US-China Tariff Fears Push Gold and Silver to Multi-Year Highs
- Gold rises above $4,060 an ounce, marking its eighth consecutive weekly gain.
- Silver nears $51, while platinum and palladium rise over 2% on trade and tariff fears.
- Safe-haven buying is driven by geopolitical risks, potential tariffs, and market volatility.
Gold prices soared to a new record on Monday, climbing above $4,060 an ounce, as concerns over US-China trade tensions drove investors toward safe-haven assets. The rally marked gold’s eighth consecutive weekly gain, reflecting strong demand amid geopolitical and economic uncertainties.
Silver also moved higher, rising as much as 1.1% to near $51 an ounce, following an historic short squeeze in London. The precious metal market was further supported by fears of potential US tariffs on other metals, which pushed platinum and palladium up more than 2% each.
This year, precious metals have seen significant gains, with gold, silver, platinum, and palladium surging between 50% and 80%. The rally has been largely driven by central bank purchases, growing holdings in exchange-traded funds, and interest rate cuts by the US Federal Reserve. In addition, safe-haven demand has been bolstered by repeated US-China trade tensions, concerns over the Fed’s independence, and a looming US government shutdown.
On Sunday, China called on the US to halt tariff threats and return to negotiations, warning of potential retaliation if Washington imposed new measures. Meanwhile, US President Donald Trump, who had threatened an additional 100% tariff on Chinese goods last week, adopted a more conciliatory tone over the weekend.
Kyle Rodda, an analyst at Capital.com, noted that the flare-up in trade tensions 'provides strong support for gold', adding that while trade volatility may sometimes subside, it never disappears, which continues to favor precious metals.
Traders are also closely watching the outcome of the US administration’s Section 232 investigation into critical minerals, including silver, platinum, and palladium. Concerns that these metals could be affected by tariffs have tightened markets further, contributing to the recent short squeeze in silver after a large drawdown of available supplies in London.
The market saw unusual trading activity, with silver prices in London reaching near-record levels compared to New York benchmarks. Some traders even booked cargo flights for silver bars, a transport method typically reserved for gold, to take advantage of high premiums.
Spot gold gained 1.1% to $4,060.01 an ounce, trading at $4,028.28 in Singapore by early Monday. Silver was up 0.7%, holding above $50 an ounce. Platinum hovered near $1,630 an ounce, while palladium traded around $1,445 an ounce. The Bloomberg Dollar Spot Index remained mostly steady after gaining about 1% last week.
With trade tensions still simmering and US economic policies in flux, precious metals continue to attract investors seeking stability, keeping gold and its peers at the center of market attention.
