Silver prices plunge Rs 3,000/kg amid fears of demand slowdown, weighed down by Trump tariffs

The price of silver contracts plunged by nearly Rs 3,000 per kg or 2.8% on MCX to hit the day’s low of Rs 96,917 on Friday, taking cues from global silver prices. The downfall was on account of fears that the industrial demand for the white metal could go down in the event of a global slowdown after US President Donald Trump’s reciprocal tariffs came into effect.

The new tariff regime is seen to be inflationary and slow down the growth of US and other economies.

On the Comex, silver prices were trading at $33.58 per troy ounce while declining by $1.07 or 3.09%.

Contrary to Silver’s rout, gold was trading with minor gains around 1 pm today, though conceding its morning gains. The June contracts hit a fresh lifetime high of Rs 91,423 per 10 gram as the haven appeal grew as a result of current uncertainties. It was trading at Rs 90,820 around this time.

However, on the Comex, yellow metal futures were trading at $3,148.10, down by $18.10 or 0.7%.

Commenting on the current development, Naveen Mathur, Director – Commodities & Currencies, Anand Rathi Shares and Stock Brokers said that although such inflationary fears could bring safe haven flows into gold, silver could continue to remain lacklustre on concerns of global slowdown in economic growth.Notwithstanding this, silver’s industrial deficit is expected to persist in 2025, which could support the cause of this bullion metal, he added. Though he said that the deficit anticipation is relatively lower than in 2024.May silver contracts on the MCX have hit a high of Rs 1,04,072 per kg and breached the Rs 1 lakh mark multiple times in March.

Concerns of industrial slowdown had started to persist after it was known that the US tariff policies would kick-in post April 2.

“Overall, Silver’s relative undervaluation, supply concerns in the long term, and monetary appeal could still set it up for better gains in 2025 as compared to gold. However, in the near term, we do anticipate further 2 – 3 % correction in prices in the coming days, which could remain a buying opportunity for a medium-term perspective of 2 – 3 weeks,” this analyst said.

Trump has imposed a 26% tariff on Indian goods while levying 34% on Chinese imports to the US. Both India and China are among the world’s biggest consumers of gold and silver.

Also Read: Trump tariff tidal wave hits markets: Why India may dodge the trade bullet

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