Silver Continues Historic Rally, Gold Sets New All-Time High

 

Silver Continues Historic Rally, Gold Sets New All-Time High

(Bullion News Network) – Precious metals began the trading week with a volatile day. On Monday, the spot price of silver crossed $115 per troy ounce by the mid-afternoon, smashing the metal’s previous intraday all-time high. Prices modulated later in the day, with silver prices closing at approximately $107.36/ozt. The spot price of gold followed a similar daily trend on Monday, peaking at over $5,100 per troy ounce before falling later in the day to close at approximately $5,057.48/ozt. The gold-silver ratio continued to slide, falling to 46.08:1 on the lopsided price action, which favored silver. Platinum saw the largest price swing from peak to trough, dropping more than $250 per troy ounce from an all-time high of over $2,900 in the morning to a closing price of approximately $2,665.20.

Risk-motivated safe haven buying remains a major demand driver for both gold and silver. Ongoing global uncertainty surrounding U.S. President Donald Trump’s tariffs and attempts to acquire Greenland drove precious metal prices higher throughout last week, a trend that continued on Monday. In the United States, tensions between ICE and protestors in Minnesota continued to escalate after another ICE-involved shooting made national news. Both domestically and internationally, tensions and uncertainty continue to rise, driving more investors toward safe haven assets like gold and silver.

For silver, industrial demand and speculation concerning global supply disruptions remained an outsized price driver. China instituted a new set of restrictions on silver exports beginning on Jan. 1, provoking fears that the vital precious metal may be more difficult to acquire. Last year, China kickstarted a major silver price run after announcing an ambitious plan to increase the country’s already-leading green energy sector. The move is expected to be a major driver of industrial demand for silver, which is a core component in the production of solar panels and solar energy cells.

The Federal Reserve is set to deliver its interest rate decision on Wednesday during a particularly important meeting. The FOMC is widely expected to leave rates unchanged at its January meeting. CME FedWatch projects only a 3.9% probability that the Fed will move to cut rates at the Wednesday meeting, a decrease from 4.4% last week and 17.7% one month ago. Earlier this month, the Department of Justice issued a subpoena to the Federal Reserve relating to accusations from the Trump administration that Fed Chair Jerome Powell had misled Congress about the rising costs of renovations to the Federal Reserve’s headquarters in Washington, D.C. In a statement following the news, Powell claimed that the investigation was part of the Trump administration’s effort to pressure the Federal Reserve into cutting interest rates, a subject about which Trump has repeatedly criticized the central bank leader.

Traders are likely to pay close attention to Powell’s post-meeting press conference, which will be streamed by the Federal Reserve thirty minutes after the FOMC’s meeting decision is released. Powell is notoriously careful about mentioning politics during these press conferences, routinely declining to answer questions that ask him to comment on political matters. However, Powell could use the opportunity to respond further to the Department of Justice’s accusations against himself and the central bank. Powell’s tenure as Chair of the Federal Reserve will end in May; President Trump is expected to nominate his successor.

Next Friday (Feb. 6), traders will be able to review the January U.S. employment report, as well as unemployment and wage numbers from the month of January. This report should be especially impactful to markets, as a cooling labor market helped justify the FOMC’s three consecutive rate cuts that concluded 2025. So far, Fed officials seem content to leave rates unchanged until inflation approaches the central bank’s longstanding 2% target. More trouble in the labor market could drive the FOMC to act more quickly to cut rates, although comments from Fed leaders seem to suggest that the committee is also looking for evidence that inflation is firmly under control.

Today’s price action sets traders up for a busy week. Gold and silver peaked at fresh all-time highs before prices modulated later in the day, and both precious metals closed at or near new highs after slowing down Monday afternoon. Volatility could continue throughout this week, especially if Powell says anything interesting enough to provoke a reaction from institutional traders on Wall Street. For now, gold and silver will end the trading day in the U.S. at all-time highs.