Cassiar Gold Corp. (TSXV: GLDC, OTCQX: CGLCF)
Revitalizing the Cassiar Gold District in British Columbia, Canada
Gold and silver prices continued to gain momentum as concerns about trade wars and global growth fuelled safe-haven demand. At the same time, a large amount of gold flowed into the United States from the United Kingdom due to tariffs threats, which also fuelled the rise in prices. Data show that since the U.S. election, the New York Mercantile Exchange gold stocks have increased by 116%.
HSBC precious metals analyst James Steel said that the more tariffs countries impose on each other, the more it will disrupt world trade, the more favourable to gold.
Although gold has not yet been explicitly included in the list of tax increases, the spread between gold prices in New York and London widened sharply after Trump’s previous announcement of tariffs on steel and aluminium products. This was widely interpreted by market participants as an early reaction to the potential tariffs.
However, commodities analysts at research firm BCA Research said in a research note on Monday that there is a high probability that the US will not impose import tariffs on gold, silver, platinum and copper, as there is no strong economic or political incentive to impose import tariffs on these metals.
Instead, imposing import tariffs on gold would put US investors at a disadvantage and drive more gold to China. This is not what the U.S. government is trying to achieve.
Since the recent uptick in precious metals is due to expectations of import tariffs imposed by the U.S., investors should be cautious about surging gold, silver, copper and platinum prices in the near term.
According to analysts, silver prices broke above $34 per ounce on Friday and then sold off quickly after hitting a high of $34.24 per ounce to close below $33 per ounce, a clear sign that prices are topping out in the near term.
Analysts point out that the silver market is relatively illiquid, making it more susceptible to short-term price pullbacks than gold. Despite the bullish long-term upward trend for the precious metal, going short of silver in the short term might be a smart move.
