Gold falls early Friday as reports that U.S. President Donald Trump will appoint Kevin Warsh as the next Federal Reserve chairman triggered a correction after precious metals rallied to record highs this week. Gold also slipped as the dollar firmed on the Fed Chair report. However, the yellow metal is still headed for weekly and monthly rallies.
Gold is also reacting this morning to the latest inflation data. The Producer Price Index for December shows the the cost of wholesale goods and services jumped 0.5% in December. The report was delayed by the government shutdown last fall. Economists polled by Reuters had forecast the PPI climbing 0.2%.
The declines in the yellow metal, which is still poised for its best month since 1980, were triggered by the reports on Warsh, a longtime inflation hawk who has nevertheless aligned with Trump in recent months by arguing for lower interest rates. But the markets were generally volatile after the recent upswing.
The Fed on Wednesday kept benchmark interest rates unchanged at 3.50% to 3.75% after reducing rates at the previous three policy meetings. 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.
Trump and outgoing Fed Chairman Jerome Powell, whose term ends in May, have been at loggerheads over the president’s call for lower interest rates. Fed independence has also been called into question amid a Justice Department investigation into Powell.
April gold futures rose 0.3% Thursday to settle at $5,354.80 an ounce on Comex, and the front-month contract rallied 6.7% in the first four days of the week. Bullion is up 23% this month after rising 2% in December and gaining 6.5% in November. It rallied 64% last year. The April contract is currently down $241.10 (-4.50%) an ounce to $5113.70 and the DG spot price is $5023.80.
March silver futures gained 0.8% Thursday to settle at $114.43 an ounce on Comex, and the front-month contract is up 13% this week after touching new record above $115. The white metal has hit a series of record highs in recent weeks amid surging industrial demand. Silver is up 62% this month after soaring 24% in December and increasing 19% in November. It climbed 141% last year. The March contract is currently down $13.819 (-12.08%) an ounce to $100.61 and the DG spot price is $99.70.
Powell said Wednesday that the U.S. economy is on a “firm footing,” and the central bank’s statement said the unemployment rate has shown signs of stabilization.
Almost than 97% of investors are betting that the Fed will keep interest rates unchanged again in March, according to figures tracked by the CME FedWatch Tool. About 13% expect another 25 basis point cut. The Fed reduced interest rates for a third consecutive time last month to 3.50% to 3.75%.
Gold prices remained elevated amid haven investors amid tensions between the U.S. and NATO allies over President Donald Trump’s attempts to claim Greenland as well as geopolitical uncertainty over places like Venezuela, Ukraine and Gaza. Additionally, reports Thursday indicated that Trump is weighing new military options against Iran.
Spot palladium lost 1.3% Thursday to $2,020.50 an ounce and is down 0.5% so far this week. Palladium is up 25% this month after increasing 11% in December and adding 0.5% in November. Palladium gained 74% last year. Currently, the DG spot price is currently down $178.60 an ounce to $1850.00.
Spot platinum fell 1.1% Thursday to $2,621.60 an ounce and is down 5.5% this week. It’s up 29% so far this month after surging 22% in December and climbing 4.7% in November. Platinum increased 122% in 2025. The DG spot price is currently down $330.00 an ounce to $2310.30.
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