Silver Prices Dip After US Tariff Pause, Yet Surge Weekly on Supply Concerns

Silver prices weakened on Thursday after the US government announced a temporary suspension of new tariffs targeting Chinese goods, easing short-term trade tensions. The pause, effective through March 2026, initially pressured silver as investors recalibrated risk exposure, with the COMEX August silver contract falling to $33.42 per ounce. Despite the intraday decline, the metal posted strong gains over the week, closing near $34.68—an increase of 6.4% compared to the prior week’s close. The rally reflects sustained investor interest in precious metals as a hedge against inflation and geopolitical volatility. Silver demand has risen by 12% year-to-date, driven by industrial applications in solar panels and electric vehicles, according to preliminary data from the World Silver Survey. Mining output, however, has lagged, with global production down 3.1% in the fourth quarter of 2025 due to operational disruptions in Mexico and Peru. Market participants are also monitoring central bank activity, with the Bank of England and European Central Bank signaling potential rate cuts in Q2 2026. Lower real interest rates typically boost non-yielding assets like silver, reinforcing the metal’s appeal. The COMEX silver contract has now traded above $34 for three consecutive sessions, marking the highest weekly close since October 2024. The divergence between short-term sentiment and longer-term fundamentals is evident. While tariff-related optimism prompted a temporary sell-off, underlying structural factors—tighter supply, rising industrial demand, and shifting monetary policy—are likely to sustain upward pressure on silver prices in the coming months.