FX.co ★ Silver Pulls Back on Profit-Taking Amid Trade Jitters

Silver experienced a significant decline of nearly 3%, falling below $51 per ounce on Tuesday. This decline marks a pullback from its record highs, prompted by escalating concerns over a prolonged trade conflict between the United States and China. The situation intensified as China imposed restrictions on five American units of Hanwha Ocean, in retaliation against investigations launched by Washington into Chinese maritime, logistics, and shipbuilding sectors. The tensions escalated further as both countries enforced additional port fees on ocean shipping companies.

Despite the current dip, silver prices remain high, following a sharp rally driven by a historic short squeeze and tightening liquidity conditions in London. This scenario has compelled traders to seek physical supply across the globe. In London, lease rates surged by over 30% on Friday, pushing the costs involved in rolling over short positions to unmanageable levels. Additionally, robust demand from India in recent weeks has further constrained silver supply, following earlier exports to New York due to apprehensions that silver might become a target of US tariffs.