Gold sank and silver prices tumbled on Thursday after the ‘safe haven’ metal spiked to yet another new record high but industrial commodities fell on US President Trump announcing massive trade tariffs against the rest of the world, but with an exemption for ‘bullion’.
The exemption crushed the price gap between New York Comex futures and London bullion – a gap which, in anticipation of trade duty perhaps being levied on bars and ingots, had sucked a record quantity of precious metal into the USA.
Peaking at $3167 per Troy ounce during early Asian hours – gold’s 21st new record of 2025 so far, and extending gold’s strongest calendar quarter in over 38 years – the price of bullion for London settlement then dropped 3.1% to erase all of this week’s previous gains before rallying to $3090.
Chart of London spot gold priced in the US Dollar, past 12 months. Source: BullionVault
Silver prices meantime sank by 6.8%, falling through $32 per Troy ounce for the first time in almost a month before rallying 30 cents to $32.15.
Silver sank even as the US Dollar itself plunged more than 2.0% against the rich-world’s other leading currencies, hitting 6-month lows on its DXY index.
That put the price of silver – which finds almost 60% of its annual end-use demand from industrial and technological applications – down at 9-week lows in UK Pounds and Euros, sinking to the middle of the past 12 months’ trading range at £24.20 and €28.75 respectively.
“Trade policy uncertainty has spiked (peaked?)” said Swiss bullion refining and finance group MKS Pamp’s metals strategist Nicky Shiels in a note ahead of Wednesday’s ‘Liberation Day’ announcement from President Trump.
“While Trump will maintain chaos (because it’s negotiating power)…assets that have been tariff sensitive may see a ‘sell-the-event’ knee-jerk reaction.”
As for the flood of gold and silver into New York warehouses ahead of Trump’s possible US trade tariffs, “There is too much metal sitting loco-NY given [both weak] local demand and the [low] probability of direct precious metal tariffs; the US is saturated at the expense of tighter markets in UK and Europe.”
Comex-approved warehouses now hold well over 4 years’ worth of total US gold demand – 2.5 times the quantity held on the eve of Trump’s second election victory – plus 4 years of US industrial silver demand, up by 80% since the start of November.
The ‘arb’ offered by Comex gold’s June contract over London bullion quotes sank as low as $20 per Troy ounce, down by 2/3rds from Wednesday’s peak.
Comex silver for May settlement meantime sank to just 20 cents per ounce above London bullion, slashing the gross incentive for sailing or even flying the bulkier precious metal west across the Atlantic from around $1 per ounce ahead of Trump’s bullion exemption – a level at which dealers had also begun locking in profit by settling physical deliveries onto buyers of Comex futures contracts.
Furthermore, “The Mexico and Canada exemptions under the erstwhile USMCA [trade deal signed by Trump 1.0] remain in place,” notes Rhona O’Connell at brokerage StoneX, also taking “tension out of silver” after the more industrially-useful precious metal showed signs of tight availability in London.
Global stock markets also sank, knocking as much as 3.0% off export-heavy bourses in Tokyo, Frankfurt and Paris, but trimming only 0.6% off Shanghai’s CSI300 despite Trump hitting China – the USA’s No.1 surplus trading partner – with import tariffs now totalling 54%.
“Some goods will not be subject to the Reciprocal Tariff,” said the White House’s ‘fact sheet’ Wednesday, released as the President spoke to reporters in the Rose Garden, listing “bullion” as a single-word item.
China’s Yuan currency managed to fall even against the Dollar, helping gold in Shanghai – the entry point for all bullion into private circulation in the precious metal’s No.1 mining, importing and consumer nation – set a fresh record at ¥744 per gram while holding the incentive for new imports from London above the historical average of $8 per Troy ounce.
London gold in UK Pounds per Troy ounce sank as low as £2330 after setting its latest record high at £2436 only on Monday.
The gold price in Euro fell even harder, down 5.6% from this week’s fresh records at €2911 to trade as low as €2748.
Silver’s steeper drop today put the Gold-Silver Ratio at a fresh 2.5-year high above 96 basis the London benchmark prices.
Source: Adrian Ash
