Gold hits three-week peak, silver nears 14-year high
Kyiv • UNN
Gold prices rose to a three-week high, and silver approached a 14-year high, amid demand for safe-haven assets following Trump's tariff threats. Investors are awaiting US inflation data and a possible rate easing by the Fed.
Gold prices reached a three-week high on Monday, driven by demand for safe-haven assets after US President Donald Trump threatened to impose 30% tariffs on imports from the EU and Mexico, Reuters reports. Meanwhile, Bloomberg reports that silver is trading near a 14-year high, writes UNN.
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The price of spot gold rose by 0.1% to $3359.69 per ounce as of 06:37 GMT (09:37 Kyiv time), reaching its highest level since June 23 earlier in the session. US gold futures rose by 0.3% to $3373.30.
"We are seeing a return of safe-haven demand due to uncertainty regarding the implementation of US international trade tariff policies," said OANDA senior market analyst Kelvin Wong.
"The short-term outlook for gold looks positive, and if gold prices can close above $3360, they could potentially rise above the next resistance level at $3435," he said.
On Saturday, Trump threatened to impose 30% tariffs on imports from Mexico and the EU starting August 1, after weeks of negotiations with major US trading partners failed to reach a comprehensive trade agreement. Both the EU and Mexico called these tariffs unfair and destructive, while the EU stated that it would continue to suspend retaliatory measures against US tariffs until early August and would continue to push for a negotiated settlement.
Investors are now awaiting US inflation data for June, to be released on Tuesday, for more information on the Federal Reserve's interest rate trajectory. Markets are currently pricing in a Fed rate cut of just over 50 basis points by December.
Gold, often seen as a safe-haven asset during economic uncertainty, typically performs well in a low-interest rate environment.
Restraining gold's rise, the dollar index rose 0.2% against a basket of competing currencies, making gold more expensive for holders of other currencies.
In the week ended July 8, gold speculators reduced net long positions by 1,855 contracts to 134,842.
Spot silver prices rose 1.5% to $38.93 an ounce, platinum fell 1% to $1384.81, and palladium fell 0.7% to $1208.15.
According to Bloomberg, silver is trading near a 14-year high, thanks to investors seeking alternatives to near-record gold prices and the perceived risk of Washington imposing additional tariffs on metals, which would lead to a reduction in physical supply.
Spot silver prices rose 1.6% in Asian trading after a 4% increase last week, which pushed it to its highest level since 2011. The apparent cost of borrowing the precious metal for a month exceeded 6% compared to a typical level close to zero, indicating increased market tension.
Meanwhile, the spread between London spot and September futures contracts in New York remains extremely wide, as it was at the beginning of the year, when fears of tariffs provoked a sharp increase in gold and silver shipments from London to the US, leading to price increases, the publication writes.
"Demand for silver is currently growing amid the threat of trade wars and the fact that bullion has become unavailable to many potential buyers," said Priyanka Sachdeva, an analyst at Phillip Nova Pte Ltd. Although the metal is not currently subject to Trump's tariffs, "physical and industrial players in the US want to secure supplies before potential tariffs are announced," she added.
This year, the metal has risen by 35%, surpassing gold's 28% increase. It has a dual function: it is a safe-haven asset, as well as an industrial material used in solar panels. According to the industry group Silver Institute, the market is on track for its fifth year of deficit.