Gold climbs to one-week peak early Monday on haven demand. Amid new uncertainty surrounding U.S. President Donald Trump’s trade and tariff policies the dollar weakened and the yellow metal jumped 2%.
China and the U.S. accused each other of violating the trade deal they reached last month, and U.S. judicial actions on the validity of Trump’s trade proposals attracted investors seeking havens against the uncertainty. On Friday, President Trump said he plans to double duties on imported steel and aluminum to 50%. Investors are also closely watching a tax bill which some economists have forecast could push the U.S. into a recession.
August gold futures fell 2.3% last week to settle at $3,315.40 an ounce on Comex after the front-month contract lost 0.9% Friday. Bullion slipped 0.1% last month after increasing 5.4% in April and gaining 11% in March. It’s up 26% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The August contract is currently up $64.40 (+1.94%) an ounce to $3379.80 and the DG spot price is $3359.20.
Trump said Friday that China had “totally violated” the tariff pause agreed to by the two countries in mid-May and doubled steel tariffs later that day. But Trump and Chinese President Xi Jinping are likely to discuss trade negotiations this week, National Economic Council Director Kevin Hassett said Sunday on ABC’s This Week.
Separately, a federal appeals court on Thursday paused a ruling from the Court of International Trade that blocked Trump’s tariffs the day before. Meanwhile, Trump’s tax bill faces debate in the U.S. Senate after passing the House and could face pushback from fiscal hawks concerned about what it might add to the deficit and the impact on the economy.
Friday, a key inflation measure showed that inflation was at the lowest annual rate of the year in April and in line with forecasts. The personal consumption expenditures price index, The Federal Reserve’s favorite inflation index, came in in line with expectations on a monthly basis while the annual figure was lower. Trump’s tariffs policy began implementing in the first half of the month and likely wasn’t reflected in the data.
The Fed closely watches inflation and the labor market in determining monetary policy. The key U.S. monthly jobs report for May is scheduled for release on Friday.
Last 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 retreated 1.7% last week to settle at $33.03 an ounce on Comex after the July contract dropped 1.2% Friday. Silver added 0.6% in May after dropping 5.2% in April and advancing 9.9% in March. It gained 21% in 2024. The July contract is currently up $1.021 (+3.09%) an ounce to $34.040 and the DG spot price is $34.05.
Spot palladium declined 3.6% last week to $974.50 an ounce and slid 0.4% Friday. Palladium rose 2.8% last month after falling 4.9% in April and rising 7.3% in March. Palladium dropped 17% last year.
Spot platinum dropped 3.8% last week to $1,059.70 an ounce after decreasing 1.9% Friday. It surged 8.6% in May after retreating 3.1% in April and increasing 6.7% in March. Platinum lost 8.4% in 2024.
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