Gold Futures Rise for 3rd Week Ahead of Trump Inauguration
Friday, 1/17/2025 16:09
GOLD FUTURES for New York settlement continued to trade sharply above spot London bullion quotes on Friday, extending the dislocation sparked by President-Elect Donald Trump vowing to impose 10% trade tariffs on the import of any goods into the USA once he retakes the White House on Monday.
Comex February contracts traded at $2748 per Troy ounce, higher for the 3rd week running, as London bullion fixed around $2713 at the City's 3pm benchmarking auction.
While the surge in New York futures prices has spurred a flood of
metal shipments out of London into the US to beat the threat of Trump's tariffs potentially hitting bullion, London gold today set its highest Friday finish since the record weekend price seen on the eve of the Republican's sweeping election victory.
Trump's inauguration will coincide with Martin Luther King Day, when US stock, bond and precious-metal derivatives markets will be shut to honor the civil rights leader assassinated in 1968.
US equities today followed other Western markets higher today, taking the MSCI World Index 2.7% above Friday last week to set the index's highest level since Boxing Day.
Bond prices also rose, pulling long-term borrowing costs down for only the 2nd week in the past six, with 10-year US Treasury yields dropping almost 1/5th of a percentage point as strong US industrial output figures failed to offset the impact of
softer inflation and retail sales data.
With "bullion's blistering 2024 rally [meaning] inflated activity in the sector," says Reuters, French bank Société Générale is
returning to the precious metals market after quitting physical bullion in early 2019.
That was a year before the Covid pandemic saw the price of gold make its biggest annual jump in a decade.
Also planning to "re-enter global precious metals" says the news-wire is Japanese trading house Mitsui, whose
exit from bullion trading in 2015 preceded gold finally reaching the bottom of its post-financial crisis bear market.
Gold's gain this week – taking Yuan, Euro and UK Pound prices up to fresh all-time records – came despite the world's largest
gold-backed ETF investment product, the SPDR Gold Trust (NYSEArca: GLD), shrinking by 0.8% from last Friday.
Silver's giant SLV ETF meantime expanded 0.7% for the week by Thursday night's New York close, and silver prices then headed for their 4th weekly gain in a row on Friday, fixing close to $30.60 per Troy ounce at London's midday benchmark auction before sliding 40 cents on today's US data releases.
"The silver market has been in deficit for a while now," says a note from US financial giant Bank of America, "and those shortfalls [between supply and demand] finally count.
"Limited mine production growth [has become] a key source of price support," BOA says, with silver prices in India trading at a premium to London quotes – suggesting strong demand – while consumers in world No.1 manufacturing nation China must also "pay up to source ounces."
Platinum prices meantime lost 1.8% for the week in Dollar terms despite surging bullion demand in the US ahead of Trump's potential trade tariffs driving London's physical market back into backwardation, with prices for immediate or 1-month settlement rising above 3- to 6-month forwards.
The price of diesel – the fossil fuel for which platinum is essential in autocatalysts to reduce harmful emissions – also extended its backwardation this week as new US-EU sanctions against major oil producer Russia took hold, boosting the cost of immediate supplies in what was already a tight market thanks to winter in the northern hemisphere.
Trading down to $943 per Troy ounce today, platinum was overtaken at $952 by sister-metal palladium – more typically used in gasoline autocats – for the 2nd session in a row after trading more highly for almost a month.
Palladium last year averaged $30 per ounce more than platinum, the narrowest gap since Pd overtook Pt for the first time on modern records in 2017.
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