Gold bumped up 1% on Friday, heads for the best week in six as U.S. fiscal concerns mounted after Moody’s Ratings’ U.S. credit rating cut late last week.
The rate cut boosted haven demand for the yellow metal, particularly as the dollar weakened. Traders also sought a hedge against uncertainty as the President Donald Trump’s sweeping tax bill passed the House and headed for the Senate, potentially adding trillions to the national debt.
August gold futures fell 0.6% Thursday to settle at $3,323.60 an ounce on Comex, and the front-month contract – which rolled to August from June this week – rose 4.3% in the first four days of the week. U.S. financial markets will be closed Monday for the Memorial Day holiday. Electronic trading will settle on Tuesday. The August contract is currently up $48.90 (+1.47%) an ounce to $3372.50 and the DG spot price is $3344.90.
Bullion increased 5.4% in April after gaining 11% in March and adding 0.5% in February. It’s up 26% so far this year. The metal rose 27% in 2024, its biggest annual gain since 2010.
The U.S. dollar fell more than 1% so far this week on the credit downgrade, making dollar-denominated gold a more attractive investment to holders of other currencies.
Trump’s “big, beautiful bill” passed the House on Thursday after an all-night session with a vote of 215 to 214. It must pass the Senate before it can become law. Republicans control the body with a majority of 53 to 47, but some members of the GOP caucus have already said they oppose the measure.
Investors also continued to watch for signs on the Federal Reserve’s plans for monetary policy. Earlier this month, the central bank left interest rates unchanged again at 4.25% to 4.50%.
Most investors tracked by the CME FedWatch Tool now expect the Fed to begin interest rate cuts in September, not the next two scheduled policy meetings in June and July. Lower interest rates are typically bullish for gold, making the yellow metal a more attractive alternate investment.
The Fed held rates at policymakers’ meetings this year after reducing them three times in 2024. 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. Previously, the Fed had kept rates at 5.25% to 5.50% for a year.
Front-month silver futures lost 1.3% Thursday to settle at $33.22 an ounce on Comex, and the July contract increased 2.7% so far this week. Silver dropped 5.2% last month after advancing 9.9% in March and retreating 2.4% in February. It gained 21% in 2024. The July contract is currently up $0.096 (+0.29%) an ounce to $33.315 and the DG spot price is $33.12.
Spot palladium fell 1.7% Thursday to $1,025.00 an ounce and rallied 6.2% in the first four days of the week. Palladium fell 4.9% last month after rising 7.3% in March and retreating 10% in February. Palladium dropped 17% last year. The current DG spot price is down $27.40 an ounce to $999.00
Spot platinum rose 0.6% Thursday to $1,085.60 an ounce and gained 9.3% in the first four days of the week. Platinum retreated 3.1% in April after increasing 6.7% in March and sliding 4.7% in February. Platinum lost 8.4% in 2024. The DG spot price is currently down $4.70 an ounce to $1080.00.
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