Silver (XAG/USD) rose about 4% on Monday as demand for safe-haven assets increased, alongside Gold. The move followed trade policy changes and rising geopolitical risk.
The US Supreme Court struck down emergency-power tariffs on Friday. The US administration then moved towards Section 122 of the Trade Act of 1974 and said it may introduce a 15% flat global tariff in the coming months.
Key Drivers Behind The Rally
US-Iran nuclear talks remained stalled. Economic data also added pressure, with Q4 GDP at 1.4% and PCE inflation at 3.4%.
Silver supply factors also supported prices, with a sixth straight annual deficit and a projected 67 million ounce shortfall in 2026. Demand is linked to industrial use in solar, electric vehicles, and semiconductors.
On the chart, silver briefly touched $88/ounce for the first time in three weeks and traded above the 200-period EMA at $82.17. It followed a recovery from a $72.00 low in mid-February.
The Stochastic Oscillator moved above 90. Resistance is near $90.00 then $92.00, with support around $84.00 and $82.00; a break above $90.00 could bring $100.00 into view.
Trade Policy And Market Positioning
Tariffs are import duties, paid at the port of entry by importers, while taxes are paid at purchase by individuals and firms. In 2024, Mexico, China and Canada made up 42% of US imports, with Mexico at $466.6 billion.
The sharp rally to $88 is fueled by genuine fears of stagflation and trade wars, but the overbought stochastic signals a potential for a near-term pause. We should consider buying out-of-the-money call options, such as the March $92 calls, to capture further upside while limiting our risk. This strategy allows us to benefit from a continued move toward $100 without being fully exposed to a sudden pullback.
The fundamental picture supports this bullish outlook, as we are entering the sixth straight year of a silver supply deficit. The Silver Institute’s data from late 2025 showed industrial demand, particularly for solar panels and electric vehicles, grew by over 15% last year, tightening the physical market considerably. This underlying shortage provides a strong floor for prices against any short-term profit-taking.
We’ve seen this playbook before; the current mix of slowing growth and persistent inflation is reminiscent of the 1970s, a period that saw a massive bull market for precious metals. Furthermore, the market volatility created by the 2018-2019 tariff disputes taught us that safe havens like silver perform well during periods of trade policy uncertainty. The proposed 15% global levy is a far more significant threat, suggesting this rally has legs.
The new tariff plan heavily targets our biggest trading partners, with U.S. Census Bureau data from last year confirming that Mexico and Canada alone accounted for nearly $800 billion in imports during 2025. Any retaliatory measures from these nations would almost certainly escalate trade tensions and drive more capital into hard assets like silver. We must watch for any announcements from Ottawa or Mexico City, as they will be the next major catalyst.
For those trading futures directly, it may be prudent to wait for a slight dip before entering a long position. A pullback to the $84 support level would present a more attractive entry point, reducing the risk of buying at a short-term top. We can place stop-loss orders below the critical 200-period moving average around the $82 mark to manage our downside.
