenland—and US suggestions of asserting control over the Arctic territory—has reinforced the long-term “de-dollarization” and safe-haven thesis for Gold.

Market Outlook

While Silver faces a short-term technical correction as the “tariff squeeze” premium evaporates, structural demand remains intact due to industrial consumption (solar/AI). For Gold, the macro narrative has shifted from pure monetary debasement to acute geopolitical hedging.

• Key Levels: Bullion traders are watching the $4,595 support level for Gold. A breach could signal a deeper correction, but the long-term trend remains bullish as long as US foreign policy remains unpredictable.