Gold steady in Wednesday morning trading as the ceasefire between Israel and Iran seemed to hold, though concern about the economy kept prices elevated.
The truce seemed to continue after U.S. President Donald Trump lashed out at both sides for early violations. As all sides, including the U.S., seemed to claim victory in the conflict, leaked intelligence reports, rejected by Trump, seem to indicate the U.S. strikes over the weekend may have failed to destroy Iran’s nuclear program, only delaying it by a few months.
In economic news, U.S. consumer confidence unexpectedly fell in June, a possible indication that the Federal Reserve will come under increased pressure to cut interest rates. A rate cut is typically considered bullish for gold. But Fed Chairman Jerome Powell, in congressional testimony Tuesday, reiterated that policymakers don’t need to rush to make those cuts.
August gold futures fell 1.8% Tuesday to settle at $3,333.90 an ounce on Comex, and the front-month contract dropped 1.5% in the first two days of the week. Bullion is up 0.6% this month after slipping 0.1% in May and increasing 5.4% in April. It’s up 26% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The August contract is currently down $6.40 (-0.19%) an ounce to $3327.50 and the DG spot price is $3317.70.
The Conference Board’s consumer confidence gauge for June on Tuesday came in below all economists’ estimates in a Bloomberg survey, decreasing by 5.4 points to 93. Expectations for the next six months fell by the most in more than two years.
In upcoming economic news, the Fed’s favorite inflation measure, the personal consumption expenditures price index, is due out Friday with May data. Investors will also be watching the release of new home sales data on Wednesday and weekly initial jobless claims and May durable goods orders on Thursday. The second revision of first-quarter GDP data is also due out Thursday.
Fed Chairman Jerome Powell, in testimony Tuesday before a House committee, said July is still too soon for the central bank to consider lowering interest rates: “For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance.” His testimony continues Wednesday before a Senate panel.
Last week, the Fed kept interest rates unchanged at 4.25% to 4.50%. 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 fell 1.3% Tuesday to settle at $36.07 an ounce on Comex, and the most-active September contract declined 0.8% in the first two days of the week. Silver is up 9.2% 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 $0.022 (-0.06%) an ounce to $36.045 and the DG Spot price is $35.88.
Spot palladium lost 2.3% Tuesday to $1,066.00 an ounce, though it rose 0.8% in the first two days of the week. Palladium is up 9.4% this month after advancing 2.8% in May and falling 4.9% in April. Palladium dropped 17% last year. Currently, the DG spot price is down $1.60 an ounce to $1316.00.
Spot platinum rose 2.1% Tuesday to $1,321.30 an ounce and is up 3.7% so far this week. It’s up 25% this month after surging 8.6% in May and retreating 3.1% in April. Platinum lost 8.4% in 2024. The DG spot price is currently down $6.80 an ounce to $1061.50.
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