The imposition of Donald Trump's protectionist tariffs, among other trade measures, impacted silver prices. A strong rally that began at $29 per ounce on December 20, 2024, saw prices climb to 34.402 (+18.6%) by March 28, a two-month surge. Then on April 3–4, the price plummeted 4,500 points in 2,000-point increments, reaching 29,204, a 13.3% decline.
Monday's April 7th daily candle opened with a 623-point gap down from Friday's close, but managed to fill the gap, settling the asset price at $30. Trading activity has slowed today. Over the past week, net speculative positions in silver in the US declined from 61,000 to 57,300 contracts, signaling reduced trader enthusiasm for the asset.
Over the past year since April 2024, silver prices have traded within a channel of 28,000–34,500. The last time silver traded in this range was more than 12 years ago. Prices have historically traded below this channel for most of the observed period. Therefore, the key support level stands at 28,000, with an additional support level at 28,900 within the channel.
Investors fear a potential recession due to US import tariffs. The resulting pressure on key industrial metals is expected to reduce production levels. This could also hurt export revenues for other countries, particularly in electronics shipments to the United States. Given that silver is used in small quantities in nearly all electronic devices, demand is likely to decline. Meanwhile, the US administration's broad trade restrictions may remain in place at least until the 2026 congressional elections, which would put additional downward pressure on silver prices.
Given potentially bearish investor sentiment, silver will likely face further downward pressure.
Strategy option: Sell at current price with take profit at 28,900 and stop loss at 31,300.
This content is for informational purposes only and is not intended to be investing advice.
