Gold tips up early Wednesday as investors took advantage of the previous session’s dip and did some bargain hunting. The market now looks to this afternoon’s release of the minutes from the Fed’s recent meeting as prices remained under pressure as U.S-EU trade tensions eased.
Investors were awaiting the Federal Reserve’s favorite inflation measure, the personal consumption expenditures price index this week for signals on the state of the economy and the central bank’s next moves on monetary policy. Consumer confidence rebounded in May after dropping for five consecutive months, according to data released Tuesday. The move was attributed to easing of the trade war between the U.S. and China.
August gold futures fell 2% Tuesday to settle at $3,328.30 an ounce on Comex. The front-month contract – which rolled to August from June – rose 6.5% last week. U.S. financial markets were closed Monday for the Memorial Day holiday. Electronic trading settled on Tuesday. Bullion is up 0.3% so far this month after increasing 5.4% in April and gaining 11% in March. It’s up 26% so far this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The August contract is currently up $6.20 (+0.19%) an ounce to $3334.50 and the DG spot price is $3303.00.
The Dow Jones Industrial Average surged by more than 700 points Tuesday after U.S. President Donald Trump backed off on his threat to impose 50% tariffs on goods imported from the EU, delaying the move until July 9. The rally in the broader market made gold a less attractive alternate investment.
Consumer confidence came in stronger than expected, rising 12.3 points from April to 98.0, well exceeding economists’ estimates for 86.0, according to the Conference Board. The move was likely attributable to the U.S. walking back tariffs on China.
Investors also continued to watch for signs of the Fed’s plans for monetary policy, with attention turning to the PCE index release on Friday. 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 0.9% Tuesday to settle at $33.31 an ounce on Comex. The July contract increased 3.9% last week and is up 1.5% so far this month. Silver dropped 5.2% in April month after advancing 9.9% in March. It gained 21% in 2024. The July contract is currently up $0.029 (+0.09%) an ounce to $33.340 and the DG spot price is $33.20.
Spot palladium fell 2.4% Tuesday to $986.00 an ounce. It rallied 4.7% last week and is up 4% this month. Palladium fell 4.9% in April after rising 7.3% in March. Palladium dropped 17% last year. Currently, the DG spot price is down $15.50 an ounce to $972.50.
Spot platinum dropped 1.3% Tuesday to $1,087.00 an ounce. It gained 11% last week and is up 11% this month. Platinum retreated 3.1% in April after increasing 6.7% in March. Platinum lost 8.4% in 2024. The DG spot price is currently up $2.90 an ounce to $1088.20.
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