Hedge Funds Slash Silver Bets to 22-Month Low Amid Tariff Pause

COMMODITIES

Overview

Large speculators drastically reduced bullish silver positions to a near two-year low. This shift occurred as the U.S. refrained from imposing import tariffs on critical minerals, including silver, a move that had previously fueled the precious metal's rally. Uncertainty regarding future tariffs remains.

Silver prices faced renewed pressure as major investment funds aggressively cut their optimistic positions. Hedge funds and large speculators dramatically reduced net-long contracts, slashing bullish wagers on the white metal to the lowest level in almost two years. This positioning shift occurred just before the White House opted against implementing import tariffs on critical minerals, a category that includes silver.

Speculative Positions Plummet

Data for the week ending January 13 revealed a significant pullback. Money managers decreased their net-long positions by 15%, bringing the total to 15,045 contracts. This marks the lowest accumulation of bullish bets seen in over 22 months, signaling waning speculative appetite for silver's upside.

Tariff Threat Eases, But Lingers

The potential for U.S. import duties on minerals, including silver, had been a key catalyst behind the precious metal's recent surge. However, President Donald Trump decided against imposing sweeping tariffs on Wednesday. While the immediate threat has subsided, the administration did not rule out future actions, leaving a degree of uncertainty in the market. This policy ambiguity adds a layer of complexity to silver's outlook.

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