Record Gold at $4,689 and Silver at $94: Precious Metals Rally as Base Case Scenario Projects Deadline Postponement, Not Reversal

Monday’s financial markets experienced dramatic movements as precious metals achieved extraordinary price milestones while forecasters emphasized expectations for delayed rather than cancelled tariff implementation. Silver led the advance with a spectacular rally to $94.08 per ounce—establishing an all-time record—before settling at $93.15 with a robust 3.6% gain. Gold simultaneously touched unprecedented territory at $4,689 per ounce, ultimately closing at $4,671 with a 1.6% advance.
Leading economists’ base case scenarios anticipate February 1st deadline postponement as diplomatic discussions between the European Union and United States commence, providing temporary relief from immediate tariff implementation. However, these same analysts explicitly state they do not expect complete tariff policy reversal, suggesting eventual implementation remains probable despite timing flexibility. This distinction between “delayed” and “cancelled” carries profound implications for business planning and market positioning.
European equity markets demonstrated broad-based weakness, with France’s Cac leading losses at 1.8%, while Germany’s Dax and Italy’s FTSE MIB each retreated 1.3%. Britain’s FTSE 100 showed comparative stability with a 0.4% loss. The automotive sector faced disproportionate selling pressure, with Volkswagen, BMW, Mercedes-Benz, and Stellantis collectively experiencing losses approaching or exceeding 2%.
The forecast for deadline postponement without policy abandonment creates particularly challenging business environments, as companies must maintain contingency planning for eventual tariff implementation while lacking clarity about ultimate timing. Extended uncertainty periods potentially prove more economically disruptive than immediate tariff implementation with clear parameters, as businesses postpone investments and commitments pending policy resolution. The base case scenario of delayed-but-not-reversed tariffs maximizes uncertainty duration while providing minimal concrete planning information.
Economic forecasting models project tangible consequences for European growth, with baseline scenarios estimating 0.2 percentage point GDP reductions. The expectation for postponed implementation potentially spreads these impacts across longer timeframes rather than concentrating them in immediate February period. British economists warn of GDP contractions potentially reaching 0.75%, with extended uncertainty possibly proving more damaging than swift resolution regardless of outcome. Precious metal analysts emphasize that the base case scenario anticipating deadline postponement rather than policy reversal—extending uncertainty without eliminating tariff threats—creates particularly supportive conditions for gold and silver, as investors recognize that delay merely postpones rather than eliminates economic risks, sustaining elevated safe-haven demand.