Silver Falls Sharply After Record-Breaking Euphoria—What's Going On?
Silver prices experienced a sharp correction after a major rally that saw the white metal set a record in the previous session. The correction was triggered by easing market concerns about US tariffs on critical mineral imports, coupled with profit-taking following a rapid surge in recent days.
Silver briefly plunged as much as 7.3% before stabilizing somewhat. In Asian trading, silver fell around 4.6% to $88.9020/oz, while gold also weakened 0.5% to $4,602.44/oz. This weakness demonstrates that after an extreme rally, the market tends to be fragile and easily reverses direction when the trigger diminishes.
The main trigger came from Washington's policy signals: President Donald Trump refrained from immediately imposing new tariffs on critical mineral imports. Instead, he left open the option of negotiating bilateral agreements to maintain supply, including the idea of a price floor for imports (not just a percentage tariff). This stance is seen as reducing the likelihood of a "broad stroke" policy that was previously feared to disrupt the benchmark metal market.
On the other hand, silver volatility is indeed high. Recent price movements are considered to be heavily influenced by technical factors—such as margin flows, option hedging, and short covering—so intraday movements can be wilder than purely fundamental supply-demand changes. Under these conditions, technical levels are often easily penetrated, and stop-losses are quickly triggered.
Nevertheless, significant support for precious metals has not completely disappeared. The "safe-haven" narrative remains strong amid geopolitical risks and issues surrounding the independence of the US central bank, so the current silver correction appears more like a cooling-off after a rally, rather than a sign of an immediate end to the main trend.
Key Points:
- Silver corrected sharply after hitting a record; the market began to take profits.
- Critical mineral tariff concerns eased as the US delayed the implementation of new duties.
- Trump opened up supply negotiations, including the idea of an import price floor.
- Silver volatility increased; movements were heavily influenced by technical factors (options/margin/short covering).
- Safe-haven sentiment continues to support precious metals, although they are vulnerable to short-term shocks. (asd)
Source: Newsmaker.id
