Gold fell early Friday heading for its first weekly loss in three weeks as haven demand eases.
U.S. President Donald Trump indicated that U.S. involvement in Israel’s attacks on Iran isn’t immediately imminent, if it happens at all. He said Thursday that he could take up to two weeks to decide whether to join the conflict, which has been going on for almost a week. Israeli forces have taken out one of Iran’s two biggest uranium enrichment centers, much of its missile fleet, and many of its senior officers and nuclear scientists, according to the New York Times.
Separately, the Federal Reserve left interest rates unchanged again at 4.25% to 4.50% on Wednesday, in line with expectations. But policymakers signaled that the central bank is still factoring two interest rate cuts this year, which would be bullish for gold, which becomes a more attractive alternate investment when rates drop.
August gold futures edged up $1.20 Wednesday to settle at $3,408.10 an ounce on Comex, though the front-month contract dropped 1.3% in the first three days of the week. The August contract is currently down $32.3 (-0.95%) an ounce to $3375.80 and the DG spot price is $3364.90.
U.S. financial markets and government offices were closed Thursday for the Juneteenth holiday. Electronic trading will post for Friday’s settlement. Bullion slipped 0.1% last month after increasing 5.4% in April and gaining 11% in March. It’s up 29% this year. The metal rose 27% in 2024, its biggest annual gain since 2010.
In a statement read by Trump’s press secretary, the president said he now believes there is a “substantial chance of negotiations” with Iran. Meanwhile, Iran’s Deputy Foreign Minister Saeed Khatibzadeh told the BBC that the U.S. joining Israeli strikes would cause “hell for the whole region” and create a “quagmire.”
Separately, after the Fed kept interest rates unchanged earlier in the week, Trump criticized Fed Chair Jerome Powell for the interest rate decision, calling him a “real dummy” in a social media post. Trump also floated the idea of appointing himself to the Fed. Powell’s term as chair ends next year.
In remarks after the rate decision, Powell said Fed policymakers, “for the time being,” are “well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policies.”
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. Lower interest rates are typically bullish for gold, making the yellow metal a more attractive alternate investment. 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.
July silver futures fell 0.6% Wednesday to settle at $36.91 an ounce on Comex, and the contract rose 1.5% in the first three days of the week. September silver, which is becoming the front month, settled at $37.25 on Wednesday. Silver added 0.6% in May after dropping 5.2% in April and advancing 9.9% in March. It gained 21% in 2024. The July contract is currently down $0.923 (-2.50%) an ounce to $35.990 and the DG spot price is $36.06.
Spot palladium gained $1.00 Wednesday to $1,058.50 an ounce and is up 1.6% for the week. Palladium advanced 2.8% last month after falling 4.9% in April and rising 7.3% in March. Palladium dropped 17% last year. Currently, the DG spot price is down $9.30 an ounce to $1052.50.
Spot platinum rose 4.2% Wednesday to $1,327.10 an ounce and is up 7.7% so far this week. It surged 8.6% in May after retreating 3.1% in April and increasing 6.7% in March. Platinum lost 8.4% in 2024. The DG spot price is currently down $57.80 an ounce to $1264.60.
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