Silver Declines on Profit-Taking

Silver prices dropped nearly 1% to $87.5 per ounce on Tuesday as a massive liquidation event in China overshadowed a broader flight to safety. Despite persistent safe-haven demand from the new 15% US global tariff and upcoming nuclear talks with Iran, silver remains under pressure following a record 38% intraday plunge last week that shattered the speculative mania of early February. This correction is being amplified by solar manufacturers who are aggressively substituting silver with copper to offset rising costs as the metal continues its sixth consecutive year of structural supply deficits. While industrial users in the AI and electric vehicle sectors maintain a steady floor for demand, a striking 10% price premium in Chinese domestic markets suggests localized supply tightness that has yet to stabilize international rates. Investors are now watching the $85 support level closely while waiting to see if a weaker US dollar can spark a recovery amid the ongoing trade policy chaos.

Silver steadied above $88 per ounce on Tuesday after briefly dipping below $85 earlier in the session, with trading activity picking up as mainland Chinese participants returned from the long Lunar New Year holiday. The metal, along with other commodities, surged in January before undergoing a sharp correction driven largely by speculative flows in China. Investors also evaluated the implications of potentially lower US levies after the US Supreme Court struck down President Donald Trump’s reciprocal tariffs. Despite Trump’s subsequent threat to raise global tariffs from 10% to 15% in response to the ruling, China is still expected to face lower average duties on its metal-intensive exports. On the geopolitical front, attention remains on US-Iran talks set to resume on Thursday, with Trump reiterating his preference for a negotiated outcome while warning of serious consequences if a nuclear agreement is not reached.

Silver dropped more than 2% to below $86 per ounce on Tuesday, ending a four-day rally as investors booked profits amid persistent trade uncertainty and heightened geopolitical risks. In the latest developments, global logistics firm FedEx filed a lawsuit seeking a full refund after the US Supreme Court struck down Trump’s emergency tariffs. On Monday, silver rallied after Trump threatened to lift global tariffs from 10% to 15% in response to the Court’s ruling. The shifting policy stance fueled concerns that existing trade deals could unravel, though major trading partners have so far maintained their agreements with Washington. Trump also warned of steeper duties on countries that “play games” with current trade arrangements. On the geopolitical front, markets remain focused on US-Iran talks scheduled to resume on Thursday. Trump reiterated his preference for a negotiated resolution but cautioned that serious consequences would follow if a nuclear deal is not secured.