Silver (XAG/USD) ended a four-day rise and traded near $87.50 per troy ounce during Asian hours on Tuesday. It may find support from ongoing trade uncertainty and geopolitical risks.
The Wall Street Journal said on Monday that the Trump administration is considering new national security tariffs covering six industries. This follows a Supreme Court ruling last week that struck down several second-term tariffs.
Section 232 Tariff Plans
The report said the new measures would use Section 232 of the Trade Expansion Act of 1962. They would be separate from the 15% global tariff announced on Saturday.
The European Union indicated it may pause ratifying its trade agreement with the US. Questions also remain over how long any new measures would last, as Congress is not expected to extend them beyond the 150-day limit.
India and the US postponed a planned three-day meeting between trade negotiators on an interim trade pact. The delay comes as Washington adjusts its tariff approach after the Supreme Court struck down the broader reciprocal duty framework.
Tensions in the Middle East have stayed elevated for weeks after Trump said a possible strike on Iran could be imminent. Oman said a third round of US–Iran talks will go ahead this week in Geneva.
Volatility Outlook For Silver
We should anticipate a significant uptick in silver’s price volatility over the coming weeks. The conflicting signals between potential safe-haven demand from tariffs and easing geopolitical tensions mean traders should prepare for sharp price swings in either direction. This environment makes strategies using options, such as straddles, particularly relevant for capturing movement regardless of the outcome.
This situation feels familiar, as we often looked back throughout 2025 on the trade disputes of the late 2010s. During the peak uncertainty of the US-China trade war in mid-2019, silver prices rallied over 30% in just three months. History suggests these tariff announcements act as a strong catalyst for precious metals, even if the economic impact takes longer to materialize.
The talks between Washington and Tehran are a major wild card that could either dampen or ignite silver’s rally. A positive outcome could see prices pull back sharply, while any breakdown in negotiations may cause a rapid spike toward new highs. The options market is reflecting this binary risk, with implied volatility on front-month silver contracts climbing to a three-month high of 35%, according to recent COMEX data.
Beyond the headlines, we are seeing money flow into silver derivatives, signaling that major players are taking positions. Open interest in silver futures has increased by nearly 8% in the last five trading sessions, a sign of new capital entering the market rather than just existing traders shuffling positions. This build-up suggests a significant price move is expected.
However, we must also consider silver’s role as an industrial metal, which accounts for over 50% of its annual demand. The administration’s new tariffs targeting six industries could slow manufacturing activity, creating a headwind for silver by potentially reducing its industrial consumption. Therefore, any long positions should be hedged against the risk of a global growth scare that could override the safe-haven bid.
