Silver prices slipped nearly 1% to around $32.30 per ounce on Tuesday, as investors moved to lock in profits following a sharp rally across the precious metals sector. The modest pullback followed a strong upward trend fueled by safe-haven buying, with demand intensifying amid mounting fears over the global economic fallout from worsening trade tensions.
Silver pulls back on profit-taking
Market sentiment took a hit as US-China trade negotiations appeared to stall once again, with Beijing accusing Washington of abusing tariffs for political leverage and warning other countries against entering into what it described as "one-sided" trade agreements. The escalating rhetoric added to concerns that the fragile global trade environment could deteriorate further, dragging down economic growth and stoking volatility across asset classes.
Adding to investor unease, President Donald Trump renewed his calls for immediate interest rate cuts and openly threatened to remove Federal Reserve Chair Jerome Powell. The unprecedented pressure on the Fed raised fresh alarm over the institution's independence, undermining confidence in US monetary policy at a time when financial markets are already grappling with multiple headwinds.
Silver prices remain elevated
Despite the short-term retreat, silver prices remain elevated, supported by a broader environment of uncertainty. Persistent geopolitical risks, concerns about monetary policy credibility, and fears of an economic slowdown continue to drive demand for traditional safe-haven assets like silver and gold. Furthermore, silver is benefiting from its dual role as both a precious and industrial metal, with expectations that potential fiscal stimulus in major economies could underpin demand for industrial applications of silver, even if broader economic momentum softens.
Analysts note that while some near-term profit-taking is to be expected after the recent rally, the underlying bullish factors for silver remain intact, suggesting that any dips could be viewed as buying opportunities by longer-term investors positioning for continued volatility ahead.
