Gold Nears All-Time High As Trump Takes Office; Platinum Group Metals Face Uncertain Future

 

Gold Soars Near Fresh High After Trump Inauguration

(Bullion News Network) – Gold prices climbed this week on the heels of President Donald Trump’s inauguration, soaring closer to the metal’s previous all-time high of $2,790/ozt. The President began his term with a flurry of executive orders intended to roll back several Biden administration reforms and advance the Republican president’s own agenda. Gold is now trading above $2,759 per troy ounce, a two-month high. Policy risks surrounding some of President Trump’s proposals, including tariffs on both Canada and Mexico, continue to provide tailwinds to safe haven gold. Although the leader has not yet confirmed any concrete action concerning tariffs, markets should anticipate tariff talks playing a key role in safe haven asset price action moving forward. 

Markets are also looking forward to a set of fresh inflation readings and a decision from the FOMC when the committee meets next week. Rate cut speculation played a major role in the precious metals market last year; September’s ‘jumbo’ 50 bps rate cut drove gold to its highest price ever. CME FedWatch projects a 95.5% implied probability that the Federal Reserve will opt to keep the federal interest rate unchanged at 425-450 basis points. The Fed will deliver its interest rate decision next Wednesday, just one day after the first consumer confidence reading of 2025 becomes public. 

Both the result and the tone of this decision should impact short-term market demand for safe haven assets, including gold. Additionally, a slate of potentially contested confirmation votes to fill President Trump’s cabinets is primed to inject more uncertainty into markets at the end of January. For now, a combination of uncertainty trading and preparation for the FOMC’s first meeting of the new year has pushed gold to within striking distance of a fresh all-time high. 

Silver moved largely sideways today, gaining just a few cents but securing a one-month high. The day’s lopsided price action pushed the gold-silver ratio higher. The GSR is now up .62 on the week and sits at 89.24:1. a weekly high. 

Gold climbs to 11-week peak on Trump policy jitters, soft dollar https://t.co/MCQFmDamm9

— Reuters Energy and Commodities (@ReutersCommods) January 22, 2025

Palladium Market Faces Supply Surplus, Tariff Questions In 2025

Palladium logged one of its strongest performances in weeks today. The precious metal, which is primarily used in the automotive sector, gained $33.54 on the day and around $75 since Monday. The bullish action is a bit of welcome good news for palladium investors. Palladium prices were highly volatile throughout 2024, which saw the industry take a structural hit to demand as the electric vehicle sector continued to grow. The precious metal is also highly sensitive to developments in the Russia-Ukraine War, since Russia remains the world’s largest producer of palladium annually. 

Analysts say that 2025 might be an even weaker year for palladium bulls. Nasdaq writes that the palladium market will hit a surplus of nearly 1 million ounces within the next couple of years, while total demand across the automotive, jewelry, and industrial sectors is projected to remain largely static. In Russia and South Africa, the two largest palladium producers in the world, experts forecast a “return to historic output levels,” which could spell more trouble for the palladium market over the next two years. 

Tariffs could also influence the palladium market in 2025. President Trump suggested this week that his administration might use tariffs on Russian goods in order to secure a resolution in the Russia-Ukraine war. Whether these tariffs will directly impact palladium is not yet clear, although a substantive tariff on Russian palladium would almost certainly curb the global supply of the precious metal. On a brighter note, President Trump’s decision to revoke the Biden-era 50% electric vehicle target could have ramifications for the EV industry, which remains a core threat to palladium demand in the automotive sector. 

Gold, silver, platinum, and palladium will end Wednesday in the green as markets prepare for the Fed’s first meeting of the year – and another round of first-month policy moves from President Trump.