Silver (XAG/USD) rose for a fourth day, trading near $87.10 per troy ounce in Asian hours on Monday and nearing $87.50. Demand increased as tariff uncertainty supported safe-haven buying in precious metals.
After a US Supreme Court ruling that limited broad tariff powers, President Donald Trump said he would raise global import tariffs to 15% from 10%. He said the new tariffs would take effect immediately and indicated more levies could follow.
Trade Authority In Focus
The court found his use of emergency powers to impose reciprocal tariffs was unlawful, which narrowed his unilateral trade authority. The policy change has kept markets focused on trade risks.
India has postponed planned trade talks with the United States, delaying progress on an interim trade pact. European officials are reassessing future trade commitments and seeking clarity on how current agreements may be affected.
Middle East tensions also added to risk aversion. Trump said limited military strikes on Iran remain under consideration if negotiations fail to address Tehran’s nuclear programme, supporting demand for haven assets.
We remember how the sudden 15% global tariff announcement in 2025 sent silver surging toward $87.50. That event, combined with US-Iran tensions, was a stark lesson in how quickly geopolitical risk can ignite the precious metals market. With silver now trading at a much more subdued level, the memory of that volatility should guide our strategy.
Positioning For The Next Shock
The market is calmer now, with silver trading around $34.50 as of this week, and implied volatility has fallen significantly. For instance, the Cboe Silver ETF Volatility Index (VXSLV) is currently near 28, a sharp contrast to the levels above 60 we saw during the peak of last year’s tariff crisis. This suggests complacency might be setting in, creating an opportunity for those who anticipate future shocks.
Given this backdrop, buying long-dated call options on silver is a prudent strategy. This approach offers a relatively low-cost way to position for a potential repeat of last year’s price spike, whether from trade disputes or other unforeseen global events. The maximum loss is limited to the premium paid, providing a well-defined risk on a potentially explosive upside.
We should also look at strategies that benefit from a rise in volatility itself, not just a rise in price. Buying straddles or strangles on silver ETFs could be effective, as they profit from a large price swing in either direction. The lesson from 2025 was that the market’s initial reaction to political news is often extreme and unpredictable.
Historically, silver has a track record of sharp rallies during periods of high uncertainty, as seen during the 2010-2011 sovereign debt crisis when prices more than doubled in under a year. Recent data shows a steady increase in open interest for silver futures contracts since the start of 2026. This indicates that institutional traders may be quietly building positions in anticipation of renewed market turbulence.
