Trump’s Tariffs Hit Industrial Demand and Sentiment

President Trump’s announcement of sweeping reciprocal tariffs and targeted measures against China triggered a reassessment of global trade flows and manufacturing prospects. Semiconductor tariffs are particularly bearish for silver, given its widespread industrial applications. China’s response—slapping a 34% levy on all American goods—adds to fears of a drawn-out trade war. The result has been a sharp drop in global demand expectations, particularly in Asia and Europe, two major industrial buyers of silver.

Margin Calls Force Liquidation Across Commodities

A violent decline in equities—highlighted by a 2,000+ point drop in Dow futures—unleashed margin call selling across the board. Silver was hit especially hard as investors were forced to exit positions to cover losses elsewhere. While gold also saw liquidation, its safe-haven bid helped cushion losses. For silver, with weaker monetary demand and no central bank support, the impact was deeper and more sustained.

Dollar Strength, Yields, and Fed Signals in Focus

Silver’s weakness was compounded by a rising U.S. dollar and an uptick in real yields. Treasury markets stabilized after strong jobs data, pushing the 10-year yield back near 3.88%. The dollar gained as expectations for aggressive Fed cuts were scaled back. Traders now turn their attention to this week’s Fed minutes and Thursday’s CPI report, both of which could reshape policy expectations. If the minutes signal hesitation to ease, or if CPI comes in hot, silver could face further headwinds from tighter financial conditions and a stronger dollar.

Market Forecast: Silver Likely to Remain Under Pressure