Gold prices took a significant hit as silver prices also tumbled amidst the exemption of ‘bullion’ from the massive trade tariffs announced by US President Trump. This exemption led to a narrowing of the price gap between New York Comex futures and London bullion, prompting a drop in gold prices after reaching a new record high.

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Despite an initial spike to $3167 per Troy ounce, gold saw a 3.1% decrease in London settlement prices, erasing gains made earlier in the week. Silver prices followed suit, dropping by 6.8% and falling below $32 per Troy ounce before a slight recovery.

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The US Dollar’s decline against other major currencies, including a 2.0% drop on the DXY index, added pressure on silver prices. With a substantial portion of silver demand coming from industrial applications, the metal faced downward pressure amid trade policy uncertainties.

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Swiss bullion refining and finance group MKS Pamp’s metals strategist highlighted the impact of trade policy uncertainty on assets sensitive to tariffs, anticipating a knee-jerk reaction in the market. The influx of gold and silver into New York warehouses in anticipation of tariffs also contributed to the market dynamics.

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Comex-approved warehouses now hold a significant amount of gold and silver, raising concerns about oversupply in the US market. The arbitrage between Comex gold contracts and London bullion quotes decreased substantially, indicating changing market dynamics post-tariff exemption.

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While the exemption of Mexico and Canada under the USMCA trade deal offered some relief, global stock markets experienced a decline following Trump’s tariff announcements. The exemption of ‘bullion’ from tariffs provided a respite for the precious metals market, with gold in Shanghai setting a fresh record high.

London gold and silver prices saw declines following the tariff announcement, with the Gold-Silver Ratio reaching a 2.5-year high. The exemption of bullion from tariffs helped maintain the incentive for new imports from London, despite the market fluctuations.

Expert commentary from Adrian Ash, director of research at BullionVault, highlighted the impact of these events on the precious metals market. With over 20 years of experience in analyzing precious metals and financial markets, Ash provided insights into the implications of the tariff exemptions on gold and silver prices.

Overall, the exemption of ‘bullion’ from tariffs led to a complex interplay of market dynamics, impacting gold and silver prices while offering some stability in the face of trade uncertainties. The future trajectory of precious metals prices remains uncertain, subject to ongoing geopolitical developments and market reactions.