Silver Prices Tumble 1.22% as U.S.-China Trade Truce Dampens Safe-Haven Appeal

Silver prices plunged to $31.82 per ounce on Thursday morning, marking a 1.22% decline amid improving risk sentiment following a US-China trade breakthrough.

The metal has fallen below the crucial $32.00 support level, triggering technical selling across global markets. The recent agreement between Washington and Beijing to temporarily lower tariffs to 30% and 10% respectively for 90 days is a notable development.

It has significantly reduced demand for safe-haven assets. This de-escalation in trade tensions has shifted investor focus toward riskier assets and away from precious metals.

Technical indicators paint a bearish picture for silver. The price has broken below its 50-day Exponential Moving Average, while the Relative Strength Index shows negative momentum despite reaching oversold territory.

The breach of an ascending channel pattern visible on the daily chart has accelerated selling pressure. The technical breakdown comes as traders anticipate the release of US Producer Price Index data.

Markets are now pricing in expectations for Federal Reserve rate cuts later in 2025, potentially in October rather than July. Asian markets reflected the global weakness, with Vietnamese silver prices dropping 14,000 VND/tael in both buying and selling directions compared to yesterday.

Silver Slips Despite Bullish Fundamentals

Indian markets also showed significant declines across major cities, with silver futures on the Multi Commodity Exchange down 1.24%. Despite current price weakness, silver’s fundamental outlook remains robust.

The market is experiencing its fifth consecutive deficit year in 2025, with industrial demand projected to reach a record 700 million ounces. Total global silver supply is forecast to grow by 3% to 1.05 billion ounces, insufficient to meet expected demand of approximately 1.20 billion ounces.

The gold-silver ratio has reached extraordinary levels exceeding 100:1, approaching figures previously seen only during extreme market dislocations like the 2020 pandemic. This anomaly suggests potential for silver to outperform gold if historical patterns hold.

Market participants should monitor several key factors that could trigger a reversal in silver’s downtrend. These include resolution of geopolitical conflicts, particularly between India and Pakistan, monetary policy shifts toward easing, and potential mining disruptions.

Trading Economics projects silver to reach 33.55 USD/t. oz by the end of this quarter and potentially climb to 36.21 in twelve months. However, the immediate technical outlook suggests continued pressure as the market digests changing risk appetites and trade dynamics.

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