Gold drops on GDP data this morning that shows the U.S. economy on solid ground as investors awaited further direction from the Federal Reserve’s scheduled policy statement in the afternoon.
The first reading of U.S. GDP data for the second quarter shows resilience. The U.S. economy rose at a much stronger-than-expected pace powered by a turnaround renewed consumer strength, per the Commerce Department report. The Gross domestic product jumped 3% for the April through June period, beating the forecasted 2.3%. This reverses the o.5% decline from the first quarter that came largely due to a huge drop in imports as well as weak consumer spending amid tariff concerns.
The Fed is almost unanimously expected to keep interest rates unchanged again at its policy meeting, but most investors still expect rate cuts to begin in September, at the next scheduled meeting. Policymakers have said they’re keeping an eye on U.S. President Donald Trump’s tariff and trade policies’ impact on the economy and inflation. Trump has repeatedly criticized Fed Chairman Jerome Powell and Fed policymakers for keeping interest rates unchanged this year.
December gold futures rose 0.4% Tuesday to settle at $3,381.20 an ounce on Comex, and the front-month contract fell 0.3% in the first two days of the week. Bullion is up 2.2% this month after slipping 0.2% in June and losing 0.1% in May. It’s up 28% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The December contract is currently down $25.7 (-0.76%) an ounce to $3355.50 and the DG spot price is $3303.60.
Almost all the investors tracked by the CME FedWatch Tool are betting on the Fed to keep rates unchanged at the meeting this week, while most expect rate cuts to begin at the following scheduled policy meeting in September.
The Fed kept interest rates unchanged at 4.25% to 4.50% in June, though policymakers signaled that the central bank is still factoring in two interest rate cuts this year. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts last year.
The Fed’s favorite inflation measure, the personal consumption expenditures price index, is due out Thursday with June data. Separately, the key U.S. monthly jobs report for July is due Friday with the latest information on the state of the labor market.
Separately, talks between the U.S. and China in Stockholm this week ended without a formal extension of their tariff truce because Trump has the final say on agreements, administration officials said: “We’re going to head back to Washington, D.C. We’re going to talk to the president about whether that’s something that he wants so do,” U.S. Trade Representative Jamieson Greer told reporters following the talks.
Front-month silver futures edged up 0.2% Tuesday to settle at $38.29 an ounce on Comex, though the most-active September contract fell 0.2% in the first two days of the week. Silver is up 5.9% this month after increasing 9.5% in June and adding 0.6% in May. It rose 21% in 2024. The September contract is currently down $0.521 (-1.36%) an ounce to $37.765 and the DG spot price is $37.77.
Spot palladium increased 0.4% Tuesday to $1,258.00 an ounce and is up 2.6% so far this week. Palladium is up 13% so far this month after surging 14% last month and advancing 2.8% in May. Palladium dropped 17% last year. Currently, the DG spot price is up $16.50 an ounce to $1258.50.
Spot platinum gained 0.7% Tuesday to $1,403.80 an ounce. It’s up just 30 cents this week. It has advanced 4.4% so far this month after climbing 27% last month and rising 8.6% in May. Platinum lost 8.4% in 2024. The DG spot price is currently down $7.60 an ounce to $1391.00.
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