Gold edges down as dollar boosts 

Gold edges down as dollar boosts 

Gold edges down within a tight range early Monday as the U.S. dollar boosts. The markets await Tuesday’s release of key inflation data for further direction.

The U.S. consumer price index report for January, scheduled for release Tuesday, is expected to provide the latest signals on the timetable of the Federal Reserve’s widely anticipated interest rate cuts. Fed officials indicated last week that they may not start for months, however. 

CPI revisions for last year, which came out Friday, confirmed the U.S. made progress in fighting inflation in 2023 – the stated goal of the Fed’s series of interest rate hikes. The Fed has raised interest rates by 5.25 percentage points since March 2022. 

Front-month gold futures slipped 0.7% last week to settle at $2,038.70 an ounce on Comex after the most-active April contract fell 0.5% Friday. Bullion declined 0.2% in January after gaining 0.7% in December and rising 3.2% in November. The metal rose 13% in 2023. The April contract is currently down $8.3 (-0.41%) an ounce to $2030.40 and the DG spot price is $2015.50.

Speculators raised their net long positions in Comex gold by 10,616 contracts to 82,591 in the week ended Feb. 6, according to the Commitments of Traders report released Friday by the U.S. Commodity Futures Trading Commission. 

Dallas Fed President Lorie Logan said Friday that policymakers have time to assess new economic data and that there’s no rush to cut interest rates.

“I’m really not seeing any urgency to make any additional adjustments to rates at this time while we get a better understanding and build our confidence whether the progress that we’ve seen in inflation will be sustained over the medium run,” she said at an event in Hurst, Texas, according to Bloomberg. 

The Fed kept interest rates unchanged at 5.25% to 5.50% earlier this month amid declines in the inflation rate. Higher interest rates are typically considered bearish for gold, so cuts would be supportive for the precious metal. But holding rates high for a longer period of time would be bearish. 

About 84.5% of the investors tracked by the CME FedWatch Tool are betting that the Fed will keep rates unchanged next month, while 15.5% expect a 25 basis point cut. A month ago, more than 65% of investors were anticipating a cut in March. But a majority of investors tracked by the tool anticipate a cut at the Fed’s following policy meeting in May.

A number of Fed officials are expected to speak this week and may provide further direction. U.S. retail sales data come out Thursday and the producer price index on Friday. 

Front-month silver futures declined 0.9% last week to $22.59 an ounce on Comex after the March contract slid 0.2% Friday. Silver fell 3.8% in January after dropping 6.1% in December and advancing 12% in November. It ticked up 0.2% in 2023. The March contract is currently up $0.101 (+0.45%) an ounce to $22.695 and the DG spot price is $22.68.

Spot palladium fell 8.3% last week to $879.00 an ounce after retreating 2.4% Friday.

Palladium tumbled 11% last month after advancing 8.6% in December and losing 9.5% in November. Palladium plummeted 38% last year. Currently, the DG Spot price is up $18.20 an ounce to $898.50.

Spot platinum lost 2.2% last week to $880.70 an ounce after decreasing 1.6% Friday. Platinum fell 8% last month after rising 8.1% in December and falling 0.7% in November. Platinum dropped 6.8% in 2023. The DG spot price is currently up $5.40 an ounce to $884.60.

Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or a recommendation regarding any particular security, commodity, or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities, or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand, and accept this disclaimer.