Silver (XAG/USD) jumped about 4% on Monday as investors sought safe-haven assets, alongside Gold. The rise followed shifts in trade policy and higher geopolitical risk.
On Friday, the US Supreme Court struck down tariffs issued under emergency powers. In response, the US administration turned to Section 122 of the Trade Act of 1974 and said it may roll out a 15% flat global tariff in the coming months.
Key Drivers Behind The Rally
US-Iran nuclear talks remain stalled. Economic data also weighed on sentiment, with Q4 GDP at 1.4% and PCE inflation at 3.4%.
Supply concerns also helped lift Silver. The market is on track for a sixth straight annual deficit, with a projected shortfall of 67 million ounces in 2026. Demand is supported by industrial uses such as solar, electric vehicles, and semiconductors.
On the chart, Silver briefly hit $88/ounce for the first time in three weeks and held above the 200-period EMA at $82.17. This move followed a rebound from a $72.00 low in mid-February.
The Stochastic Oscillator climbed above 90, signaling overbought conditions. Resistance sits near $90.00 and then $92.00. Support is around $84.00 and $82.00. A clean break above $90.00 could open the door to $100.00.
Trade Policy And Market Positioning
Tariffs are import duties paid at the port of entry by importers. Taxes are paid at purchase by individuals and firms. In 2024, Mexico, China, and Canada made up 42% of US imports, with Mexico alone at $466.6 billion.
The fast push to $88 reflects real concerns about stagflation and trade wars. However, the overbought stochastic suggests the rally may pause in the near term. One approach is to buy out-of-the-money call options—such as March $92 calls—to keep upside exposure while limiting risk. This can capture a move toward $100 without taking full downside if prices pull back.
Fundamentals still support a bullish view. The market is heading into a sixth straight year of supply deficits. Silver Institute data from late 2025 showed industrial demand—especially from solar panels and electric vehicles—rose more than 15% last year, tightening the physical market. This shortage can help support prices, even if short-term profit-taking appears.
We have seen similar setups before. The current mix of slower growth and sticky inflation echoes the 1970s, when precious metals had a major bull run. The 2018–2019 tariff disputes also showed that safe havens like Silver can perform well when trade policy is uncertain. A proposed 15% global levy would be a larger shock, which suggests the rally could extend.
The new tariff plan also focuses on key trading partners. U.S. Census Bureau data from last year shows Mexico and Canada together accounted for nearly $800 billion in imports during 2025. If either country responds with retaliation, tensions could rise further and push more money into hard assets like Silver. Watch for statements from Ottawa or Mexico City, as they may be the next major catalyst.
For futures traders, it may make sense to wait for a small pullback before going long. A dip toward the $84 support area could offer a better entry and reduce the risk of buying near a short-term top. Consider stop-loss orders below the key 200-period moving average near $82 to limit downside.
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