Category Archives: Precious Metals

China’s futures traders drove a remarkable $400 surge in gold prices this past spring, and now they are positioned to … Continue reading →

The U.S. has used tariffs since its founding in the 18th century.
They were primarily a way to raise revenue in the nation’s early days. Later, tariffs were largely used to restrict imports or as a bargaining chip to reduce trade barriers.
President Donald Trump’s use of the import duties has broken with historical norms, economists and historians said.

Shipping containers are seen at the Port of Montreal in Montreal, Canada, on Feb. 3, 2025. 
Andrej Ivanov | Afp | Getty Images

President Donald Trump imposed broad tariffs on China on Tuesday, while tariff threats hang over other major trading partners like Canada, the European Union and Mexico.
That may lead some to wonder: How have tariffs been wielded through U.S. history, and is Trump unique in his use of them?

The ‘three Rs’ of tariffs

The U.S. has used tariffs since its founding in the 18th century.
In fact, the Tariff Act of 1789 was among the first bills ever passed by Congress.
Since then, the U.S. has used tariffs to achieve three broad goals, said Douglas Irwin, an economics professor at Dartmouth College and past president of the Economic History Association.
Irwin calls them the “three Rs” — revenue, restriction (import barriers to protect domestic industry) and reciprocity (a bargaining chip to cut deals with other countries).

Using tariffs for revenue

Tariffs are taxes on U.S. imports, paid by the entity that’s importing the foreign good. Those taxes raise revenue to help fund the federal government.

For roughly the first third of the nation’s history — from its founding until the Civil War — the revenue motivation was “paramount” as a driver to impose import duties, Irwin said. The federal government relied on tariffs for about 90% or more of its revenue during that period, he said.

But things changed after the Civil War, Irwin said. The U.S. started to impose other taxes, like excise taxes, that made the nation less reliant on tariffs.
Tariffs generated about half of federal revenue from about 1860 to 1913, when the income tax was created, Irwin said.
The scale of the government expanded significantly in the 1930s — with the creation of New Deal programs like Social Security — and later for defense spending during WWII and the Cold War, said Kris James Mitchener, an economics professor at Santa Clara University who studies economic history and political economy.
Today, “tariffs simply cannot raise enough revenue to fund government expenditure,” Mitchener said. “There’s no possible way you could support the size of the U.S. military on tariff revenue.”

Restriction and reciprocity

From the Civil War to the Great Depression, the U.S. primarily used tariffs as a restrictive measure on imports, to insulate the domestic market from foreign competition, Irwin said.
For example, the Tariff Act of 1930, popularly known as the Smoot-Hawley Tariff, levied protective tariffs on roughly 800 to 900 different types of goods, accounting for about 25% of all goods imported to the U.S., Mitchener said.
Then, the post-Depression era — especially the post-World War II period — ushered in an era of “reciprocity,” Irwin said.
The U.S. helped create the General Agreement on Tariffs and Trade in 1948, the precursor to the World Trade Organization, which set global rules for trade and ushered in an era of low tariffs.
More from Personal Finance:What the ‘mother of all trade wars’ can teach us about U.S. tariffsCould Trump’s tariffs replace the income tax?Stockpiling ahead of higher tariffs is a big mistake
That said, the U.S. also used tariffs as a reciprocal bargaining chip before WWII.
For example, before the U.S. annexed Hawaii, it signed a free-trade agreement with the Kingdom of Hawaii in 1875. The treaty allowed for duty-free imports of Hawaiian sugar and other agricultural products into the U.S. In exchange, the U.S. got exclusive access to the harbor that would later be known as Pearl Harbor.

How the president’s tariff power grew

U.S. import taxes before the WWII era were pretty high, ranging from 20% to 50%, sometimes even reaching 60%, Irwin said. They have been “very low” since 1950 or so, he said.
The average duty on goods subject to a tariff was about 2% to 4% in the 2010s before Trump’s first term, Mitchener said.
“That’s what President Trump is trying to overturn, this sort of low period of tariffs we’ve had since World War II,” Irwin said.

Before 1934, it was Congress — not presidents — that had power over tariff rates and negotiations, said Andrew Wender Cohen, a history professor at Syracuse University.
But Democrats — then known as the political party of free trade — had an enormous majority around the New Deal era and passed the Reciprocal Trade Agreements Act of 1934, granting the president the right to negotiate tariffs in certain cases, Cohen said.
“That’s when the president gains a much more substantial authority,” Cohen said.
That power accelerated after 1948 during the “transformation of the whole global economic order,” he said.

Why Trump tariff policy is ‘very unusual,’ economists say

President Donald Trump in the Oval Office of the White House on Feb. 03, 2025. 
Anna Moneymaker | Getty Images News | Getty Images

That said, Trump’s use of tariff policy is “very unusual” among modern U.S. presidents, Cohen said.
For one, Trump “likes all three Rs” — revenue, restriction and reciprocity, Irwin said.
For example, on the campaign trail, he suggested that tariffs could replace the U.S. income tax to fund the government. He said during his campaign that they would create U.S. factory jobs and has threatened to use them to strongarm Denmark to give up Greenland.
However, there are tradeoffs, Irwin said. For example, restricting imports somewhat negates tariffs’ ability to raise revenue, because it diminishes the tax base for tariffs, he said. (Those additional duties may cause companies to import less or push people to buy less, for instance.)
“You can’t really achieve all three objectives at same time,” he said.
Additionally, no previous president has tried to link a U.S. drug crisis to trade policy, as Trump did with fentanyl.
“That’s a novel take,” Mitchener said.

Many presidents have used tariffs. For example, George W. Bush, Ronald Reagan and Richard Nixon applied tariffs to protect the U.S. steel industry, as Trump did in his first term, Irwin said.
“What’s unusual about Trump is, he’s not just picking out particular industries that he thinks are of strategic importance, but he’s blocking imports across the board almost with some of these countries,” Irwin said.  
Trump imposed a 10% additional tariff on all Chinese goods, for example, and threatened a 25% tariff on imports from Canada and Mexico.
“No president in recent memory has really used tariffs across the board or in a broad-brush way to achieve various objectives,” Irwin said. “They’ve sort of adhered to the rule that we belong to the WTO. That means we keep our tariffs low as long as other countries keep their tariffs low.”
Cohen agreed.

Global trade treaties, like the United States-Mexico-Canada Agreement (USMCA) Trump signed in his first term, establish a mechanism for nations to file grievances for alleged unfair trade practices, Cohen said. Nations can generally raise tariffs as a retaliatory measure if trade rules are breached, per the treaty terms, he said.
Trump’s recent unilateral tariff announcements are unique in this regard, he said.
“I can’t think of any precedent for that,” Cohen said.
“While the executive branch was given much more power since 1934, it’s always been subject to the specific terms of the agreements,” he said. Continue reading →

The silver market is forecast to record a fifth straight market deficit in 2025, with demand once again outstripping supply.

Analysts at the Silver Institute call the projected market deficit “sizeable.” 

The Silver Institute projects record silver offtake this year, with overall demand coming in at around 1.20 billion ounces.

Supply is expected to grow by 3 percent, but it won’t be nearly enough to feed growing demand. This will lead to a 149 million-ounce market deficit. While the gap between supply and demand will shrink by about 19 percent from last year’s level, it will remain “sizeable historically.” 

This supply shortfall will have to be filled by existing stocks of above-ground metal, potentially driving prices higher.

Silver Demand in 2025 

According to the Silver Institute, growing industrial and investment demand will be somewhat offset by sagging offtake in the jewelry and silverware sectors.

Industrial demand is expected to grow by another 3 percent coming off a record year in 2024. Continuing growth in the green energy sector – specifically solar energy applications – will continue to drive overall demand higher. 

Policies implemented by the Trump administration will likely put pressure on renewable energy initiatives in the U.S., however, analysts at the Silver Institute still expect global photovoltaics installations to reach another all-time high in 2025.

The rapid growth of artificial intelligence (AI) will also fuel demand for silver.

Silver is a key component in circuit boards, semiconductors, and connectors and is vital in reducing electrical resistance and enhancing processing speeds in AI applications. AI also requires massive data centers that rely on advanced cooling systems and efficient electrical transmission. Silver is used in heat-dissipation materials and high-speed connectivity components in these big data centers.

Silver is also an important input in the automotive industry. Even assuming slower growth in battery electrical vehicle production, silver demand is expected to remain robust in this sector due to greater vehicle sophistication, electrification of powertrains (albeit at a reduced pace), and ongoing investment in expanding related infrastructure. 

On the investment side of the coin, silver demand is expected to grow by around 3 percent due to increasing retail buying in the West. According to the Silver Institute, “As Western investors adjust to new price levels, fresh investment is expected to improve, and profit-taking will also ease.”

Analysts say there are several factors underpinning investment demand.

“Uncertainty over U.S. trade and foreign policy, record-high U.S. equities, and worries about U.S. public debt levels should all reinforce interest in portfolio diversification, which in turn will benefit silver and gold investment. Moreover, even if the pace of U.S. policy rate cuts slows in 2025, the consensus is still that they are coming. Coupled with sticky inflation, this points to potential declines in real rates ahead.”

Silver Institute analysts say that any kind of crisis could drive investment demand even higher.

Given the Federal Reserve is walking a monetary policy tightrope, and the economy has been distorted by decades of easy money policies, the likelihood of some kind of economic upheaval is elevated.

This is exacerbated by the fact that the central bank is caught in a Catch-22.

On the one hand, the Fed needs to keep rates elevated to address price inflation. 

On the other hand, the debt-riddled bubble economy can’t function in a higher interest rate environment.

Clearly, the Fed can’t do both, meaning rising price inflation or an economic meltdown are in the cards. In the worst-case scenario, we could see a combination of both – stagflation.

The demand for jewelry and silverware is expected to soften in 2025, with jewelry fabrication declining by about 6 percent.

According to the Silver Institute, India will account for the bulk of the decline due to higher local prices. Chinese demand is also expected to drop due to “cautious spending by consumers on non-essential items.”

Silver Supply in 2025

On the supply side, silver mine production is expected to grow by 2 percent to a seven-year high of 844 million ounces, with increased output anticipated from both existing and new operations in several markets. But even with the surge in mine output, the silver mining sector faces structural challenges. 

Silver mine output peaked in 2016 at 900 million ounces. Up until last year, silver production had dropped by an average of 1.4 percent each year. In 2023, mines produced 814 million ounces of silver.

According to Metals Focus, a combination of reserve depletion, mine closures, and a 20 percent drop in ore grades drove sagging mine output. 

With prices rising, silver recycling is projected to increase by 5 percent, with volumes breaching 200 million ounces for the first time since 2012. According to the Silver Institute, “Industrial scrap will be the key growth driver, particularly changeouts in ethylene oxide catalysts. Jewelry and silverware recycling will also rise, reflecting India’s price-led gains.” 

Silver Isn’t Priced for These Dynamics 

While silver gained over 20 percent in 2024, many investors consider it a laggard because it remains far below its all-time high, even as gold continues to set new records. Given the supply and demand dynamics, there is the potential for silver to shine in 2025.

The gold-silver ratio is hovering at around 90-1, indicating that silver is on sale when priced in gold. Historically, when the ratio gets distorted to this degree, it tends to snap back to the mean with a vengeance as the silver price spikes to catch up.

And as already mentioned, there is the potential for economic chaos in the coming months.

Furthermore, as analyst Jesse Colombo explained, bearish investor sentiment on silver due to its perceived underperformance last year is bullish from a contrarian perspective. 

When you add it all up, there are plenty of reasons to be bullish on silver and it appears at least some in the mainstream are picking up on these dynamics. Continue reading →

Silver is on the brink of a historic breakout, trading at $32.69 with projections hitting $50 by mid-year. With rising … Continue reading →

Gold rose to an all-time high early Wednesday on concerns over the U.S. and China trade war. The two countries … Continue reading →

Amid a global scramble for physical gold and silver, both metals are breaking out, signaling the start of the next powerful phase in their bull markets.

Many investors dismissed gold and silver after President Donald Trump’s victory in the November election. However, his first two weeks in office have proven exceptionally strong for both metals. 

While sentiment toward precious metals had been at a low point in recent months, I’ve consistently argued that this pessimism was unwarranted—gold and silver were merely consolidating before resuming their bullish trajectory. 

Now, with mounting evidence of a global rush for physical gold and silver, both metals are breaking out, signaling that the next phase of their bull markets is underway.

The big story this week centered on speculation over whether President Trump will impose tariffs on imported goods—and whether gold and silver will be affected. 

The mere threat of tariffs has been roiling the precious metals market. Now, massive shipments of gold from London to New York in anticipation of potential tariffs threaten a bullion shortage in London, the world’s most important gold trading hub.

As this physical supply squeeze has become more known—contrasting sharply with the abundance of “paper” gold and silver—both metals have surged.

Let’s start with gold, which continues its strong rally. As I’ve emphasized, this breakout strongly suggests that gold’s 2024 bull market didn’t end with the early-November sell-off. 

Instead, it is gaining momentum, likely extending well into 2025. In my view, gold is now on track to target $3,000, with the potential to reach the low-$3,000s relatively quickly. 

The next key test for spot gold is a decisive close above the $2,780–$2,800 resistance zone that’s just overhead—an achievement that would confirm that the next phase of the bull market is officially underway. 

Silver is now rallying alongside gold. Recently, it broke out of the consolidation pattern it had been stuck in since October—a strong bullish signal. 

For further confirmation of this breakout, I’m watching for COMEX silver futures to close decisively above the key $32–$33 resistance zone, which would reinforce the bullish momentum.

Silver’s bullish move this week isn’t surprising. As I noted last week, silver sentiment had hit its lowest point in years, reflected in the elevated short interest in the popular iShares Silver ETF (SLV). 

According to contrarian logic, extreme pessimism often precedes a strong rally—making this breakout a textbook example of sentiment-driven reversals.

One particularly intriguing development amid the global scramble for physical gold and silver is the surge in trading activity in the Sprott Physical Silver Trust (PSLV). 

Unlike most silver-tracking ETFs, PSLV is fully backed by physical silver. Over the past week alone, it has traded an impressive 120.36 million shares—the highest volume since its inception in 2010. Meanwhile, non-physically backed ETFs like SLV have shown no unusual changes in trading activity. 

This divergence strongly reinforces the notion that demand is surging specifically for physical silver rather than “paper” silver, signaling that a silver squeeze may be underway.

My proprietary Synthetic Silver Price Index (SSPI)—an indicator I developed to validate silver’s price movements—is also trending upward, further reinforcing the positive developments occurring in silver. 

The SSPI averages the prices of copper and gold, with copper adjusted by a factor of 540 to prevent gold from disproportionately influencing the index. The SSPI closely mirrors silver’s price movement, even though silver itself is not an input. 

The SSPI is rapidly approaching the 2,600–2,640 resistance zone, which has served as a key ceiling for much of the past year. A decisive close above this zone would signal a strong bullish breakout, indicating that another bull run for silver has likely started.

Beyond investing in gold and silver themselves, I also track and invest in gold and silver mining stocks. While these stocks have faced prolonged struggles, I believe they’re on the verge of a significant bull market as the overall precious metals bull market gains momentum. 

A key indicator of this shift is the large-cap VanEck Gold Miners ETF (GDX), which recently broke out of a long-term triangle pattern that dates back to 2011—a highly bullish development. For confirmation of this breakout, I’m watching for GDX to close decisively above the critical $42–$46 resistance zone.

When it comes to silver miners, I’m closely watching the Global X Silver Miners ETF (SIL), which is currently in the process of breaking out of a long-term triangle pattern. For full bullish confirmation, I’m looking for a decisive close above the key $48–$52 resistance zone.

In summary, gold and silver are heating up again after a challenging few months. Gold has been the stronger of the two, as it sets new highs across nearly every major currency—a trend that appears far from over. 

While silver has lagged behind, I believe gold’s bullish momentum will help pull silver higher until Western investor sentiment improves significantly. 

When that shift occurs, demand for silver will surge, allowing it to outperform even gold. Additionally, as this precious metals bull market continues, gold and silver miners—long dormant—are poised for a powerful bull market. 2025 is shaping up to be a standout year for precious metals investors. Continue reading →

Gold has hit a record high of $2,836.98 as investors seek safety amid escalating U.S.-China tariffs. With inflation fears and … Continue reading →

The stock market was little changed on Tuesday after President Donald Trump’s tariffs on Chinese imports went into effect.The Dow Jones Industrial Average was down 40 points, or 0.1%. The S&P 500 was flat. The Nasdaq Composite was up 0.1%.The yield on the 2-year Treasury note was up to 4.27%. The 10-year yield was up to 4.58%. Continue reading →

President Trump’s announcement of tariffs on Canada, Mexico, and China caused market turmoil, highlighting the economic risks and potential inflationary pressures.
Markets initially overreacted, but news of a 30-day delay Continue reading →

Discover the best gold bars for investment! Learn which bars offer top liquidity, purity, and value, and how diversifying sizes … Continue reading →

Excerpt from this week’s: Technical Scoop: Tariff Losers, Inflation Expectation, Gold Win

Source: www.stockcharts.com

The month of January is over and the winners for the month were the gold indices. The Gold Bugs Index (HUI) was up 13.5%, and the TSX Gold Index (TGD) gained 16.1%. Gold was up 7.4% and, while not shown, silver gained 10.3%. The S&P 500 was up 2.7%, the DJI gained 4.7%, and the NASDAQ was up 1.6%. Golds remain our number one place to be in 2025, irrespective of ups and downs. Indeed, if the stock markets follow Friday’s down day again on Monday, we suspect gold may also follow. But remember that back in 2008 and again in 2020 gold was the first out of the chute. The gold stocks get hit harder than physical gold. And physical gold tends to outshine the stock markets. Gold, unlike stocks or bonds, has no liability.

Source: www.stockcharts.com

Gold is the safe haven in times of geopolitical troubles, inflation/deflation, and market turmoil. Gold has been around as a monetary metal for over 3,000 years and is viewed as a reliable store of wealth. Gold has no liability. Given recent market uncertainty and volatility, it may be no surprise that gold rose 2.0% this past week to record highs at $2,835. Because of the strong US$ Index, gold had no trouble making all-time highs in all currencies. Gold is also protection against currency depreciation.

There is no doubt that Trump is rattling the markets. And that is positive for gold. But what we are seeing is something we haven’t seen before. There is a rush on to acquire physical gold. “There is incredible demand for physical gold in New York markets,” according to Peter Spina of Goldseek (www.goldseek.com). It is noted that Trump’s tariff plans could send gold to $3,500. Shortages are developing for physical gold. JP Morgan, the world’s largest bullion dealer, is delivering some $4 billion of gold bullion for settlement of futures contracts. Despite this, gold did pull back on Friday after the announcement that tariffs would indeed take place: 25% on Canada and Mexico (with oil & gas exempt for the moment) and 10% on China. 100% tariffs are threatened on the BRICS who have been trying to develop an alternative to the U.S. dollar and an alternative to the global payments system known as SWIFT. In a word, this could soon get ugly.

Other metals were also up. Silver gained 3.5%, while platinum was up 7.4%. Of the near precious metals, palladium gained 6.2% but copper waffled down 0.9%. We’d prefer to see copper leading.

In all, some $8 billion worth of physical gold could be delivered by the various bullion banks to cover futures contracts. So far, it is the second largest daily delivery notice since 1994. Gold futures have surged over spot prices. Gold finished the week for futures at $2,835 while spot was $2,800. A large physical settlement is noteworthy, as the futures market usually only sees paper trades. Usually positions are rolled over or cashed out, not replaced with physical good. Despite the huge delivery, we don’t know whether this was for arbitrage purposes or for existing short positions. The big five bullion banks besides JP Morgan are Goldman Sachs, BNP Parisbas, Deutsche Bank, and Morgan Stanley.

Source: www.bloomberg.com, www.cmegroup.com

Regardless of short-term gyrations and pullbacks, gold is going higher. Unlike Bitcoin, you can actually touch it, hold it. Friday might be start of a pullback, or not. As long as we hold above $2,650/$2,700 we’re going higher. Holding $2,800 would be positive, but if not, down to $2,750 would still be okay. $2,900 is in sight where we might expect some resistance.

Source: www.stockcharts.com

For a change, silver enjoyed a good week, surpassing the gains seen for gold. Silver gained 3.5% and is now up 10.3% in January. We also surpassed $32, a point we previously noted that needed to be taken out if we are to go higher. Still ahead, however, is that we need to take out $33.75/$34 to tell us that we should see new highs above the October high of $35.07. If that happens and we clear $35, then our next targets could be $39/40. However, that leaves us a long way from the all-time highs near $50 seen in 1980 and 2011. As we have noted, the reality given inflation is we need to see silver at $175 or $65 to equal the 1980 and 2011 highs on an inflation-adjusted basis.

We did break our downtrend from the October high. A pullback could take us down to $31.50 and we’d still be okay. But if we were to fall back under $31 and particularly under $30 we’d be in much more trouble. It would be helpful if we can soon take out that high in December of $33.33. We remain positive and bullish on silver but can’t rule out pullbacks. The final key point is $30 as we do not want to see that level breached. RSI is at a relatively neutral 59 so it does have considerable room to move higher.

Source: www.stockcharts.com

It was another up week for the gold stocks as the TSX Gold Index (TGD) gained 3.8% and the Gold Bugs Index (HUI) jumped 2.2%. The two indices are the best performing, up 16.1% and 13.5% respectively for January. If there is a fly in the ointment, Friday’s tariffs that sparked a stock market sell-off also hit the gold stocks. The TGD fell 0.7% on Friday but held its gains for the week.

We’ve had a nice move up from that December low, but we can’t help but note that the RSI was overbought, over 70 (briefly). Overbought is a condition that can linger for some time. The TGD needs to break out over 400 to suggest to us that new highs above the October high of 417 could be seen. We believe we will eventually see new highs, but for the moment the upward thrust could be on hold. A breakdown under 380 would be negative and could send us to support near 365 and even as low as 350. The move down from the October high appears to have unfolded in an ABC corrective fashion. But we need that close over 400 to tell us that the low is in and we could expect new highs.

Read the FULL report here: Technical Scoop: Tariff Losers, Inflation Expectation, Gold Win

Disclaimer

David Chapman is not a registered advisory service and is not an exempt market dealer (EMD) nor a licensed financial advisor. He does not and cannot give individualised market advice. David Chapman has worked in the financial industry for over 40 years including large financial corporations, banks, and investment dealers.  The information in this newsletter is intended only for informational and educational purposes. It should not be construed as an offer, a solicitation of an offer or sale of any security.  Every effort is made to provide accurate and complete information. However, we cannot guarantee that there will be no errors. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the contents of this commentary and expressly disclaim liability for errors and omissions in the contents of this commentary.  David Chapman will always use his best efforts to ensure the accuracy and timeliness of all information. The reader assumes all risk when trading in securities and David Chapman advises consulting a licensed professional financial advisor or portfolio manager such as Enriched Investing Incorporated before proceeding with any trade or idea presented in this newsletter. David Chapman may own shares in companies mentioned in this newsletter. Before making an investment, prospective investors should review each security’s offering documents which summarize the objectives, fees, expenses and associated risks.  David Chapman shares his ideas and opinions for informational and educational purposes only and expects the reader to perform due diligence before considering a position in any security. That includes consulting with your own licensed professional financial advisor such as Enriched Investing Incorporated.   Performance is not guaranteed, values change frequently, and past performance may not be repeated. Continue reading →