Spot silver prices fell on Tuesday as investors took profits following last week’s rally. Changing monetary policy, uncertainty surrounding tariffs, and a limited safe-haven response to Middle East conflict all weighed on prices.
Federal Reserve officials influenced the metal’s decline. Chicago Fed President Austan Goolsbee and Fed Governor Christopher Waller stated that interest rates should not drop until inflation reaches the Fed’s 2% target. Waller’s comments strengthened the U.S. dollar, which reduced foreign demand for dollar-priced silver. The chance of a June rate cut fell to 43.9% from 50.2% last week.
Confusion over tariffs also affected markets. The White House announced a 15% global tariff on March 1st, adding to uncertainty. Silver has not gained from Middle East events as much as gold. Its industrial use means it reacts differently to geopolitical tension than gold.
Weak sentiment in China’s industrial sector contributed to silver’s decline. This followed a +4% price rally last week, leading to profit-taking. Despite Tuesday’s fall, silver remains up nearly 24% year-to-date. XAGUSD traded at $87.21 late in the session, down $0.98 or 1.10%. The market held above a key 50% level at $83.61 and its 50-day moving average at $82.72.