Gold dropped early Monday, losing haven investors after the White House said that trade talks between the U.S. and China over the weekend were “productive.”
The administration said the two countries had reached a “trade deal” after the talks over the weekend in Switzerland and said details would be forthcoming on Monday. The possibility of an end to the trade war between the world’s two biggest economies boosted the broader market but pressured gold, a traditional hedge against geopolitical uncertainty. That uncertainty has boosted the precious metal to a aseries of records in recent weeks.
June gold futures rose 3.1% last week to settle at $3,344.00 an ounce on Comex, after the front-month rallied 1.2% Friday. Bullion increased 5.4% in April after gaining 11% in March and adding 0.5% in February. It’s up 27% so far this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The June contract is currently down $104.60 (-3.13%) an ounce to $3239.40 and the DG spot price is $3242.80.
U.S. Treasury Secretary Scott Bessent said Sunday that the talks resulted in “a great deal” of productivity and that he would brief more fully on Monday morning. U.S. Trade Representative Jamieson Greer said that officials of the U.S. and China reached some sort of “deal.”
Investors were also awaiting the release of key U.S. inflation number this week for indications on the state of the economy and the likelihood of the Federal Reserve’s next moves on monetary policy. The central bank last week left interest rates unchanged again at 4.25% to 4.50%.
The U.S. consumer price index for April comes out Tuesday, followed by the producer price index on Thursday. The Fed has said it closely watches both inflation and labor market data when determining monetary policy.
Most investors tracked by the CME FedWatch Tool now expect the Fed to begin interest rate cuts in September, not the next scheduled policy meeting in June or July. Lower interest rates are typically bullish for gold, making the yellow metal a more attractive alternate investment.
The Fed left rates unchanged at policymakers’ meetings this year after reducing rates 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 gained 2% last week to settle at $32.91 an ounce on Comex, after the July contract increased 0.9% Friday. Silver dropped 5.2% last month after advancing 9.9% in March and retreating 2.4% in February. It gained 21% in 2024. The July contract is currently down $0.109 (-0.33%) an ounce to $32.805 and the DG spot price is $32.71.
Spot palladium climbed 3.3% last week to $987.00 an ounce and edged up 0.3% Friday. Palladium fell 4.9% last month after rising 7.3% in March and retreating 10% in February. Palladium dropped 17% last year. Currently, the DG spot price is down $19.00 an ounce to $971.50.
Spot platinum advanced 4.1% to $1,009.10 an ounce and rose 2.5% Friday. Platinum retreated 3.1% in April after increasing 6.7% in March and sliding 4.7% in February. Platinum lost 8.4% in 2024. The DG spot price is currently down $24.20 an ounce to $987.00.
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