Silver Price Crash / Trump's 'Tariff Bomb' on Diwali Sends Silver Prices Crashing

US President Donald Trump's statement regarding tariffs. On China created a ripple effect in the silver market on Diwali. His acknowledgement that the proposed 100% tariffs on China weren't "sustainable" eased trade tensions, leading to a decrease in safe-haven demand for silver and a subsequent sharp decline in prices.

Global and Domestic Market Fallout

Globally, silver prices fell by 7% from their lifetime high of $54 per ounce to $50 per ounce, while in the Indian futures market, on the Multi Commodity Exchange (MCX), silver plummeted by ₹17,284 from its Friday lifetime high of ₹1,70,415 per kilogram to ₹1,53,131, marking a drop of over 10%. This also represented a decline of approximately ₹3,500 compared to Friday's closing price.

Factors Behind Earlier Price Surge

Previously, silver prices had been surging due to strong safe-haven demand, strong industrial applications, and a shortage in production. However, the perceived de-escalation of trade tensions between the US and China, fueled by Trump's remarks, diminished its appeal as a safe investment. Analysts also pointed to profit-booking by investors as a contributing factor to the sharp decline.

Gold Prices Show Volatility

While silver saw a steep fall, gold prices also experienced significant volatility, while after an initial surge in the morning, prices declined by midday before showing a slight recovery later in the day. On MCX, gold rose to ₹1,28,556, then dropped to ₹1,26,655 from its day's high, and was later trading around ₹1,27,700 per ten grams, while

Motilal Oswal: Bright Future for Silver

Despite the current dip, Motilal Oswal maintains a positive outlook for silver. The brokerage firm suggests that the current rally is indicative of a. Significant structural revaluation in the silver market, distinguishing it from previous speculative cycles. They believe that the industrial demand base is irreversible, implying that continuous price increases will be necessary to manage industrial consumption and encourage a modest increase in supply, hinting at future upward trends for silver.