New Delhi: Gold and silver prices scale fresh peaks on Monday. The reason behind the record rates as investors flocked to safe-haven assets on intensifying tensions, following US President Donald Trump’s warning of imposing extra tariffs on European countries over the control of Greenland.
Silver price went past the record Rs 3 lakh per kilogram on the Multi-Commodity Exchange today morning. The precious metal rates touched Rs 3,01,315 for a kilogram MCX.
Spot gold gained 1.6 per cent to $4,670.01 per ounce by 0110 GMT, after scaling a record peak of $4,689.39.
US gold futures for February delivery went up 1.8 per cent to $4,677. Spot silver surged 4.4 per cent to $93.85 per ounce, after hitting a record high of $94.08.
Why Silver prices jumped
Since April, silver has given returns of more than 200 percent to its investors. Surprisingly, in the month of January alone, prices have jumped by about 25 percent so far. As of now, silver has become the best performing asset in terms of investment, overtaking all other asset classes (such as property or shares).
Threat of trade war
The main reason for the surge in silver prices is US President Donald Trump and his ambitious plans. Now, Trump is trying hard to acquire Greenland. European countries are opposing his plan are have raised strong voices. Trump has made it clear that he will impose heavy tariffs (import duties) on eight European countries including France, Germany and Britain.
Trump administration has announced that from 1 February, a 10% duty will be imposed on the imports of European countries which oppose his Greenland plans. The tariffs will increase to 25% by June if the deal is not met. Whenever there is a situation of trade war (Trade War) between big economies, people consider it safe to withdraw money from the currency or stock market and invest it in gold and silver, and this is what is happening right now.
America and Europe face off over Greenland
The European Union (EU) is also contemplating on imposing tough actions on the United Staes. According to reports, French President Emmanuel Macron and other European leaders are preparing to retaliate. Europe can use its most powerful ‘weapon’ ‘Anti-Corrosion Instrument’ (ACI) against the US. This allows EU to impose a retaliatory tax of about 93 billion euros (108 billion dollars) on American goods.
The direct impact of this tension is visible on the global market. In Singapore, spot gold rose 1.6% to $4,668 per ounce and silver crossed $93. Metals like platinum and palladium have also returned their luster.
(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, gold, silver and crypto assets.)
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