Gold gains on softer dollar Wednesday morning ahead of Fed minutes as investors await further direction from upcoming signals on monetary policy.
The minutes of the last Federal Reserve policymakers’ meeting last month are scheduled for release Wednesday, and Fed Chairman Jerome Powell is set to speak Friday at the central bank’s annual gathering at Jackson Hole, Wyoming. Investors will be parsing both the minutes and Powell’s comments for signs of how many times the central bank is likely to cut interest rates this year.
December gold futures fell 0.6% Tuesday to settle at $3,358.70 an ounce on Comex, and the front-month contract dropped 0.7% in the first two days of the week. Bullion gained 1.2% in July after slipping 0.2% in June and losing 0.1% in May. It’s up 27% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The December contract is currently up $26.80 (+0.80%) an ounce to $3385.50 and the DG spot price is $3344.50.
The Fed minutes are likely to provide a snapshot of policymakers’ thinking when they voted to keep interest rates unchanged last month at 4.25% to 4.50%. The Fed has held at that rate all year, despite encouragement from the Trump administration to immediately impose cuts.
Investors are overwhelmingly betting on a rate cut at the Fed’s next policy meeting in September and most expect one more this year, though economic reports including on inflation and the labor market may affect policymakers’ thinking. Lower interest rates are typically bullish for gold, making the yellow metal a more attractive alternate investment.
Over 89% of the investors tracked by the CME FedWatch Tool are betting that the Fed will cut rates next month. 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. But two key reports released last week showed that U.S. inflation surged last month, weighing on the economy.
In Powell’s speech in Jackson Hole – the last of his term – he’s expected to provide a snapshot on the state of the economy amid the administration’s tariffs and trade policy.
In economic news, U.S. leading economic indicators for July and weekly initial jobless claims for last week come out on Thursday. Then U.S. consumer confidence data comes out Friday.
Front-month silver futures decreased 1.9% Tuesday to settle at $37.81 an ounce on Comex, and the December contract is down 1.7% so far this week. Silver rose 1.5% in July after increasing 9.5% in June and adding 0.6% in May. It rose 21% in 2024. The September contract is currently up $0.408 (+1.09%) an ounce to $37.740 and the DG spot price is $37.81.
Spot palladium tumbled 2.3% Tuesday to $1,110.00 an ounce and is down 0.9% so far this week. Palladium climbed 8.8% in July after surging 14% in June and advancing 2.8% in May. Palladium dropped 17% last year. The current DG spot price is up $20.50 an ounce to $1132.50.
Spot platinum tumbled 2.2% Tuesday to $1,310.70 an ounce and is down 2.6% so far this week. It dropped 3.9% in July after climbing 27% in June and rising 8.6% in May. Platinum lost 8.4% in 2024. The DG spot price is currently up $27.70 an ounce to $1341.60.
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