The threat of tariffs by the Trump administration has generated volatility in the gold and silver markets. About a month ago, the possibility of tariffs being imposed on imports of these metals led banks and hedge funds to cover short positions, increasing speculation and volatility.
As Trump's January 20 inauguration approached, uncertainty over tariffs sparked a frantic global rush to move gold and silver bullion into the United States. This situation has caused disruptions in the precious metals markets, with gold and silver futures prices rising significantly above spot prices.
On January 20, the Trump administration announced that it would not impose broad tariffs immediately, which initially reduced futures premiums. However, premiums rose again when Trump suggested possible 25% tariffs on Mexico and Canada starting February 1.
Gold lease rates in London have also risen to levels not seen in decades, reflecting dealers' urgency to move gold to the United States. Robert Gottlieb, a former precious metals dealer, noted that there is a shortage of available gold and silver inventory.
In short, the uncertainty and volatility generated by the threat of tariffs have been favorable for gold and silver, fueling a scramble for physical bullion and positioning these metals for a potential bull market in 2025.
Jesse Colombo, Money Metals Exchange