Gold rose early Friday, as it headed for its eighth consecutive weekly advance amid robust haven demand. Meanwhile, silver topped $50 an ounce for the first time in decades.
Gold, which settled at a record high above $4,000 an ounce for the first time this week, has seen strong buying this year from geopolitical risks, fiscal uncertainties, threats to Federal Reserve independence and the government shutdown – which is in its 10th day. Expectations that the Fed will extend interest rate cuts at its meeting further this month further buoyed prices. But even as gold retreated Thursday on profit taking, silver touched a record high above the $50-an-ounce threshold, only to settle lower for the day.
December gold futures fell 2.4% Thursday to settle at $3,972.60 an ounce on Comex after settling at a record high on Wednesday. But the front-month contract gained 1.6% in the first four days of the week. Bullion surged 10% in September, the most in six months, after adding 5% in August and gaining 1.2% in July. It’s up 50% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The December contract is currently up $17.40 (+0.44%) an ounce to $3990.00 and the DG spot price is $3981.70.
Front-month silver futures lost 3.8% Thursday to settle at $47.16 an ounce on Comex, and the December contract decreased 1.7% in the first four days of the week. Silver rose 15% last month, the biggest monthly rally in two and a half years, after climbing 11% in August and gaining 1.5% in July. It rose 21% in 2024. The December contract is currently up $0.863 (+1.83%) an ounce to $48.020 and the DG spot price is $50.02
Both metals sold off from the record highs on Thursday alongside the equities market.
The minutes of the last Fed policy meeting last month, released Wednesday, show that officials anticipate interest rate cuts at the remaining two meetings this year, at the end of October and in December. The minutes showed policymakers were nearly unanimous in thinking that weakness in the labor market required a rate cut. The only question was by how much.
The report is one of the few federal indicators on the state of the economy that is still set for release since the government shutdown began last week. The shutdown suspended a series of key reports, including the monthly jobs report for September.
But reports Thursday indicated that the federal government is calling employees at the Bureau of Labor Statistics back to work so they can publish a key inflation report for September, the consumer price index. It’s scheduled for release Oct. 15, but it’s unclear whether that might be delayed.
CPI data is needed to allow the government to calculate Social Security payments but it’s also widely followed by economists as a key signal of the economy. The Fed closely watches both inflation and jobs data when determining monetary policy.
The Fed lowered interest rates by 25 basis points in September to 4.00% to 4.25% and is widely expected to cut rates again in October. Lower interest rates are typically bullish for gold.
Almost 95% of the investors tracked by the CME FedWatch Tool are betting that the Fed will reduce rates by 25 basis points in October, with the rest expecting the central bank to hold rates unchanged. 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.
Spot palladium tumbled 2% Thursday to $1,423.00 an ounce and is up 12% so far this week. Palladium rose 14% in September after declining 7.8% in August and climbing 8.8% in July. Palladium dropped 17% last year. The current DG spot price is up $47.00 an ounce to $1467.00.
Spot platinum slid 2.6% Thursday to $1,625.20 an ounce but is up 0.7% in the first four days of the week. It increased 15% in September after rising 5.9% in August and dropping 3.9% in July. Platinum lost 8.4% in 2024. The DG spot price is currently up $9.00 an ounce to $1635.40.
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