Gold regains some ground on this morning’s weak U.S. economic data after dropping overnight. The yellow metal had dipped below the $3300 mark as haven investors turn to other assets after U.S. President Donald Trump signed two executive orders tempering duties on foreign-made vehicles and some auto parts.
The Commerce Department’s report this morning shows the economy contracted in the First Quarter with the gross domestic product declining at a 0.3% rate, a rapid reversal from a 2.4% increase in the fourth quarter. Imports surged by 41% in the last quarter, subtracting from GDP, as companies sought to get ahead of Trump’s global trade fight. A separate jobs report from ADP also indicated a slowing economy, with April’s private payroll growth coming in at 62,000, well below the forecast of 120,000. After the data came out, the Dow Jones Industrial Average fell 615 points, or 1.5%. The S&P 500 was off 2%, while Nasdaq Composite shed 2.6%.
The monthly U.S. jobs report for April comes out Friday and will also be closely watched for signals on the Federal Reserve’s monetary policy.
June gold futures fell 0.4% Tuesday to settle at $3,333.60 an ounce on Comex, though the front-month contract rose 1.1% in the first two days of the week. Bullion has increased 5.8% so far this month 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 June contract is currently down $9.40 (-0.28%) an ounce to $3324.20 and the DG spot price is $3309.10.
GDP probably slowed as imports rose ahead of the imposition of Trump’s tariffs and weaker winter spending. Meanwhile, Friday’s April U.S. jobs report is likely to indicate how widespread the impact of government cuts over the past three months have been on the labor force. A separate government report Tuesday showed that the number of U.S. job openings dropped last month to the lowest level since September. The Fed closely watches both inflation and the labor market when setting monetary policy.
The central bank has been widely expected to continue interest rate cuts this year. 64.9% of investors tracked by the CME FedWatch Tool expect the Fed to begin interest rate cuts in June but keep them unchanged at the central bank policymakers’ meeting next week. Lower interest rates are typically bullish for gold.
The Fed left rates unchanged at 4.25% to 4.50% at policymakers’ last meeting in March but reduced rates 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 rose 0.8% Tuesday to settle at $33.58 an ounce on Comex, and the July contract gained 0.8% in the first two days of the week. Silver is down 3% this month after advancing 9.9% in March and retreating 2.4% in February. It gained 21% in 2024. The July contract is currently down $0.732 (-2.18%) an ounce to $32.845 and the DG spot price is $32.52.
Spot palladium decreased 1% Tuesday to $945.50 an ounce and is unchanged so far this week. Palladium is down 5.1% this month after rising 7.3% in March and retreating 10% in February. Palladium dropped 17% last year. Currently, the DG spot price is down $7.20 an ounce to $940.50.
Spot platinum slipped 0.3% Tuesday to $988.80 an ounce but is up 1.3% so far this week. Platinum is down 1.7% this month 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 $19.20 an ounce to $971.30.
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