Gold and silver continue record breaking rallies with silver soaring above $90 an ounce amid increased concern about Federal Reserve independence, the prospect of more interest rate cuts and geopolitical tensions.
Gold lost a little altitude after this morning’s release of the producer price index, which rose just 0.2% in November, missing the Dow Jones consensus for a 0.3% gain though one-tenth of a percentage point higher than October. Meanwhile, retail sales showed some energy, rising 0.6% for November, when economists had been looking for an increase of 0.4%.
This week’s criminal probe against Fed Chair Jerome Powell has reigniting concerns about the central bank’s independence amid a standoff with the Trump administration. Haven demand has also soared amid the U.S. capture of Venezuelan President Nicolas Maduro and renewed threats by U.S. President Donald Trump to take Greenland from Denmark.
The consumer price index held steady in December in data released Tuesday. Steady inflation potentially sets the stage for increased Fed interest rate cuts this year. Lower rates are typically bullish for precious metals, making them a more attractive alternate investment.
February gold futures slipped 0.3% Tuesday to settle at $4,599.10 an ounce on Comex, though the most-active contract increased 2.2% so far this week. Bullion rose 2% in December after gaining 6.5% in November and increasing 3.2% in October. It rallied 64% last year. The metal rose 27% in 2024. The February contract is currently up $25.40 (+0.55%) an ounce to $4624.40 and the DG spot price is $4601.80.
March silver futures climbed 1.5% Tuesday to settle at $86.34 an ounce on Comex, and the most-active contract surged 8.8% in the first two days of the week. The white metal has hit a series of record highs in recent weeks amid surging industrial demand. Silver soared 24% in December after increasing 19% in November and rising 3.3% in October. It climbed 141% last year after rising 21% in 2024. The March contract is currently up $4.852 (+5.62%) an ounce to $91.190 and the DG spot price is $90.82.
The core consumer price index for December, which excludes volatile food and energy prices, came in at 2.6% year-on-year in December, and 0.2% on a seasonally adjusted monthly basis. Both figures were 0.1 percentage point below expectations. Headline CPI, which includes food and energy prices, rose 2.7% for the year and 0.3% for the month, in line with expectations.
The Fed closely watches both the labor market and inflation when setting monetary policy. The monthly U.S. jobs report for December came in below expectations on Friday, capping one of the weakest years in job gains in decades.
The Fed reduced interest rates for a third consecutive time last month to 3.50% to 3.75%.
About 96% of investors are betting that the Fed will keep interest rates unchanged at the next policy meeting at the end of January, according to figures tracked by the CME FedWatch Tool. About 4% expect another 25 basis point cut. 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 in 2024.
The investigation into Powell, whom Trump called either “incompetent” or “crooked” on Tuesday is the latest attack from a president who has long called for much lower interest rates. Powell’s term ends later this year and Trump can appoint his replacement. The criminal probe is over the scope of renovations to the Fed’s Washington headquarters and Powell’s testimony about it before Congress last year.
Spot palladium slipped $1.00 Tuesday to $1,880.00 an ounce, though it’s up 3% this week. Palladium increased 11% last month after adding 0.5% in November and rising 14% in October. Palladium gained 74% last year after dropping 17% in 2024. The current DG spot price is down $21.40 an ounce to $1848.00.
Spot platinum increased 0.2% Tuesday to $2,362.40 an ounce and rallied 3.4% in the first two days of the week. It surged 22% in December after climbing 4.7% in November and rising 1% in October. Platinum increased 122% in 2025 after losing 8.4% in 2024. The DG spot price is currently up $28.50 an ounce to $2389.90.
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