Gold prices fell nearly 1% after Trump and Xi’s talks calmed trade tensions, while silver soared to a 13-year high above $35. Learn why gold and silver are moving and what’s next for precious metals.
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Gold and Silver Prices: What’s Happening?
Gold and silver prices moved in opposite directions on Thursday after news of a phone call between U.S. President Donald Trump and Chinese leader Xi Jinping. The call hinted at easing tensions between the two countries, which affected the prices of these precious metals. Let’s break it down in simple terms.
Why Did Gold Prices Fall?
Gold, which people often buy when they’re worried about the economy or global politics, dropped by about 1%. It went from $3,347.79 per ounce to a slightly lower price after the Trump-Xi call. Here’s why:
- Trump-Xi Talks: The two leaders discussed trade issues and reached a “positive conclusion,” according to Trump’s social media post. This news calmed fears of a bigger trade war between the U.S. and China.
- Less Need for Safety: When tensions ease, fewer people buy gold as a “safe-haven” asset. This caused the price to dip.
- Market Reaction: Daniel Ghali, a commodity expert at TD Securities, explained that the talks reduced the risk of a U.S.-China split, which had been pushing people to invest in gold.
Despite this drop, gold has still risen by 28% this year because of ongoing global uncertainties.
Why Is Silver Soaring?
While gold fell, silver jumped 1.4% to $35.45 per ounce, hitting its highest level since February 2012. Here’s what’s driving silver’s big moment:
- High Demand: Silver is used in industries like electronics and solar panels, and its price often moves more dramatically than gold.
- Gold-Silver Ratio: This ratio, which compares gold and silver prices, dropped from 105 in April to 94. A lower ratio means silver is gaining value compared to gold.
- Volatility: Tai Wong, a metals trader, said silver prices can swing wildly, so investors should expect big ups and downs.
What’s Next for Gold and Silver?
Several factors could influence gold and silver prices in the coming days:
Central Banks Love Gold
Central banks around the world plan to buy 1,000 metric tons of gold in 2025. This is the fourth year in a row of huge purchases. Why? They’re moving away from holding U.S. dollar assets and turning to gold for stability.
U.S. Economy and Jobs
Recent data showed more people applied for unemployment benefits for the second week in a row. Investors are now waiting for Friday’s nonfarm payrolls report, which shows how many jobs were added in the U.S. If the report shows a weaker job market, it could push gold prices higher. Why? A weaker economy often leads to lower interest rates, which is good for gold.
Federal Reserve and Interest Rates
President Trump has been pushing Federal Reserve Chair Jerome Powell to lower interest rates. Ricardo Evangelista, an analyst at ActivTrades, said a weaker job market could make the Fed more likely to cut rates. Since gold doesn’t pay interest, it does better when rates are low.
Why Should You Care?
Gold and silver are important for investors because they react to big global events, like trade talks or economic shifts. If you’re thinking about investing, keep an eye on:
- News about U.S.-China relations.
- The U.S. job market and Federal Reserve decisions.
- Silver’s wild price swings, which could offer opportunities but also risks.
