Fresh tariff threats, shutdown fears, and policy chaos send precious metals to uncharted territory, and it looks like traders want more.
- Trump’s warning of 100% tariffs on Canadian goods, the risk of another government shutdown, and pressure on the Fed have reignited hard-asset hedging.
- Spot silver surged 4.5% to $107.75, briefly touching $108.60, while gold climbed 1.8% to $5,077.
- Stocktwits sentiment on GLD flipped to ‘extremely bullish’, while silver sentiment improved despite low chatter levels.
Gold and silver futures surged to fresh record highs, crossing the $5,000 and $100-per-ounce marks, respectively, as investors rushed into safe-haven assets amid escalating geopolitical tensions, policy volatility under U.S. President Donald Trump, and renewed fears of a government shutdown. Uncertainty surrounding trade policy, fiscal negotiations, and central bank independence has sharply increased demand for precious metals.
The latest catalyst came after Trump warned that the United States would impose a 100% tariff on Canadian goods if Canada proceeds with a trade deal with China. The threat has reignited concerns over a global trade war, providing further momentum to gold and silver prices. Precious metals have also benefited from Trump's public interest in acquiring Greenland and his increasing pressure on the Federal Reserve to cut interest rates this month.
In Asia trading hours, gold futures were above $5,076 while silver futures crossed $108. Spot gold rose 1.8% to $5,077.51 per ounce, while spot silver gained 4.5% to $107.75 per ounce, after briefly touching a record high of $108.60 as of 9:35 p.m. Eastern Time.
Over the past year, gold has climbed by more than 84%, while silver has more than tripled. Exchange-traded funds tracking the metals also jumped, with SPDR Gold Shares rising nearly 2% and iShares Silver Trust advancing more than 5% in overnight trading, according to Yahoo Finance.
Trump's Tariff Threats Add Fuel
A few weeks ago, Canadian Prime Minister Mark Carney said Canada and China had reached an agreement to ease trade barriers and lower tariffs. According to CNBC, China reduced tariffs on select Canadian agricultural products, while Canada expanded import quotas for Chinese electric vehicles. Although Trump initially struck a positive tone, his stance shifted sharply over the weekend.
"China will eat Canada alive," Trump said on Saturday. In a Truth Social post, he warned that if Canada essentially became a conduit for Chinese goods entering the United States, it would face immediate retaliation. "If Canada makes a deal with China, it will immediately be hit with a 100% tariff against all Canadian goods and products coming into the U.S.A.," he wrote.
Shutdown Fears Return
Adding to market anxiety, concerns over another U.S. government shutdown have resurfaced. Prediction market Polymarket now puts the odds of a shutdown by January 31 at 77%. Senate Democrats have threatened to block a government funding bill if it includes funding for the Department of Homeland Security and Immigration and Customs Enforcement, citing anger over a recent shooting in Minneapolis that claimed the life of a 37-year-old American intensive care nurse.
With funding for large parts of the federal government set to expire at 12:01 a.m. on January 31, lawmakers risk running out of time, which could trigger a partial shutdown for the second time in less than three months.
How Are Stocktwits Users Reacting?
Retail sentiment on SPDR Gold Shares ETF (GLD) jumped to ‘extremely bullish’ from ‘neutral’ a week ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.
Sentiment on iShares Silver Trust (SLV) improved to ‘bullish’ from ‘neutral’ a day ago, with message volumes at ‘low’ levels.
A user on Stocktwits noted that gold could hit $6,000 and silver could break $200.
U.S. equities were trading marginally lower in overnight trading, with the SPDR S&P 500 ETF (SPY) down by 0.23%, while the Invesco QQQ Trust ETF (QQQ) fell 0.32% and the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 0.18%.
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