The start of this week saw the prices of silver and gold reach new highs as trade tensions between China and the United States continue to deepen. Silver saw its price hit $51.71 an ounce, a 1.9% increase, making its yearly increase thus far 78.9%. Comex silver futures surged to $50 an ounce for December delivery while spot gold also surged by almost 3% to reach $4,095 an ounce, bringing its annual gain so far to 56.6%. This is its largest year-on-year gain since the oil shocks experienced in the 70s.
This comes after President Trump accused China of hostility following its decision to reinforce restrictions on exports of rare earth metals required for different technologies.
Trump also threatened to introduce 100% tariffs on the East Asian nation, an announcement that saw the S&P 500 decline by 2.7% while the Nasdaq Composite dropped 3.6%, registering their sharpest one-day losses since April when President Trump announced his ‘Liberation Day’ tariffs.
Beijing’s response urged continued dialogue to address unresolved trade matters, with its Ministry of Commerce adding that constantly resorting to the imposition of steep tariffs wasn’t a constructive approach to managing relations. The ministry noted that if America continued down this path, China would implement reciprocal measures to defend its lawful rights and interests.
America is currently reassessing whether silver qualifies as a ‘critical mineral.’ More than half of silver’s demand stems from industrial and technological applications, and the metal is now in its fifth consecutive year of significant global supply shortfalls relative to demand.
In accordance with the newest U.S. tariffs targeting specific countries, platinum group metals and silver remain exempt solely in newly mined doré form and wholesale bullion-bars. This contrasts with gold, which is zero-rated across all industrial powders, coins, leaf and bullion bars.
ANZ’s senior commodity strategist, Daniel Hynes, explains that heightened trade uncertainty has caused an increase in the demand for gold and other precious metals. Prices of gold in major currencies have also risen, with the price of gold on the Shanghai Gold Exchange surging to ¥924 a gram.
In pounds, the yellow metal saw its price hit £3,061 an ounce, representing a 1.9% increase. In euros, wholesale bullion also hit €3,529 an ounce, representing a 2% gain.
Additionally, platinum and palladium have recorded significant increases in their prices, moving to $1,665 an ounce and $1,469 an ounce respectively. Analysts suggest that ongoing geopolitical instability, coupled with concerns over global supply chain disruptions, could continue to support elevated prices across the precious metals market in the coming months.
For companies like Platinum Group Metals Ltd. (NYSE American: PLG) (TSX: PTM) engaged in the extraction of gold, platinum and other precious metals, the current market conditions are primed for investor interest to keep ticking upwards.
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