Gold and Silver Rate Explainer: US President Trump is about to gain significant power...will gold and silver prices then rise like this? Which...

News Topical, Digital Desk : A major reason for the recent surge in gold and silver prices is the US's Section 232 investigation. Any day, the Trump administration could claim that silver, copper, or other minerals pose a threat to US national security  . Once this report reaches the president, he gains direct authority to impose heavy tariffs. This fear is shaking markets worldwide. People believe that if the US takes such a drastic step, it will be difficult to control gold and silver prices.

Imagine you go to a gold shop and the shopkeeper says, "Brother, it looks like the price will rise further in the next few weeks. Buy it first." You wonder, what's going to happen?

The real story is related to an ongoing investigation in the US—Section 232 Investigation. This is a law that gives the US President immense power. If he deems a product (such as silver, copper, or any other metal) to be a threat to his "national security," he can impose an import tax of 25%, 50%, or even more. The Commerce Department conducts this investigation and submits its report to the President within 270 days. The President then has 90 days to decide whether to impose the tariff or leave it. This entire matter is like a button that Trump can press at any time, sending the global metal market into a tailspin. 

So, how will gold and silver be affected? Suppose the US imposes a 25–50% tariff on silver and related minerals. This means that silver supply in the US will become more expensive and scarce. And when the world's largest buyer is unable to obtain the goods, demand will increase further in the rest of the world. 

Increased demand will drive prices higher. This is called a supply shock. The second impact on the dollar is when the US imposes belligerent tariffs on the world, creating a trade war. In such an environment, the US dollar often weakens...and the world knows this: a weak dollar equals a strong gold. Because gold is bought and sold in dollars. A lower dollar, a higher gold.  

Third impact: People panic and run to safe havens. As soon as talk of a trade war or tariffs begins, investors panic. The first destination for fear is gold and silver. These  are always considered safe investments . Therefore, upon hearing Section 232, hedge funds, major investors, and even countries start buying gold and silver. This automatically triggers a rally. 

What will happen in India? People in India already complain about the rising prices of gold and silver...and if the US imposes tariffs, two things will happen in India: gold on MCX could exceed Rs 1.5 lakh per ten grams, and silver could cross Rs 3 lakh per kilo. Jewelry manufacturing will become more expensive. People's pockets will be further stretched during the wedding season. 

The government will also be concerned about rising import bills, as India buys gold from abroad. This means that a decision by the US will have repercussions at home. 

What could be the next step? The market believes that the Section 232 report could reach President Trump at any time. If he declares a national security threat , the gold and silver rally is unstoppable. There will certainly be some fluctuations in the short term, but the overall outlook for precious metals appears bullish in the long term. Gold and silver prices are once again in the news as the Section 232 investigation begins in the US. This investigation is conducted under the Trade Expansion Act of 1962, which empowers the US President to impose heavy import tariffs on any product in the name of "national security."

The entire process is handled by the Commerce Department, which determines which imports pose a threat to US security.

The Section 232 process is fairly straightforward. The Commerce Department is initially given 270 days to complete the investigation.

The report is then sent to the White House. The President has 90 days to decide whether to impose tariffs of 25%, 50%, or more on a product.

In 2018, Donald Trump invoked this section to impose 25% tariffs on steel and 10% on aluminum, sparking a global trade war.

Now, in 2025, the Trump administration has initiated Section 232 investigations on silver, copper, and several critical minerals. This move has created extraordinary turmoil in the precious metals market.

Markets believe that if the US imposed tariffs of 25-50% on minerals related to the silver or gold supply chain, it could create a supply shock.

The US is a major importer of many metals globally, and sanctions could increase demand pressure on other countries. This could push up gold and silver prices in the global market.

Furthermore, whenever the possibility of a trade war between the US and the rest of the world increases, the dollar weakens. A weakening dollar means precious metals like gold and silver become more attractive.

Section 232 Investigation 
A. Section 232 is part of the Trade Expansion Act of 1962. It gives the US President the authority to impose import tariffs on any product in the name of "national security." Under this, the Commerce Department investigates whether a product is harming US security.

How does this investigation proceed?
Its process takes place in two steps: Commerce Department investigation - prepares a report in 270 days.

Presidential decision - after the report is received, it is decided within 90 days whether to impose a tariff or quota on that product.

Has Trump used this before?
In 2018, Trump imposed a 25% tariff on steel and a 10% tariff on aluminum under Section 232. This sparked a trade war across the world.

What is Trump investigating now in 2025?
In 2025, the Trump administration has initiated Section 232 investigations on silver, copper, and several critical minerals. If the investigation deems these to be a "threat to national security," tariffs of up to 25–50% could be imposed.

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