Silver prices took investors on a dramatic ride this week, initially plunging by 8% before rebounding above $90 per troy ounce, spurred by a surprise policy decision from U.S. President Donald Trump. In what has become a staple of Trump’s unconventional economic policy, the president opted not to impose import tariffs on critical minerals such as silver and platinum, instead targeting advanced computing chips with a 25% levy. The decision rippled through global metals markets, sparking volatility and triggering sharp pullbacks in both industrial and precious metals, followed by modest recoveries as investors recalibrated.
This latest twist in U.S. trade policy underscores the growing importance of critical minerals in national strategy while highlighting silver’s dual role as both an industrial input and a speculative investment vehicle. Combined with geopolitical tensions, changing monetary expectations, and speculative retail trading, silver has become a focal point of investor attention in early 2026.
Silver had soared to an all-time high of $93.75 before the selloff, capping a staggering 150% gain over the past year. Several factors fueled its ascent: fears of disrupted supplies due to potential tariffs, industrial demand from booming solar production, and spillover investment demand from gold, which had become increasingly expensive.
However, the Trump administration’s decision to eschew blanket mineral tariffs in favor of setting price floors for foreign-processed minerals undercut the bullish narrative. Without tariffs, the perceived immediate threat to domestic supply chains diminished, triggering a wave of profit-taking that drove silver prices to as low as $86.25 before they rebounded to the $90 range.
According to Yihui Xie of Bloomberg, the initial rally had already pushed investors to the brink of caution. “The white metal outpaced gold... as some investors rotated into it after its yellow peer became too expensive,” wrote Xie. “But fears that tariffs would be imposed kept some supplies stockpiled in U.S. warehouses, contributing to the global short squeeze that lifted prices earlier.”
StoneX analysts echoed a similar sentiment. Rhona O’Connell noted that despite the tariff decision, market tightness remains noticeable. “We can’t expect the tightness to ease dramatically, especially as it’s now tight in Asia also,” she explained. Stocks of silver in CME-approved New York warehouses have dropped to 13,510 tonnes, down nearly 20% from September’s peak, while London inventories remain near three-year highs.
Silver’s industrial utility continues to support its valuation, particularly in sectors like solar energy and electronics. The iShares Silver Trust (SLV) ETF, one of the largest silver-backed products, recently hit a record value of $47.5 billion despite shrinking 0.5% in share count, indicating profit-taking amid persistently strong overall demand.
Metals Focus, an industry consultancy, suggests that while industries may begin reducing silver use to offset higher prices, the impact may be modest and offset by investment demand.
A speculative frenzy in China has also played a significant supporting role in silver’s surge. Analysts like Christopher Wong of OCBC argue the medium-term outlook remains “firmly constructive” due to structural supply constraints and industrial utility. However, volatility indicators signal caution. According to Saxo Bank’s Ole Hansen, current price moves often reflect “forced flows, margin dynamics, option hedging and short covering,” rather than true supply-and-demand economics, which undermines the reliability of technical indicators.
Gold prices also suffered a minor retreat, dropping to $4,582 overnight before climbing back above $4,600 as President Trump softened his rhetoric on Iran and emphasized diplomacy. The yellow metal had recently peaked near $4,643, driven by geopolitical fears, concerns over Federal Reserve independence, and safe-haven buying amid heightened uncertainty.
Yet, unlike silver, gold’s decline was more orderly. Strong U.S. jobless claims data and improving regional manufacturing indicators led markets to reduce expectations of aggressive Fed rate cuts, which in turn tempered bullion’s near-term upside. With just 47 basis points of rate cuts now priced in for the year, compared to earlier forecasts of 75 or more, traders have begun shifting focus toward risk assets, lifting the dollar and weighing on gold’s appeal.
Despite that, many investors remain bullish on gold. FXStreet’s technical analysis suggests that any movement above the recent $4,643 high could reignite bullish momentum, setting up targets of $4,650 and $4,700. Conversely, a drop below $4,569 could open the path toward deeper corrections.
Silver was not alone in this rollercoaster. Platinum dropped 6% to $2,257 before bouncing to $2,385. Copper and tin, both heavily reliant on global industrial production, also saw wild swings. Copper fell 3.1%, and tin lost nearly 5%, both pulling back from record highs set the day before.
This metal-wide volatility signals broader uncertainty about global trade, inflation, and the future course of U.S. economic policy. President Trump’s reliance on selective tariffs and price floors rather than a sweeping protectionist agenda has introduced unpredictability in supply chains, affecting investor sentiment worldwide.
Simultaneously, retail sentiment in precious metals markets appears to be shifting. Financial commentator Robert Kiyosaki, famed for his “Rich Dad, Poor Dad” franchise, has warned of a silver price crash, citing speculative excess and rising retail sell-offs. “Millions of silver spectaculars are selling as prices go up,” he said, suggesting an incoming “major pullback before it begins climbing again.”
Retail dealer FideliTrade also reported an unprecedented wave of customer sell orders in December, noting that aggressive profit-taking overwhelmed subdued buying demand. This comes despite the SLV ETF setting value records, indicating institutional interest remains firm even as retail sentiment cools.
While silver’s recent plunge underscores the market’s vulnerability to policy shifts and speculative excesses, the medium-term fundamentals remain favorable. Demand from industrial sectors, constrained supply chains, and a persistently bullish investment case continue to support the metal’s long-term outlook. However, volatility exacerbated by algorithmic trading, leveraged speculation, and uncertain U.S. policy suggests that investors should tread cautiously.
Trump’s tariff decision marks a pivot toward surgical economic nationalism, avoiding broad trade disruptions but still injecting market unpredictability. As silver regains footing around $90, investors must navigate a landscape rich in potential but fraught with short-term landmines. For now, the silver bull may have been tamed, but it’s far from finished.