Gold’s incredible rally saw yet another jump in the price yesterday as markets continue to react to ongoing uncertainty in the US.
After a prolonged market close over the weekend, gold shot up on the market open yesterday and continued to climb throughout the day. Gold peaked this morning at a new all-time high of $3,501.27 per ounce but has pulled back on some inevitable selling pressure after the impressive $170 gain in just 24 hours.
In GBP, this pushed gold above £2,600 per ounce for the first time with a current UK record of £2,610.22. In Euros, gold hit €3,037, passing €3,000 for the first time. The pace and scope of gold’s gains is extremely positive, but selling pressure is likely to continue as markets return to full speed after the Easter break.
The US dollar came under increased pressure after President Donald Trump resumed his attack on Federal Reserve Chairman Jerome Powell. This was common towards the end of Trump’s first term, and his calls for a quick cut to US interest rates have seen the US dollar index drop to a three-year low.
With Powell warning that Trump’s tariff policies will drive prices higher however, there will be little room for the Fed to cut rates in the way Trump wants and the two will continue to clash in the near-term.
Tariffs are not going away either, with news today of an eye-watering tariff rate of up to 3,521% to be introduced on solar panels from Asian countries including Cambodia, Vietnam, Thailand and Malaysia. The tariffs on solar panels will not be good news to silver either, which sees much industrial demand from that sector.
Silver has failed to replicate gold’s gains of late, and the gold-silver ratio stands at 104 at the time of writing, the highest the ratio has been in roughly five years, when silver prices collapsed at the start of the Covid-19 pandemic on falling industrial demand. With gold breaking into new territory almost weekly, silver is overdue a strong catch-up and should begin to set it’s own all-time highs if the ratio returns to recent averages.
Gold is currently still at $3,456 per ounce, and seems to have stabilised somewhat after pulling back from the resistance point of $3,500. Selling pressure is likely to continue, but so far safe haven demand is outpacing any losses from selling. Retaking and holding $3,500 will be the next key milestone, as it heads towards current forecasts of $3,700 made by analysts last week.
