India’s surprise doubling of import duties and rising US yields send silver below $80; industrial demand provides floor but technical test looms at 50-day moving average.
A brutal combination of policy shock from Asia and renewed macro headwinds sent silver tumbling more than 9% on Friday, wiping out weeks of gains. The white metal closed the week at $77.55 per ounce, having sliced through the psychologically important $80 level as if it were paper. With the 50-day moving average now under direct fire, traders are bracing for a critical test in the sessions ahead.
New Delhi’s Tariff Hammer
The most disruptive catalyst came from India, where the government unexpectedly doubled import duties on gold and silver to 15%. The new levy is a compound of a base tariff and an agricultural cess, effectively reversing the tax cuts implemented only in 2024. New Delhi’s move is a clear attempt to rein in a widening trade deficit after silver imports surged 44% last year to top $9 billion and January gold purchases hit record highs. Industry insiders warn that the sharp hike could revive smuggling networks, undoing years of formalization.
Macro Winds Shift Against Silver
The regulatory blow landed in an already fragile environment. US Treasury yields jumped sharply on Friday, sucking speculative capital out of non-yielding assets like silver. The greenback strengthened as markets repriced Federal Reserve expectations: hopes for rate cuts have all but evaporated, and some traders now position for a hike before December. For buyers outside the dollar zone, silver became suddenly pricier, damping global demand.
Rising inflation fears—fueled by the ongoing Iran conflict and the Strait of Hormuz blockade—added another layer of pressure. The precious metal now trades more than a third below its late-January record near $117.
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Industrial Demand Keeps the Floor Firm
Despite the speculative selloff, the physical market tells a different story. Structural deficits persist for the sixth consecutive year, with global inventories drained by hundreds of millions of ounces over that period. Industrial consumption remains the bedrock: solar panel manufacturing, electric vehicles, and artificial intelligence data centers are all voracious users of silver’s unmatched conductivity. Photovoltaic cells and specialized connectors in server farms leave little room for substitution.
A recent US-China tariff truce also bolsters the industrial outlook, providing a partial offset to India’s import squeeze. While financial investors flee, fabricators keep buying.
Chart Levels to Watch
Friday’s close landed silver precisely on its 50-day moving average near $77. A break below that line on a closing basis would open the door to the $70 support zone. Conversely, reclaiming $81 would signal that the bulls are regaining control. The medium-term resistance around $85 remains the target if the technical floor holds.
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For now, silver is caught between a tightening policy vise in India and a hawkish repricing of US monetary policy—two forces that will determine whether the current rout deepens into a new downtrend or finds a base in physical demand.
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