Silver prices hovered near a record high, impacted by an unprecedented short squeeze in London and trade tensions between the United States and China, while gold hit a new peak. Meanwhile, fears that the White House could impose tariffs on competing precious metals led to a sharp rise in platinum and palladium prices.
Silver rose 1.1% to approach $51 an ounce, while platinum and palladium each rose more than 2%. Gold hit a new record high above $4,060 an ounce, following its eighth consecutive weekly gain on Friday.
Precious metals surge to record highs, supported by central banks
The four major precious metals have gained between 50% and 80% since the beginning of the year, in a rally that has dominated commodity markets.
Gold's advance is driven by central bank purchases, rising exchange-traded fund holdings, and interest rate cuts by the Federal Reserve. Recurring trade tensions between the United States and China, threats to the Fed's independence, and the US government shutdown have also helped boost demand for safe havens.
China called on Washington on Sunday to halt its threats to impose tariffs and return to the negotiating table, warning that it would respond if the United States proceeded with new measures. For his part, US President Donald Trump, who last week threatened to impose additional tariffs of 100% on Chinese goods, struck a more conciliatory tone over the weekend.
It seems that just as geopolitical and trade risks are starting to lose their tailwind for gold, we are seeing renewed tensions between the United States and China, said Kyle Rodda, an analyst at Capital.com. While both sides are open to further negotiations, trade volatility may subside but it will never go away, and that's very positive for gold.
Pressure on silver amid liquidity shortage in London
Traders are still waiting for the results of the US administration's Section 232 investigation into critical metals, including silver, platinum, and palladium. Fears that Trump's threatened tariffs could affect these metals have intensified, further tightening the market and partly paving the way for the historic short squeeze on silver. , after a significant decline in the free supply available in London.
Concerns about a liquidity shortage in London pushed the price of silver to a record high of $52.50 per ounce, set in 1980 on an expiring contract on the Chicago Board of Trade.
London's benchmark prices have risen to almost unprecedented levels compared to New York, prompting some traders to book space on transatlantic air freight shipments of silver bullion—a costly method typically used only for gold—to take advantage of the significant price differential in London.
Current market prices
Spot gold rose 1.1% to $4,060.01 per ounce, trading at $4,028.28 at 8:12 a.m. in Singapore.
The Bloomberg Dollar Spot Index was little changed after rising about 1% last week. Silver also rose 0.7%, surpassing $50 per ounce, while platinum reached around $1,630 per ounce and palladium around $1,445 per ounce.
