Gold and Silver Slide to End Trading Week

 

Gold and Silver Slide After Record Weekly Performance

(Bullion News Network) – Gold tacked on another record high earlier this week, peaking at an intraday high of over $2,930/ozt on Thursday. Prices retreated this morning to end the week, dropping nearly $45 per troy ounce. Despite the pullback, gold remains up compared to last Friday’s closing price and only marginally down since Monday. Rumors of an ongoing physical gold shortage pose a strong case for gold bulls, and some analysts have revised their near-term price targets to $3,000/ozt. Geopolitical uncertainty continues to drive price action for the precious metal, which is generally considered a safe haven asset. In particular, President Trump’s tariff threats and a slew of conflicts across the globe remain powerful motivators for the safe haven buying that has driven gold prices throughout Q1 2025. 

Silver prices were far more volatile today, with what appeared to be a mirage appearing and quickly dissipating in the early trading hours. Silver jumped to a peak of $33.33 per troy ounce before American markets opened and remained above $33/ozt until a sharp drop beginning at around 9:00 AM CST. What initially appeared to be a gain of nearly $1 per ounce turned into a $0.14 loss as the spot price of silver stabilized at around $32.25 per troy ounce. This price still puts silver up $0.20/ozt from Monday’s closing price and nearly $0.40 since last Friday, but it appears that the bull run fervor was short-lived for silver investors. 

This volatile price action translated into a rocky day for the gold-silver ratio. The GSR fell to as low as 87.83:1 this morning before steadily climbing throughout the day as silver’s gains eroded. The gold-silver ratio is slated to end the day just shy of 89.50:1, down about .86:1 from yesterday’s conversion rate. On a more macro level, the GSR has remained relatively static throughout the week, with today’s weekly low of 89.49:1 and Tuesday’s 91.05:1 peak separated by just over a point and a half. The lowest GSR since January 1st was 87.95:1 on January 15th, and Tuesday’s high has been the peak so far in 2025. 

Wall Street Doubles Down on Gold

Gold prices dipped today, but signs point to historic demand levels. Last week, multiple outlets reported that the Bank of England was experiencing longer-than-usual wait times for investors who wanted to withdraw their gold. Now, American banks are flying gold from London to New York City on commercial jets in an effort to fuel heightened demand amid Trump’s tariff threats and heightened tensions in both Gaza and Ukraine. JPMorgan, along with other major U.S. banks, reportedly began flying billions of dollars in gold from England to New York as markets reacted to President Trump’s various tariff threats.

Of particular concern to American and European investors is the U.S. leader’s threat to place heavy tariffs on the European Union. This move could cause a prolonged tariff and trade war between the United States and its allies, economists say. Additionally, some experts speculate that tariffs of the scale and magnitude suggested by President Trump could lead to higher prices for consumer goods. Given Wednesday’s hotter-than-expected inflation report, investors are concerned that the White House’s aggressive tariff policies might compound the USA’s existing consumer price problem.

Market demand reflects this reality, and leading U.S. banks are racing to fill orders for safe haven assets like gold and silver as quickly as possible. Several banks, including Citi, have revised their gold price projections to $3,000 or higher for 2025. Citi projects that President Trump’s tariff policies, along with the likelihood of retaliatory tariffs and trade wars, will remain powerful price motivators heading into the remainder of 2025. 

The Federal Reserve’s FOMC will release its January meeting minutes on Wednesday. The Committee opted to leave rates unchanged at its January 29th meeting, and Wednesday’s harsh inflation data appears to reaffirm the Fed’s revised projection of only two rate cuts for all of 2025. CME FedWatch’s implied probability of a 25 bps rate cut remains unchanged from Wednesday at only 2.5%, but traders should expect the market to react quickly to the tone and tenor of January’s meeting minutes when they go public next Wednesday. 

Gold and silver will finish the week in the green, despite today’s pullback.