Gold Rises, Silver Jumps 8%, Safe Havens Sought
Gold strengthened on Tuesday (January 27th) as geopolitical uncertainty again boosted safe haven flows, while silver surged 8% and hovered near an all-time high.
Spot gold rose 1.6% to $5,092.70/oz (07:10 GMT), after hitting a record $5,110.50 the previous day and breaking through $5,100 for the first time. Meanwhile, US gold futures for February delivery edged up 0.1% to $5,088.40/oz.
KCM Trade analyst Tim Waterer believes Trump's "disruptive market rhythm" policy style actually benefits precious metals as a defensive asset. The threat of higher tariffs on Canada and South Korea is considered sufficient to keep gold as a safe haven.
Trade tensions escalated after Trump announced he would raise tariffs on South Korean cars, lumber, and pharmaceutical imports to 25%, while criticizing Seoul for not yet ratifying a trade deal with the US. This followed the threat of tariffs on Canada, amid warming relations between Ottawa and China following Canadian Prime Minister Mark Carney's visit earlier this month.
OCBC believes the gold rally demonstrates an increasingly tangible "uncertainty premium" embedded in prices. The drivers are not simply economic cycles, but a mix of geopolitics, unpredictable policies, and declining confidence in the dollar. The risk of a US government shutdown and Trump's volatile policies have also put pressure on the greenback, making dollar-denominated gold cheaper for foreign buyers.
At the same time, the market awaits the Fed's meeting, which is expected to hold interest rates. However, the focus remains on the issue of central bank independence, which has become sensitive again due to political pressure from the Trump administration.
Among other metals, spot silver jumped 6.1% to $110.19/oz after hitting a record $117.69 on Monday, and has risen more than 50% so far this year. BMI (Fitch Solutions) assesses that silver now looks "expensive" compared to gold, with the gold-silver ratio at a 14-year low.
Because the recent rally was largely led by speculators, BMI expects prices to cool in the coming months as supply tightness eases and industrial demand begins to peak as the mainland Chinese economy slows.
Meanwhile, platinum fell 2.2% to $2,697.45/oz after hitting a record $2,918.80, while palladium rose 1.1% to $2,004.37.
Key point (5):
Gold held above $5,000 due to safe-haven flows.
The dollar weakened, making precious metals more attractive.
Trump's tariff threats on South Korea added to the risk premium.
The "debasement trade" is back: investors are moving from bonds/currencies to hard assets.
Silver is also gaining momentum, signaling a defensive but volatile market.
Source: Newsmaker.id
