Goldman Sachs: Trump's Increased Steel and Aluminum Tariffs Trigger Silver Surge

After the Trump administration announced an increase in steel and aluminum tariffs from 25% to 50%, silver experienced a strong surge. This news led the market to anticipate that the U.S. government might implement similar trade protection measures on other key metals, such as silver, thereby boosting the demand for silver as a safe haven and alternative. Goldman Sachs futures trader Robert Quinn stated that the news of the U.S. raising steel and aluminum tariffs triggered significant long positions in the silver futures market. The total open interest in silver futures surged by $2.8 billion, marking the largest two-day increase in the past year. Although the EFP (Exchange for Physical) spread has been volatile, it generally trends towards a premium, indicating heightened market expectations of a near-term spot shortage. Meanwhile, the rise in silver prices has driven programmatic trend-following funds to enter long positions. Additionally, the options market also showed a bullish stance: the three-month implied volatility soared; the 25-Delta Put-Call Skew declined, indicating investors' preference for holding call options; the ratio of 5 Delta to 25 Delta call options rebounded, reflecting increased bets on extreme price surges. (Jin10)