Or on Saturday, the results of the US Section 232 tariff investigation will be released! Silver, platinum, and palladium will face "significant uncertainty"

The results of the U.S. critical minerals Section 232 tariff investigation are expected to be announced this Saturday (January 10) (UTC+8), and this decision will have a significant market impact on Comex silver and platinum group metal prices.

According to Chasewind Trading Desk, on January 8 (UTC+8), the Citi Kenny Hu research team believes that,if no tariffs are imposed, metals will flow from the U.S. to other regions, easing the current extremely tight market conditions and putting downward pressure on London spot prices.

In the event of tariffs, there will be an implementation window of about 15 days, which will trigger a short-lived “rush to ship from the U.S.” behavior, pushing up U.S. benchmark pricing and exchange futures premiums (EFP) further before the tariffs are imposed. After tariffs are enacted and imports decline, the supply of non-U.S. metals will then improve and the pressure on London spot prices will ease.

The investigation results were originally scheduled to be submitted by October 12, 2025, and President Trump has 90 days to take action, which means the deadline is about January 10 (this Saturday) (UTC+8). However, Citi believes that,given the large number of goods involved, President Trump’s actions may be indefinitely delayed, so during this period, silver and platinum group metal prices are likely to continue rising.

As of January 7 (UTC+8), EFPs pricing shows the market expects a platinum tariff rate of about 12.5%, palladium about 7%, and silver about 5.5%. These implied tariff rates reflect market uncertainty amid high volatility.

(Expected tariff rates based on EFPs pricing)

Silver is likely to avoid tariffs and may face price correction

Since the U.S. relies heavily on imported silver, the Citi research team favors the baseline scenario of no tariffs on silver, and even if there are tariffs, major exporting countries such as Canada and Mexico may be granted exemptions.

Without tariffs, silver prices may face temporary downward pressure.

From historically high lease rates, it can be seen that in markets outside the U.S., there is currently a severe physical shortage of silver.Without tariffs, this will incentivize metals to flow out of the U.S., easing global market tightness.

(Lease rates remain at historic highs, indicating extremely tight supply in the physical market)

It is worth noting that,the timing of the tariff decision may coincide with the annual index rebalancing window.Wallstreet Insights mentioned that the Bloomberg Commodity Index (BCOM) annual rebalancing will begin after the close on January 8 (UTC+8) and continue through January 14 (UTC+8).

Citi expects this will result in an outflow of about $7 billion in silver, equivalent to approximately 12% of Comex open interest.Market liquidity improvement and price weakness caused by outflows from the U.S. may also temporarily suppress investment demand (such as ETFs).

Palladium most likely to face high tariffs, platinum outlook remains uncertain

The Citi research team believes that among the three metals,palladium is most likely to be subject to tariffs.The main reasons are twofold:

• Potential to increase domestic U.S. supply
  : The U.S. has the potential to increase its domestic supply of palladium . For example, by increasing domestic nickel or platinum mining and refining activities, more palladium can be produced as a byproduct. This reduces reliance on external imports, making tariffs more feasible from an industrial policy perspective.
• Strong industry lobbying
  : U.S. domestic industries (such as automotive catalytic converter manufacturers or mining companies) have strong political lobbying power and may support tariffs to protect local industries or stimulate domestic investment.

Therefore, the report’s baseline assumption is that palladium will face a high tariff rate, such as 50%.The research report emphasizes that if a high tariff is imposed on palladium,short-term prices will soar, and palladium import costs in the U.S. will rise sharply, pushing up U.S. benchmark futures prices and EFPs (basis premiums).

In the long term, a “two-tier market” will form between the U.S. market and other regional markets. This will permanently change trade flows and pricing logic.This means:

The U.S. becomes a price highland: Due to tariff barriers, U.S. palladium prices (such as NYMEX futures) will systematically and consistently be higher than prices at the global major pricing center in London.

The premium reflects tariff costs: This price difference (premium) will roughly reflect the tariff rate plus related logistics and financing costs, becoming a “domestic market premium” that U.S. buyers must pay.

Changes in trade flows: Global palladium will tend to flow to regions with no or low tariffs, while the U.S. market will rely more on domestic supply and a handful of tariff-exempt import sources (such as potentially Canada and Mexico).

As for whether platinum will be subject to tariffs, the Citi research team is uncertain and considers it a “coin toss.”

The U.S. is more dependent on platinum imports, and the potential for increasing domestic supply is lower, which reduces the likelihood of tariffs. However, platinum may still be subject to tariffs along with palladium.

It is noteworthy that platinum and palladium inventories on the New York Mercantile Exchange remain near historic highs. Recently, there has been a strong inflow into PGM ETFs, further tightening physical supply. CFTC managed money position has turned net long for the first time since 2022.

(Platinum and palladium inventories at the New York Mercantile Exchange remain near historic highs)