Gold stocks in COMEX-approved warehouses have jumped by a third in the past six weeks. Gold lease rates in London have surged to 3.25% per annum, reflecting a significant tightening of short-term liquidity as physical gold moves to Comex-approved US warehouses ahead of President Trump’s proposed 10% trade tariffs on imports. According to Industry experts rising lease rates indicate tight supply and highlight strong hedging activity, further boosting demand and upward price momentum.
According to some news reports moving physical gold from London to New York before the new administration starts will reduce the available supply in London, leading to higher lease rates. At the same time, traders who have bet against gold prices in Comex futures may rush to close their positions to avoid delivering physical gold when their contracts expire. This could push futures prices even higher. Silver and platinum inventories in CME-approved warehouses saw a significant increase, while palladium stocks remained unchanged.
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Lease rates indicate the return that bullion holders in London’s vaults earn by lending their metal to other buyers for short periods. Typically, these returns hover near zero, but last week they have surged to record levels, with one-month lease rates exceeding 3.5% annually—the highest since at least 2002.
According to Bloomberg News agency Similar trends have been observed in the silver market, raising concerns among analysts and traders about a potential shortage of freely available metal to meet demand. Bullion-dealing banks such as JPMorgan and HSBC play a crucial role in maintaining price stability between London and New York. Along with high-frequency trading firms and hedge funds, they often engage in arbitrage—selling New York’s Comex futures and buying London metal when price gaps arise—to restore market balance.
U.S. President Donald Trump announced on Wednesday that he would impose additional tariffs on Russia if it fails to negotiate an end to its ongoing war in Ukraine. Trump also hinted that these tariffs could extend to “other participating countries.” In a post on Truth Social, he revised his earlier remarks made on Tuesday, in which he stated that sanctions against Russia were likely if President Vladimir Putin refused to engage in peace talks to resolve the nearly three-year conflict.
On Wednesday, gold and silver prices ended on a mixed note in the international markets. Gold February futures closed at $2,770.90 per troy ounce, marking a 0.42% increase, while silver March futures settled at $31.42 per troy ounce, reflecting a 0.24% decline. Domestic markets followed a similar trend, with gold February futures rising by 0.43% to settle at Rs79,564 per 10 grams, whereas silver March futures dropped by 0.16%, closing at Rs91,944 per kilogram.
Market Uncertainty and Global Reactions
Gold and silver experienced significant volatility amid growing concerns over U.S. President Donald Trump’s tariff plans. Investor sentiment was rattled as Trump reaffirmed his intent to impose a 10% tariff on Chinese imports starting February 1. Asian equity markets witnessed a downturn in response to the announcement, while U.K. and European markets reached record highs as they were excluded from the tariff list. Gold benefited from increased safe-haven demand, pushing prices closer to record highs, while silver faced resistance due to weakness in industrial metals.
Technical Analysis and Market Outlook
Gold and silver continue to hold key support levels of $2,634 and $29.50 per troy ounce, respectively, on a weekly closing basis in international markets. Manoj Kumar Jain, Director at Prithvi Finmart, anticipates further volatility this week, influenced by fluctuations in the dollar index, Trump’s tariff policies, and the upcoming Bank of Japan policy meetings. Keep eye on Unemployment data today at 7PM in US.
For today’s session, Jain forecasts gold support levels at $2,755-$2,744, with resistance at $2,784-$2,796 per troy ounce. Silver is expected to find support at $31.15-$30.88 and resistance at $31.66-$31.88 per troy ounce.
Domestic Market Strategy
Jain said on the Multi Commodity Exchange (MCX), gold is expected to find support at Rs79,300-Rs79,080 and resistance at Rs79,800-Rs80,000. Silver, on the other hand, has support at Rs91,220-Rs90,700 and resistance at Rs92,600-Rs93,300. Jain suggests buying gold on dips around Rs79,250 with a stop loss of Rs79,000, targeting Rs79,800.
As uncertainty persists in the global financial markets, investors are advised to stay vigilant and closely monitor key developments that could impact precious metal prices.
Kedia Commodity Gold and Silver Range
Gold trading range for the day is 79150-79840.
Silver trading range for the day is 90680-93180.
Big Events of The Week
Thursday, January 23, 2025
07:00 PM (United States): Initial Jobless Claims for the week ending January 18.
Friday, January 24, 2025
03:00 AM (United States): Fed Balance Sheet data (as of January 22).
08:15 PM (United States): S&P Global Composite PMI Flash (January).
08:30 PM (United States): Existing Home Sales (December).
08:30 PM (United States): Michigan Consumer Expectations Final (January).
Friday, January 24, 2025
05:00 AM (Japan): Inflation Rate (YoY for December).
08:30 AM (Japan): BoJ Interest Rate Decision and Quarterly Outlook Report.
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Disclaimer:
The information provided in this article is for informational purposes only and reflects the views of industry experts. Before making any investment decisions, it is recommended that you consult a financial advisor. The team at Gold Price Today does not engage in personal buying, selling, or trading of gold or silver on exchanges. We are not responsible for any gains or losses incurred based on the information presented here
