Gold slips early Monday after the U.S. and European Union reached an agreement on tariffs, cutting through their previous stalemate.
U.S. levies on European goods had been scheduled to go into effect in August without a deal. Separately, investors awaited further direction from the Federal Reserve’s policy statement on Wednesday as well as a new round of upcoming economic data.
Front-month gold futures rose 1% last week to settle at $3,392.50 an ounce on Comex, as the most-active contract rolled to December from August. The December contract fell 1.1% Friday. Bullion is up 2.6% 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 $10.7 (-0.32%) an ounce to $3381.80 and the DG spot price is $3315.40.
U.S. President Donald Trump and European Commission President Ursula von der Leyen announced the trade deal Sunday. Trump said it imposes a 15% tariff on most EU goods entering the U.S., including cars. Trump had previously threatened a 30% tariff and the EU had been pushing for 10%.
The U.S. and China were also set to begin new talks on tariff truce extensions Monday in Stockholm. The two countries have the world’s largest economies and are key trading partners.
Investors are increasingly turning their focus back to speculation about the economy and monetary policy. Trump has repeatedly criticized Fed Chairman Jerome Powell and central bank policymakers for keeping interest rates unchanged this year, but they have said they’re in a holding pattern to determine whether Trump’s tariffs and trade policy will boost inflation. The Fed initially raised rates during the pandemic to protect against inflation.
The Fed’s favorite inflation measure, the personal consumption expenditures price index, is due out July 31, the day after the Fed issues its policy statement, with June data. The key U.S. monthly jobs report for July is due out Friday with the latest information on the state of the labor market.
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.
Front-month silver futures lost 0.3% last week to settle at $38.37 an ounce on Comex after the most-active September contract fell 2.2% Friday. Silver is up 6.1% this month after increasing 9.5% in June and adding 0.6% in May. It rose 21% in 2024. Currently, the September contract is flat at $38.365 an ounce and the DG spot price is $38.09.
Spot palladium decreased 3.1% last week to $1,226.50 an ounce after losing 1.4% Friday. Palladium is up 11% so far this month after surging 14% last month and advancing 2.8% in May. Palladium dropped 17% last year. The DG spot price is currently up $22.30 an ounce to $1245.00.
Spot platinum retreated 2.9% last week to $1,403.50 an ounce after sliding 0.6% Friday. It has gained 4.3% so far this month after climbing 27% last month and rising 8.6% in May. Platinum lost 8.4% in 2024. The current DG spot price is up $7.80 an ounce to $1400.60.
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