Background on Key Figures and Context
Donald Trump, the President of the United States, recently intensified his trade war by announcing new tariffs on various countries and commodities. This has had a significant impact on global markets, including precious metals like gold and silver.
Gold has historically been considered a safe-haven asset, especially during times of economic uncertainty and low-interest rates. The current situation has led investors to seek refuge in gold, causing its prices to rise.
Christopher Waller, the governor of the Federal Reserve, recently hinted at a possible interest rate cut this month. This expectation of lower rates has further bolstered gold’s appeal among investors.
Gold Price Increase
On Friday, the spot price of gold increased by 1%, reaching $3,356.93 per ounce—its highest level since June 24. U.S. gold futures also closed with a 1.4% gain, trading at $3,371.20 per ounce.
Over the week, gold prices rose by 0.58%. Aakash Doshi, Global Head of Gold Strategy at State Street Global Advisors, explained that investors are seeking safe-haven assets due to increased market uncertainty. He predicts gold prices will range between $3,100 and $3,500 by the end of the third quarter.
Silver Price Surge
Silver prices also experienced a notable increase, rising 3.9% to $38.46 per ounce—its highest level since September 2011.
The premium for U.S. silver futures, platinum, and palladium over London references increased following Trump’s announcement of tariffs on copper. This led to a rise in rental rates.
Platinum and Palladium Gains
Platinum gained 2.8% to $1,399.13 per ounce, while palladium increased by 6.5% to $1,216.12 per ounce.
The significant rise in palladium prices was attributed to speculation that Trump’s upcoming “important” statement about Russia might involve sanctions affecting the metal, according to Tai Wong, an independent metals trader.
Copper Prices Fall
In contrast, copper prices fell on Friday as investors anticipated that the 50% tariff on imports would erode demand. Speculators also took profits off the table.
Three-month copper on the London Metal Exchange dropped 0.4% to $9,664 per tonne, below its three-month high of $10,020.5 reached on July 2. Copper prices fell approximately 2% during the week, marking its second weekly decline.
Key Questions and Answers
- What caused the rise in gold prices? Investors sought safe-haven assets due to increased market uncertainty following Trump’s announcement of new tariffs.
- Why did silver prices increase? Silver prices rose 3.9% to $38.46 per ounce, its highest level since September 2011, as investors sought refuge in precious metals.
- What impact did Trump’s tariff announcements have on other metals? The announcement of tariffs on copper led to increased rental rates for platinum and palladium.
- Why did copper prices fall? Anticipation of reduced demand due to the 50% tariff on copper imports and speculators taking profits contributed to the decline in copper prices.
