Silver Jumps, Gold Rallies as SLV Swells, Consumer Expectations Sink Under Trump
Tuesday, 3/25/2025 17:19
SILVER JUMPED and gold rallied against a weaker US Dollar on Tuesday as more flip-flopping over President Trump's April 2nd 'Liberation Day' trade tariffs saw the giant SLV silver-backed ETF surge in size and coincided with fresh evidence that US consumer confidence is sinking under his new administration.
With the USA importing over 30% more silver than its own mining industry produces each year – three-quarters of it from Trump's prime tariff targets of Mexico and Canada – stockpiles of the industrially-useful precious metal in Comex-approved warehouses have now leapt by nearly 1/2 since the Republican's victory in November's election, surging past 2 years' worth of total US silver demand.
Trump promised
"flexibility" on trade tariffs yesterday, and is now "considering
a two-step approach to his new tariff regime," claims the
Financial Times, citing un-named White House sources for a plan to impose "emergency duties" on April 2nd while research and legal work on longer-term tariffs against specific trading partners are developed.
US consumers’ expectations for the future have sunk to a 12-year low,
the Conference Board think-tank and business organization said today, echoing
the collapse in US consumer confidence reported last week by the University of Michigan's March survey.
"Comments on the current administration and its policies, both positive and negative, dominated consumers' write-in responses," says the Conference Board as its outlook measure sinks into recession territory.
"There were also more references than usual to economic and policy uncertainty."
Silver's overnight rally took the price in Shanghai – entry point into China, the metal's No.1 industrial consumer – within 1.6% of last week's 10-month high, rising to ¥8222 per kilo and holding $2 per ounce above silver quotes in global trading and storage hub London.
With London quotes then rising as high as $33.80 per Troy ounce, New York's Comex futures contract for May held 50 cents higher, while the April gold contract – similarly the most-active futures contract currently traded on the CME derivatives exchange – held around $6 per ounce above London's spot price of $3022.
That New York-London spread for gold is markedly down from January's Trump tariff panic above $50 but higher from yesterday's
new 2025 NYLON gold arb low of just $2 per ounce.
"Gold
is still too low to reflect the [global economic] growth risks," says Max Layton, global head of commodities analysis at US financial giant Citi.
But more broadly, "any markets where you can trade US prices versus non-US prices, I would say all of them are underpricing the risk given what this administration's been telling you over and over," Layton goes on, naming copper, silver, platinum and palladium.
"The 6-month differentials [for US prices over global quotes] on silver and platinum are between 3% and 6%, whereas the tariff numbers are all above 10%.
"It's not our base case that gold is included in US tariffs, but it could be. Yet it's not even pricing in one per cent right now."
Giant silver ETF trust fund the iShares SLV yesterday saw its number of shares in issue jump by 3.1%, requiring an extra 424 tonnes of bullion to back its value.
Taking the SLV's total size up to the largest in 2 months at 14,148 tonnes, that inflow was the heaviest since 22nd July last year and the 9th heaviest 1-day inflow of this decade so far.
Smaller competitor the closed-end PSLV from Canadian brokerage Sprott last week grew to a fresh record size, needing 5,627 tonnes of bullion to back its shares in issue.
Investor demand for PSLV, however, continues to leave its share price at a discount to the value of the metal needed to back it, with the trust now trading below its net asset value (NAV) for almost 4 years without pause.
Added together, the SLV and PSLV now match a little over 77% of one year's total world silver mine output.
That
output is set to lag global silver demand for the 5th consecutive year according to analysis by specialist consultants Metals Focus for the mining industry's Silver Institute.
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