Physical gold markets surged again this morning, with spot prices climbing to $3,397.65 per ounce, up $64.06. The precious metal has renewed safe-haven demand triggered by President Trump’s unexpected announcement of a 100% tariff on foreign-produced films and planned pharmaceutical tariffs. Market participants are closely monitoring the Federal Reserve’s upcoming meeting, with expectations that interest rates will remain unchanged in the 4.25%-4.50% range. The U.S. dollar’s decline below the 100 level has further bolstered gold’s appeal as investors seek protection against economic and geopolitical uncertainties. Year-to-date, gold has appreciated approximately 28%, reflecting consistent central bank buying and strong investor confidence.
Silver markets followed gold’s upward trajectory with spot prices reaching $33.20 per ounce, up $0.71. Despite this positive movement, silver continues to underperform gold with the gold-to-silver ratio standing at a historically elevated 102.19:1, significantly above its traditional 45-80:1 range. This divergence is largely attributed to central banks’ preference for gold purchases following the freezing of Russian reserves in 2022. The physical silver market remains in a structural deficit for the fifth consecutive year, with a shortfall of 117.6 million ounces (11% of annual demand) underpinning price stability. Industrial applications continue to dominate silver consumption, though recent slowdowns in China’s solar panel production have placed some pressure on demand. Investment interest shows signs of renewal with physical bar and coin demand rising 7% to 204 million ounces year-to-date.
