Gold gains on weaker dollar, rising from a one-month low early Monday as the dollar index weakened, though lessening haven demand kept a lid on prices.
Prices slid last week amid easing trade tensions between the U.S. and China and a deescalating situation in the conflict between Israel and Iran. U.S. equities also rose to a record Friday, reducing demand for other assets like precious metals.
Investors awaited direction from the progress of U.S. trade deals and the release of key U.S. monthly jobs data for June on Thursday for additional direction. Trading is likely to be light this week because of the U.S. Independence Day holiday. U.S. government offices and financial markets will be closed Friday.
August gold futures fell 2.9% last week to settle at $3,287.60 an ounce on Comex after the front-month contract dropped 1.8% Friday. Bullion is down 0.8% this month after slipping 0.1% in May and increasing 5.4% in April. It’s up 24% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The August contract is currently up $6.2 (+0.19%) an ounce to $3293.80 and the DG spot price is $3281.90.
The U.S. and China late last week resolved some issues around shipments of rare-earth metals, and Canada late Sunday scrapped its digital services tax targeting U.S. technology firms. Both moves are likely to facilitate trade deals.
The Federal Reserve’s favorite inflation measure, the personal consumption expenditures price index, came in higher than expected on Friday. Consumer spending data was also weaker than anticipated. Together, they may influence the Fed’s upcoming monetary policy decisions, particularly if Thursday’s monthly U.S. jobs report for June comes in weak. The Fed has said it watches inflation and the labor market when setting monetary policy.
Core PCE, excluding volatile food and energy prices, for May came in at 0.2% month-on-month and 2.7% year-on-year, compared with estimates of 0.1% and 2.6%. Headline PCE was 0.1% and 2.3%, respectively, in line with estimates.
The Fed kept interest rates unchanged at 4.25% to 4.50% this month, though policymakers signaled that the central bank is still factoring two interest rate cuts this year. Most investors tracked by the CME FedWatch Tool expect the Fed to begin interest rate cuts in September, not at policymakers’ next meeting in July.
The Fed reduced rates three times in 2024 but has held them steady 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.
Front-month silver futures edged up 3 cents last week to settle at $36.37 an ounce on Comex, though the most-active September contract slid 1.5% Friday. Silver is up 10% this month after adding 0.6% in May and dropping 5.2% in April. It gained 21% in 2024. The September contract is currently down $0.155 (-0.43%) an ounce to $36.215 and the DG spot price is $36.01.
Platinum and palladium surged last week amid stockpiling by the U.S. and China to protect against possible trade disruptions.
Spot palladium rose 8.7% last week to $1,150.50 an ounce after increasing 0.4% Friday. Palladium is up 18% this month after advancing 2.8% in May and falling 4.9% in April. Palladium dropped 17% last year. The DG spot price is currently down $31.80 an ounce to $1118.00.
Spot platinum advanced 5.7% last week to $1,347.40 an ounce, though it lost 5.7% Friday. It’s up 27% this month after surging 8.6% in May and retreating 3.1% in April. Platinum lost 8.4% in 2024. The current DG spot price is up $4.70 an ounce to $1352.60.
Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or a recommendation regarding any particular security, commodity, or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities, or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand, and accept this disclaimer.
