Gold and silver price volatility has continued this week following fresh trade war announcements and reversals from President Trump.
Markets were shocked on Friday by an announcement from the President that he was recommending a 50% tariff on EU goods to be introduced June 1st. Stock markets quickly fell, and gold jumped to $3,359 per ounce by the weekend close. In GPB gold hit £2,488 and in Euros gold traded at €2,965 over the weekend.
This was quickly reversed however, when the President confirmed that the deadline for the tariffs would be pushed back to July 9th to allow both parties time to reach a trade deal. Gold has once again pulled back to around the $3,300 per ounce range that is proving a key level of late.
Silver continues to trade between $32 and $33 in the past month, with some large swings up and down. With the gold-silver ratio around 100, silver continues to look undervalued compared to gold, and with little reason to expect gold to come down significantly, it is more likely that silver would rise towards the ratio average of 85 seen in recent years. That ratio would put silver at over $38 per ounce based on the current gold price.
Markets have increasingly been trading on relief in recent months, with severe tariffs catching headlines, only to be watered down, reversed or delayed, and causing a market bounce back. While President Trump uses large tariffs as threats to try and prompt negotiations, the overall situation continues to decline, with tariffs still higher than they were in previous months.
The shock announcement last week however, whether a negotiating tactic or not, still demonstrates the uncertainty facing markets. The halfway point of the 90-day delay to sweeping global tariffs has also been passed, and few deals have been announced. This leaves the global economy on shaky ground.
Analysts from Citi Bank and Bank of America, have stated gold may be entering a period of consolidation across the summer, but expect gold and silver to push higher towards the end of 2025. The current record of $3,500 is expected to be beaten, and the BoA’s analyst believes $4,000 could be achieved by the end of the year or early 2026.
Volatility is bringing some buying and selling opportunities for investors, but expanding timelines even to 3 months shows that the latest price swings are still minor compared to the gains seen so far this year.
