Commodities Rout: Silver Crashes 7% as Trump Scraps 'Critical Mineral' Tariffs

A massive speculative unwind hit the precious metals market on Thursday and Friday, with Silver (XAG/USD) crashing significantly from its recent highs. The catalyst was a policy pivot from the Trump administration, which announced it would not impose blanket tariffs on critical mineral imports, opting instead for bilateral negotiations.

The Tariff Premium Evaporates

Over the past quarter, Silver had rallied aggressively, outperforming Gold, partly on the thesis that US protectionism would fracture global supply chains and squeeze physical availability. The White House's decision to exempt these materials removed the geopolitical risk premium instantaneously.

• Price Action: Spot Silver fell from historic highs above $93 to test support near $86, a daily drop exceeding 7% at the trough.
• Institutional Warning: Analysts at BMO Capital Markets noted that the Gold/Silver ratio had compressed to 50, a decade low, warning of a “speculative bubble” driven by hoarding rather than industrial consumption.

Systemic Impact on XAU/USD

Gold was not spared, tumbling toward $4,605. While Silver suffered from specific policy news, the broader precious metals complex is facing headwinds from strong US economic data (specifically low Jobless Claims), which has revitalized the US Dollar Index (DXY) and pushed bond yields higher.