Silver prices slid over 1% to dip below $33.50 per ounce on Thursday, hitting a one-week low as traders navigated through market uncertainties triggered by US President Donald Trump’s sweeping tariff measures.
Silver drops as markets react to Trump's tariffs
Trump’s decision to impose a 10% baseline tariff on all imports, with steeper levies targeting major trading partners like China (34%), the EU (20%), and Japan (24%), raised concerns over the potential fallout for global trade. Additionally, a 25% tariff on foreign-made automobiles took effect immediately, adding further stress to market sentiment.
While Trump defended the tariffs as a strategic move to boost domestic manufacturing and reduce the US trade deficit, the market reaction was mixed. Gold prices surged to a record high, benefiting from safe-haven demand amid the escalating trade tensions. In contrast, silver faced downward pressure, caught up in a broader selloff of commodities, as investors sought to reallocate funds into less volatile assets. Silver, often seen as a riskier investment than gold, was particularly vulnerable to the uncertainty surrounding the tariffs and potential retaliatory measures by other countries.
US data add to the negative sentiment
Meanwhile, recent US economic data added to the negative sentiment. The manufacturing sector contracted in March for the first time this year, while job openings for February fell more than expected to 7.57 million, signaling potential signs of softening in the labor market. These developments only fueled concerns about the broader impact of tariffs on economic growth, adding to the volatility in commodity prices. As a result, investors are now closely watching Friday’s nonfarm payroll report for further signals on the health of the US economy and potential Federal Reserve policy adjustments.
