Gold Price Hits Fresh Records as Chinese Insurers Buy, London Silver Gets 'Tight'
Friday, 3/28/2025 15:59
GOLD PRICES hit fresh record highs in Shanghai, London and New York on Friday as China's insurance industry began buying the precious metal, while silver jumped within 30 cents of new 12-year highs as the threat of US trade tariffs continued to suck bullion into New York warehouses, tightening availability in London.
Global stock markets sank, in contrast, with the Western world's MSCI index losing 1.2% to the lowest in 2 weeks – back when
gold prices first topped $3000 per ounce – as fears worsened over the impact of next Wednesday's 25% "Liberation Day"
US trade tariffs on imports of foreign-made autos.
Shanghai gold had earlier jumped by 1.7%, its 5th largest 1-day gain of the past 12 months, to end the week above ¥721 per gram after the first 4 of ten Chinese insurance companies approved to include the precious metal in their investment portfolios
"completed business preparations and entered the market" earlier this week.
London gold prices then leapt to hit $3086 per Troy ounce – up 18.2% in 2025 so far – with the 19th new daily US Dollar high of the year.
New York June futures, now the CME derivatives exchange's most active Comex gold contract, peaked at almost $3125, some 2.0% above the final price of the now expired March futures.
"The relatively modest appreciation in silver relative to gold belies a great deal of tightness in the physical market," says Jonathan Butler, head of business development & strategy at Japanese conglomerate
Mitsubishi's precious metals division.
"As
silver bars continue to be delivered into US warehouses to take advantage of the current arbitrage opportunity, and to move stock ahead of potential tariffs, this continues to be manifested as a forward market backwardation and associated high lease rates, together with elevated premiums for high quality metal."
With longer-term silver borrowing costs higher than short-term deals – suggesting a relative tightness of immediate supply – lease rates for 1-month loans in London eased a little on Friday morning, edging down 0.25 points to 5.23% per annum but still historically high after
hitting "near squeeze" levels for silver above 6.5% in early February.
The spot price of silver bullion today hit $34.57 per Troy ounce in London – the highest since October's 12-year highs and rising 19.7% so far in 2025 – after the price of Comex April futures had earlier peaked almost $1 per ounce higher, widening the incentive for bullion banks and other merchants to ship yet more inventory westwards across the Atlantic.
Both spot and futures prices then pulled back hard, dipping through $34 and $35 per ounce respectively, after new US economic data said inflation accelerated in February on the core PCE measure, reducing the odds of deeper interest-rate cuts by the Federal Reserve.
US silver stockpiles in CME-approved warehouses have now leapt by 47.0% since the start of the year as traders and investors attempt to guess whether the new Trump administration will include the industrially-useful precious metal in its trade tariffs policy.
"The European hours are pretty quiet in the morning these days," said Richard Holtum, CEO of metals and energy trader Trafigura, at the
Financial Times' Commodities Global Summit in Lausanne, Switzerland this week, explaining that now "you just wait for Trump to wake up and decide how your day is going to go" by watching the President's TruthSocial posts to see what's driving markets higher or lower.
For gold prices, the 4 life-insurance companies who joined the Shanghai Gold Exchange this week "have nearly 13 trillion Yuan in total assets and represent nearly 2/3 of the total potential buying impulse from this pilot program" of insurance-sector demand, says Canadian brokerage TD Securities' senior commodity strategist Daniel Ghali.
"We estimate that a 1% allocation into gold amounts to roughly $17.8bn of new fund inflows, equivalent to roughly 183 tonnes...equivalent to roughly half of the yearly global official central bank gold purchases on average over the last five years."
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