Silver Extends Gains, Gold Opens Slightly Higher Before U.S.-China Trade Talks

 

Silver Extends Gains Ahead of Key U.S.-China Trade Negotiations 

(Bullion News Network) – Silver logged a gain for the third consecutive day on Monday, adding over $0.83/ozt to its spot price and setting a fresh 14-year high. The spot price of silver is now up by over $2/ozt compared to last Monday’s closing price, with the precious metal settling within $0.20 of another key barrier at $37 per troy ounce. Although industrial demand for the precious metal remains high, silver prices are likely being buoyed by geopolitical and economic uncertainty. Gold prices gained as well this morning, jumping by just over $16 per troy ounce to open the week. 

The price action today heavily favored silver, handing the gold-silver ratio its third consecutive loss with a closing value of just over 90.3:1. This is the lowest gold-silver ratio close since late March, when gold catapulted to a new all-time high amid market panic surrounding U.S. President Donald Trump’s historic slate of “Liberation Day” tariffs. Such a rapid decline in the gold-silver ratio may be giving the precious metal tailwinds as investors swap their gold for potentially undervalued silver. 

Platinum and palladium also saw some significant movement on Monday. Platinum secured its seventh consecutive gain, adding over $55 to its spot price and crossing $1,225/ozt to set a four-year high. The precious metal also widened the gap between itself and palladium, which extended its three-day winning streak to settle just above $1,100 per troy ounce. Analysts at Bank of America argue that demand from the jewelry industry may be behind platinum’s latest surge. High gold prices may be pushing jewelers to diversify, particularly in China, according to the Bank of America note published last Friday. China’s April platinum imports hit 11.5 metric tons, setting a yearly record.

Wall Street saw mixed movement to start the week. The Dow moved sideways as both the S&P 500 and Nasdaq gained. Traders are watching for more upbeat signals while the U.S. and China hold trade talks throughout the week. American traders are hoping that the trade talks may lead to easing tensions between the countries, which are the world’s two largest economies. May saw a large-scale recovery on Wall Street following a trade truce between China and the United States, although recent disputes have revived fears that the two nations may enter a costly trade war.

Later this week, markets will react to several notable economic data reports. The week of economic data begins on Wednesday with a fresh Consumer Price Index (CPI) reading. Forecasters project that the May CPI will remain unchanged from April at 0.2%, while the year over year reading will increase by 0.1% to 2.4%. The core CPI, one of the most reliable measures of consumer inflation, is expected to drop by 0.1%, up to 0.3% in May compared to April’s 0.2% reading. 

On Thursday, markets will see the May Producer Price Index (PPI), which is expected to increase 0.7%, up to 0.2% in May compared to -0.5% in April. Forecasters believe the core PPI will jump 0.4% from April’s -0.1% reading to 0.3% this month. Friday, analysts expect an optimistic preliminary consumer sentiment reading. The median forecast projects a preliminary reading of 54, up from 52.2 in April.

The week is off to a strong start, particularly for silver and platinum. With another Fed meeting scheduled for next week and a no-rate-cut decision likely, the tone and tenor of this week’s economic reports should prove impactful for safe haven demand, as well as the larger precious metals market.