The yellow metal is trading more than 1% higher at the start of European trading today, Monday, October 13, the opening session of the week, hitting a new record high of $4,070 per ounce. This is supported by trade tensions with the return of tariffs and increased demand for safe havens, in addition to rising expectations of a US interest rate cut. The yellow metal is trading up approximately 1.29% at $4,070 per ounce, while silver is trading at $51.16 per ounce, up 1.77% after testing $51.71 this morning, surpassing its all-time high set in 1980.
Statements by US President Donald Trump at the end of trading last week supported the increased demand for safe havens after he announced that his country would impose new tariffs on Chinese imports of 100%, in addition to the tariffs currently paid by China, starting November 1, in response to China announcing new controls on its rare earth exports early last week. Fears of renewed trade tensions and a decline in risk appetite are rising.
In addition to geopolitical tensions, gold is receiving support from rising expectations that the US Federal Reserve will cut interest rates in October and December. Markets are pricing in 96% and 87% odds of a 25 basis point rate cut in October and December, respectively, at the start of the week today, Monday, according to the CME’s FedWatch tool.
Historic short selling in London is fueling silver’s gains, which are trading at all-time highs after surpassing the 1980 high, amid anticipation of the US administration’s Section 232 investigation into base metals, including silver, platinum, and palladium. Fears are rising that these metals will be subject to new tariffs, causing a decline in silver supply, increased demand, and a record high for London benchmark prices compared to New York. Traders have been forced to reserve space on transatlantic air freight shipments to transport silver bullion, a costly method previously used only for gold, to take advantage of the large price differential in London.
Platinum, in turn, is trading at $1,634, up 2.98%, while palladium is up about 2.34%, trading at $1,438.