Spot silver fell on Tuesday after a tariff-driven surge over the weekend lifted prices by about 6%. After jumping more than 6% on Monday, XAG/USD eased to around $87.87 as traders took profits. President Trump announced a 15% global tariff, which boosted demand for safe-haven assets. The announcement came after a US Supreme Court ruling that struck down broader emergency tariffs.

Supply Deficit Outlook For Silver

The Silver Institute expects a supply deficit for a sixth straight year in 2026. Forecast shortfalls range from 67 to 120 million ounces. Demand from AI data centres, electric vehicles, and semiconductors is expected to offset weaker demand from solar panels. Markets now expect the Federal Reserve to keep rates unchanged in March. Traders have priced in about 60 basis points of cuts over the rest of the year. Delayed US jobs and CPI data, along with comments from several Fed officials, are likely to guide near-term price action. On the daily chart, silver fell about 1% on Tuesday and tested $85.00. Price remains above the 50-day EMA near $80.20 and the 200-day EMA near $57.85. The broader uptrend is still intact from the $60.80 low. Since early February, silver has traded in a range of about $75 to $90 after falling from $121.66. Resistance sits near $90 and then $92–$93. Support is near $85, then $80, with $75 below.

Strategy And Risk Management

With today’s pullback toward $87, we see a potential opportunity following the tariff-fueled rally. The profit-taking looks like normal consolidation. Safe-haven demand, supported by ongoing geopolitical tension, remains an important driver. We view this dip more as a possible entry point for bullish exposure than as a major trend reversal. We are considering call options with strikes above the $90 resistance area, such as $95 or $100, with expirations in the second quarter. Implied volatility jumped after Monday’s surge, which makes options more expensive. However, higher volatility also reflects expectations for larger price swings. This approach provides upside exposure while keeping maximum risk defined. For risk control, we are watching $85 as a key support level. A clear break below it could lead us to add protection by buying put options or opening short futures as a hedge against existing long exposure. The 50-day moving average near $80 is the critical level that needs to hold to keep the bullish structure intact. The expectation of a sixth straight supply deficit adds fundamental support. In 2024, the physical deficit reached a record level of more than 230 million ounces, helping to drive the rally through much of 2025. This structural imbalance suggests industrial demand could absorb dips caused by short-term speculative selling. The Fed’s steady position also supports the backdrop. The CME FedWatch tool shows more than a 90% chance that rates stay unchanged in March. That reduces near-term policy uncertainty and shifts attention to this week’s delayed jobs and inflation data. If the jobs report comes in weaker than expected, it could speed up expectations for rate cuts later this year and provide another boost for precious metals. Create your live VT Markets account and start trading now.

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