Gold and Silver Prices Extend US Premium to London Ahead of Trump's Tariffs
Thursday, 1/16/2025 16:20
GOLD and SILVER BULLION jumped to 1-month Dollar highs on Thursday in London, with gold hitting fresh all-time record prices in Euro and UK Pound terms, as US President-Elect Donald Trump – set to retake the White House on Monday with a vow to impose universal trade tariffs on all imports – claimed credit for a ceasefire deal between Israel and Hamas after 15 months of war.
Welcomed by foreign powers from Russia to Syria, Nato, the European Union and Qatar, the truce with Hamas wasn't put to Israel's Cabinet for approval, however, after Prime Minister Benjamin Netanyahu blamed the Iran-backed militia for "reneging" on key parts of the deal,
causing a "last-minute crisis".
"We have a deal for the hostages in the Middle East," said Trump in all-capital letters on his TruthSocial platform. "They will be released shortly.
Thank you!"
With US retail sales data coming in below expectations while new claims for US jobless benefits rose on the latest weekly numbers, the price of precious metals futures contracts in New York meantime rose faster still than London bullion.
That raised the incentive for precious metals bankers and brokerages to move gold or silver from London – or to pay currently
high EFP prices for switching a futures contract into physical bullion – ahead of Trump retaking the White House on Monday after vowing universal trade tariffs of 10% to 25% on all imports to the USA.
"There is no suggestion that the new administration will specifically target precious metals or indeed raw materials more generally," says a note from Jonathan Butler at Japanese conglomerate Mitsubishi, explaining that Trump's targets will most likely be value-added finished goods including cars, electronics and chemicals – "ie, things that the US could make."
On a raw supply/demand basis, "The US is fundamentally in a deep deficit across silver, platinum and palladium," notes Swiss bullion refining and finance group MKS Pamp.
Global silver supplies lagged global demand by a wide margin for the 3rd year running in 2024, according to data from specialist analysts Metals Focus, thanks to
record industrial silver demand.
Thanks to the USA's supply deficit, "white metals should not be targeted [by Trump's tariffs], because they are critical" to many key technologies, says
MKS Pamp strategist Nicky Shiels.
"But their associated industries will likely be targeted, which will leave them with unintended consequences and price dislocations."
With only 1 business day left until Trump's inauguration – and with gold bullion typically transported in the hold of passenger air flights – New York gold futures for February settlement traded $30 above London spot prices on Thursday, widening the CME exchange's Comex contract premium from yesterday's level of $23.
Silver in contrast is typically transported from London to New York by sea, making last Friday the last opportunity to book a standard shipment before Trump takes the oath of office for a 2nd time.
Yet March silver futures – now the most active Comex contract for the more industrially useful precious metal – today traded over $1 higher than London bullion quotes, also extending their incentive for new deliveries.
Latest data say that Comex-approved warehouses saw silver stockpiles swell by 0.3% on Tuesday, while gold holdings grew by 3.0%.
London gold bullion today fixed above $2716 per Troy ounce, the highest 3pm benchmarking since the day of Trump's election win and 1.1% higher for the week so far in Dollar terms.
Euro gold meanwhile fixed at a new all-time high near €2643 and the UK gold price in Pounds per ounce set a fresh record close to £2230.
London silver peaked at $30.91 per ounce – like Dollar gold, the highest since mid-December – as platinum rallied but held almost 3.0% below Monday morning's 8-week high of $974 per Troy ounce and sister autocatalyst precious metal palladium edged back to $955, down 1.8% from yesterday's US inflation-data spike to a 1-month high at that same level.
"Platinum ingots have been in strong demand in recent days," says Butler at Mitsubishi, "as market participants prepare for possible tariffs on imports into the United States.
"[Al]though this is looking increasingly unlikely, forward rates moved into a backwardation as metal for immediate delivery [became] increasingly well bid, forcing lease rates sharply higher in the near-term."
Nymex April platinum contracts today traded $5 per ounce above London spot quotes, marking a 0.5% premium as forward prices for physical bulion in the UK reverted to contango, with longer-term deals costing more than immediate settlement as normal.
Like London gold in Pounds and Euros per ounce, Shanghai gold prices in Chinese Yuan set a new all-time high earlier on Thursday, with the cost of wholesale bullion in the precious metal's No.1 consumer market fixing above ¥637 per gram.
With the key precious metals consumer festival of Chinese New Year now less than 2 weeks away, Shanghai silver also jumped on Thursday, rising 2.5% from Wednesday's benchmarking auction to set a 1-month high at ¥7827 per kilo.
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