One kilogram gold bullions at the YLG Bullion International Co. headquarters in Bangkok, Thailand, on Dec. 22, 2023. MUST CREDIT: Chalinee Thirasupa/Bloomberg (Chalinee Thirasupa)
Silver rallied to the highest since October after US President Donald Trump’s order for reciprocal tariffs increased uncertainty around trade and the global economy, bolstering haven demand. Gold traded near a record.
Silver climbed as much as 3.1% to exceed $33 an ounce, while gold headed for a seventh weekly gain - the longest run since August 2020. Trump on Thursday signed a measure directing the US Trade Representative and Commerce secretary to propose new levies on a country-by-country basis, a process that could take a while to complete.
Disruptions in trade and geopolitics typically draw investors to gold and silver as a hedge against instability.
Reciprocal tariffs would amount to Trump’s broadest action to address US trade deficits, yet his decision not to implement them immediately could be seen as an opening bid for negotiation rather than a sign he’s committed to following through. The president has already imposed 10% levies on Chinese goods and plans to slap 25% duties on all US steel and aluminum imports next month.
Central banks, including China’s, have been adding to their gold reserves, while holdings in bullion-backed exchange-traded funds also expanded in recent weeks, supporting gold’s 12% gain this year.
Spot silver rose 2.9% to $33.284 an ounce by 1:20 p.m. in London, taking this week’s gains to 4.6%. The Bloomberg Dollar Spot Index fell 0.2%. Gold, platinum and palladium were little changed.
Elsewhere, investors looked past hot inflation data amid signs the Federal Reserve’s favored price gauge will be softer than expected. The producer price index rose in January by more than forecast, but several of its components that feed into the Fed’s preferred inflation measure - the personal consumption expenditures price index - were more favorable last month.
Traders will dissect the PCE report on Feb. 28 for further clues about the central bank’s easing path. Lower borrowing costs typically benefit gold, as it doesn’t pay interest
With assistance from Preeti Soni and Andrew Janes.
