Gold prices reach a new record level of $4068 per ounce

SadaNews - The price of silver has reached its highest level in decades, influenced by an unprecedented short squeeze in London that has supported the significant rise since the beginning of the year, while gold has reached a new peak supported by investor enthusiasm for precious metals.

Spot silver rose by about 3% to approach the $52 per ounce level, while gold recorded a new record level above $4068 per ounce, after gaining for the eighth consecutive week on Friday. Platinum and palladium also saw significant increases.

Record rise for precious metals supported by central banks

The four main precious metals have achieved increases ranging between 50% to 80% since the beginning of the year, in a rally that has dominated commodity markets.

Gold's advance is based on purchases by central banks, an increase in exchange-traded fund holdings, and interest rate cuts from the Federal Reserve. Additionally, ongoing trade tensions between the United States and China, threats to the independence of the Fed, as well as the U.S. government shutdown, have helped bolster demand for safe havens.

On Sunday, China urged Washington to cease its threats of imposing tariffs and to return to the negotiation table, warning that it would respond if the United States proceeded with new measures. For his part, U.S. President Donald Trump, who had threatened last week to impose an additional 100% tariff on Chinese goods, adopted a more conciliatory tone over the weekend.

Kyle Rodda, an analyst at Capital.com, said: "It seems that the moment geopolitical and trade risks start to lose their supportive winds for gold, we are witnessing a resurgence of tensions between the U.S. and China." He added, "Despite both sides being open to further negotiations, trade volatility may calm down, but it never truly disappears, which is very positive for gold."

Pressure on silver amidst liquidity shortages in London

Traders remain on alert ahead of the results of the U.S. administration's "Section 232" investigation into critical minerals, including silver, platinum, and palladium. Concerns have intensified that these may fall under the tariffs threatened by Trump, increasing market supply shortages and partially paving the way for the historic short squeeze on silver (price increases resulting from panic among short sellers), following a significant drop in the freely available supplies in London.

Anxiety regarding the lack of liquidity in London has pushed silver prices to a record level of $52.50 per ounce, previously recorded in 1980, on an expired contract on the Chicago Mercantile Exchange.

Reference prices in London have risen to almost unprecedented levels compared to New York, prompting some traders to book space on transatlantic air shipments to transport silver bars, a costly method typically used for gold only, to take advantage of the significant price differential in London.

Spot market prices

The spot gold price rose by about 1.3% to $4068.21 per ounce, trading at $4067.

The Bloomberg Dollar Spot Index remained largely unchanged after rising about 1% last week. Spot silver rose by 2.8%, surpassing the $51 per ounce level, while platinum prices reached about $1634 per ounce, and palladium prices rose by approximately 3.6%.