Geopolitical Risk Drives Gold Prices Higher; Silver Moves to Challenge $31/ozt

 

Trump’s First Week Drives Gold Toward New Heights

(Bullion News Network) – Gold prices will end the first week of President Trump’s second term in the green. The price of gold now sits at over $2,774 per troy ounce, within $16 of the metal’s all-time high. This recent bull run coincided with the first week of Donald Trump’s presidency, which was marked by a flurry of controversial executive orders and fiery public addresses. The President made good on many of his “Day One” campaign promises, including ending birthright citizenship and setting the stage for a slate of tariffs on America’s allies around the world. 

In an address to the Davos 2025 World Economic Forum, President Trump reaffirmed his interest in applying tariffs to imports from Europe, drawing an audible reaction from leaders in attendance. The President also promised that he would “demand” that interest rates decrease, reviving a feud with Federal Reserve Chair Jerome Powell that has continued for several years. Powell himself was asked shortly after the election whether or not he would step down if President Trump requested it. The Fed Chair’s response: “No.” In August, then-candidate Trump explained that he believes America’s highest office should have a greater say in the currently independent Federal Reserve’s rate cut decisions. 

I feel the president should have at least a say in there. Yeah, I feel that strongly […] I think that, in my case, I made a lot of money, I was very successful, and I think I have better instinct than, in many cases, people that would be on the Federal Reserve or the chairman.” 

This discourse could have a profound impact on precious metal prices. Interest rate speculation closely influenced gold prices in 2024, driving the precious metal to several all-time highs as traders reacted to the prospect of stimulating rate cuts. On his end, Powell has repeatedly emphasized that politics play no role in the FOMC’s decisions. Still, the degree to which the White House will attempt to influence the Fed to cut rates remains to be seen. 

Geopolitical uncertainty continues to drive precious metal prices. President Trump’s range of “Day One” executive orders promises to shake up the political landscape of the United States, but the leader’s tariff talks remain a key sticking-point for investors concerned with economic security. President Trump contends that universal tariffs would improve the competitiveness of U.S. industry and provide key funds necessary to pay down the national debt. Other experts disagree; some analysts say that an aggressive tariff policy would increase prices for American consumers and trigger costly trade wars with America’s allies. 

A full slate of geopolitical uncertainties is driving gold prices higher. If the trend continues into next week, markets may open 2025 with a new all-time high for gold. 

Silver Approaches $31 Level, Gold-Silver Ratio Remains Elevated

Silver also gained on the week, likely benefitting from the same geopolitical uncertainties that drove gold prices after President Trump’s inauguration. Silver peaked one day after the current president took office at $30.83/ozt before slipping nearly $0.30 on Thursday. The spot price of silver generally recovered today, jumping $0.20/ozt to end the week. Silver now sits within $0.30 of crossing the $31 line, which proved a tricky level to maintain throughout 2024. The precious metal is up nearly $2 since January 1st. 

President Trump’s policies could directly influence silver prices, Nasdaq says. The American businessman ran on an energy platform of “drill, baby, drill” in 2024, and an American recommitment to maximizing its output of the precious metal could have a profound impact on the silver market. Geopolitical uncertainty remains a major motivator for the price of silver, which is a popular safe haven asset. Should President Trump decide to roll back Biden-era environmentalist laws, demand for silver in the green energy sector could take a major structural hit. 

Silver demand across multiple sectors is expected to increase in 2025, which could help to offset increases in demand brought on by an increased American output of the metal. If the first week of President Trump’s second term is any indication, silver bulls may be in a good spot to start 2025. 

Today’s price action led to a marginal gain in the gold-silver ratio, which jumped .20 and made ground above the 90:1 line.