Tariff Announcement Drives 1% Gold, 2% Silver Drop
1min read On Wednesday, the precious metals market witnessed notable intraday volatility. Spot gold prices fell by 1%, while spot silver prices dropped by 2%. This movement occurred against a backdrop of heightened market uncertainty and shifting investor sentiment, primarily driven by the announcement of new tariff measures by the U.S. President.
The tariff announcement included a 10% 'minimum benchmark tariff' on trading partners and higher tariffs on certain goods. Initially, this announcement caused a surge in risk asset prices as the benchmark tariff was perceived as 'better than expected.' However, as the specifics of the tariff plan were revealed, investor concerns about the actual impact outweighed expectations, leading to a sharp decline in risk assets. This shift in sentiment saw the safe-haven property of gold reemerge, with gold prices initially falling before rising, while silver prices experienced a more pronounced decline.
The intraday drop in spot gold and silver can be attributed to the initial market reaction to the tariff announcement. Investors moved away from safe-haven assets in favor of riskier investments. However, as the implications of the tariff measures became clearer, investors sought the safety of precious metals, leading to a rebound in gold prices. The 2% intraday drop in spot silver reflects the heightened volatility in the market and the increased risk aversion among investors.
The tariff announcement also had broader implications for the commodities market. New York copper futures experienced the largest decline among commodities, dropping by up to 4% at one point. This decline can be attributed to the increased uncertainty surrounding global trade and the potential impact on industrial demand for copper.
In summary, the intraday decline in spot gold and silver prices was driven by the initial market reaction to the tariff announcement. Investors moved away from safe-haven assets in favor of riskier investments. However, as the implications of the tariff measures became clearer, investors sought the safety of precious metals, leading to a rebound in gold prices. The 2% intraday drop in spot silver reflects the heightened volatility in the market and the increased risk aversion among investors. The broader commodities market also experienced significant volatility, with New York copper futures experiencing a sharp decline.
