Gold Sets Fresh All-Time High After Inflation Reading; Rumors Swell of a Silver Short Squeeze

 

Gold Sets Fresh All-Time High Amid Inflation, Tariff Uncertainty

(Bullion News Network) – Gold secured yet another all-time high today, crossing the $3,080/ozt line for the first time ever as markets contend with a new slate of tariffs, declining consumer sentiment, and inflation fears. Earlier this week, President Trump announced a new 25% tariff will go into effect against vehicles and vehicle parts that are imported into the United States. The import tariffs are scheduled to take effect on April 3rd and will apply to all imported vehicles and parts – even parts that are used in American plants to create cars in the United States. Wall Street tumbled on the news, with the S&P 500 dropping 2% and the Dow closing 700 points lower as the new tariff plans reignited concerns about the future of the U.S. economy. 

Adding to the uncertainty was a worse-than-expected inflation reading courtesy of February’s Personal Consumption Expenditures (PCE) index. The core PCE, one of the most reliable measures of inflation, rose .4% in February, .1% higher than the median forecast. Consumer sentiment also declined, dipping .9 points after forecasters predicted no change at 57.9. These indicators seem to suggest a growing national concern that the White House’s tariffs will mean higher prices for American consumers. Gold gained nearly $30 per troy ounce on the news, crossing $3,080/ozt and coming within $12 of breaking the $3,100/ozt barrier. Concerns surrounding inflation continue to drive safe haven demand for the precious metal, which Bank of America now forecasts could reach $3,350 per troy ounce in 2026. BofA cites economic uncertainty relating to American trade policies as the prime reason behind gold’s latest run. 

It is unclear at this point how the Federal Reserve will interpret this inflation data at its next meeting in May. Last week, Federal Reserve Chair Jerome Powell said that an unexpected weakening in the labor market or a significant drop in inflation may prompt the FOMC to loosen its economic policy. CME FedWatch now projects a 16.2% probability that the Fed will opt to lower rates by 25 basis points at its May meeting, up from 11.6% yesterday and 14.3% one week ago. Mr. Powell emphasized at that press conference that measuring the precise impact of the White House’s tariffs on consumer prices is easier said than done, a perspective that insiders in the automotive industry seem to share. 

Adding nearly $40 to its previous all-time high from earlier this month, gold’s 2025 price run is slated to continue against a backdrop of increasing uncertainty and volatility on Wall Street. 

Rumors Swell of Silver Short Squeeze Next Week

Silver pulled back today, losing over $0.20/ozt after setting a multi-month high above $34.50 per troy ounce yesterday. The lopsided price action drove the gold-silver ratio to a local high above 90:1. Despite the pullback, some investors believe that the precious metal could be in for a run starting next Monday. Traders online are calling for a silver short squeeze, and the topic has gained traction on both X and Reddit. Advocates for the movement noted a sharp increase in the short volume of the Sprott Physical Silver Trust (PSLV), which some traders have called a concerted price suppression effort by wealthy institutional investors. 

If the silver short squeeze materializes, it won’t be the first time retail traders online have organized to squeeze silver shorts and drive the spot price of silver higher. In 2021, the same traders who organized the GameStop short squeeze set their sights on the precious metal, driving silver prices 11% higher in late-January. Although prices rose considerably in the 2021 silver short squeeze, the volume of participants was likely not high enough to trigger a true squeeze on short traders. Over time, silver prices reverted to the median. 

At this point, it is unclear how successful this attempted silver short squeeze may be. Several major online news sites in the precious metals market have picked up the story, but proponents say that largescale participation by silver stackers will be paramount to the success of this revived effort to drive the price of silver higher. Silver is currently trading at $34.23 per troy ounce, but investors may wake up to a volatile market on Monday.