$33 Silver Cuts Gold/Silver Ratio as US Stocks Rally on Inflation Miss
Wednesday, 3/12/2025 14:33
GOLD held steady but silver rose yet again Wednesday, pulling down the Gold/Silver Ratio of the 2 former monetary metals' relative prices as weaker-than-expected US inflation data spurred a rally in Western stock markets.
The rebound in equities came just as a growing consensus that the new US President will not offer a "Trump put" to stem the slump in New York's stock market coincided with a sharp about-turn in White House trade tariff and foreign policy.
With S&P500 futures rallying 1.0% from Tuesday night's 6-month closing low, the price of gold traded in an $8 range either side of $2914 per Troy ounce after new data said US inflation slowed more than analysts expected in February, down to 2.8% per year in total and 3.1% on the 'core' measuring excluding food and fuel.
Silver in contrast spiked within 25 cents of a 6-month high, hitting the highest since mid-February at $33.18 per Troy ounce.
The more industrially-useful precious metal had earlier fixed at London's midday benchmarking auction above $33 for the 1st time in almost a month after topping that level – a 12-year high last fall – a total of 11 times between October and February.
On a relative basis, that edged the price of 'safe haven' gold in terms of
industrially-useful silver down towards 88, the lowest since New Year.
Averaging just less than 83 so far this decade after averaging 65 since the turn of the Millennium,
the Gold/Silver Ratio hit a 2.5-year high close to 92 at the end of February.
"The longer US stocks remain under pressure, the more we are going to see tariff reprieves/delays," writes precious metals strategist Nicky Shiels at Swiss bullion refining and finance group MKS Pamp, summarizing the consensus view that "Trump's scorecard for himself is the Dow" index of US equities.
"[But] that is NOT the case."
Having
doubled import tariffs on Canadian steel and aluminum to 50% on Tuesday, however, the new US administration reversed that move just hours later as senior White House trade adviser Peter Navarro "encouraged our friends in Canada to keep the rhetoric down."
Washington also confirmed that it has resumed military shipments and intelligence sharing with Ukraine – both halted following
the fractious Oval Office meeting between President Zelensky with Trump and US Vice-President J.D.Vance – as the Ukrainian leader agreed to a 30-day ceasefire at talks with the USA and other Western nations in Saudi Arabia.
"If Russia says no, it'll tell us a lot about what their goals are and what their mindset is," says Trump's representative at the talks – so far held without any Russian involvement – US Secretary of State Marco Rubio.
Wednesday's US inflation data saw market-priced odds that the Fed will still be holding rates at the current level until July rally to more than 1-in-4. But that was still barely 1/3rd the certainty shown this time last month by derivatives exchange's the CME's FedWatch tool.
Longer-term US borrowing costs also edged higher despite the weak inflation data, rising to a 2-week high of more than 4.32% per annum on 10-year Treasury bonds.
Russia today re-took its far western border region of Kursk from Ukrainian forces, and claimed to have neutralized a mass drone attack on Moscow.
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