Gold tips lower early Friday but was headed for a weekly gain amid uncertainty about the staying power of the ceasefire announced between the U.S.-Israel coalition and Iran.
The yellow metal rebounded from recent lows after the announcement of the two-week ceasefire on Tuesday but persistent fears that a prolonged conflict would worsen inflation kept prices lower. Initial reports of a ceasefire were bearish for the dollar and oil prices, making gold a more attractive asset for investors. The dollar is headed for its largest weekly loss since January.
The Fed’s favorite inflation measure, the personal consumption expenditures price index, came out Thursday with February data and indicated that core PCE – which excludes volatile food and energy prices – was at 3% before the war began, well above the Fed’s target of 2%. Minutes of the Fed policy meeting in March, which were released Wednesday, showed growing openness to the possibility of rate hikes to combat inflation if the conflict and high oil prices persist. Higher interest rates are typically bearish for gold, making it a less attractive alternate investment.
The Iran conflict has erased expectations that the Fed would cut interest rates this year. and the consumer price index, another inflation measure, is due out Friday with March data. It will provide further insight on what the conflict has done to the economy.
June gold futures were rose 0.9% Thursday to $4,818.00 an ounce on Comex, and the most-active contract gained 3% in the first four days of the week. Bullion slid 11% in March after climbing 11% in February and rising 9.3% in January. It rallied 64% last year. The June contract is currently down $17.40 (-0.36%) an ounce to $4800.60 and the DG spot price is $4772.70.
Most investors tracked by the CME FedWatch Tool expect the Federal Reserve to keep U.S. interest rates unchanged this year. Almost all the investors tracked by the tool are betting on rates staying unchanged at the next policy meeting in April.
Fed policymakers last month kept interest rates unchanged again at 3.50% to 3.75%. The Fed has kept interest rates unchanged this year after three previous rate cuts. 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.
Front-month silver futures gained 1.4% Thursday to settle at $76.44 an ounce on Comex, and the May contract rallied 4.8% in the first four days of the week. The most-active contract touched a record above $115 in January. Silver dropped 20% last month after gaining 19% in February and advancing 11% in January. It rose 141% last year. The May contract is currently down $0.023 (-0.03%) an ounce to $76.415 and the DG spot price is $76.15.
Spot palladium decreased 1.4% Thursday to $1,576.50 an ounce, but is up 4.1% this week. Palladium tumbled 17% in March after gaining 8.8% in February and advancing 2.4% in January. Palladium rose 74% last year. Currently, the DG spot price is down $31.50 an ounce to $1534.50.
Spot platinum increased 2.2% Thursday to $2,120.90 an ounce and has advanced 6.3% this week. It declined 17% in March after advancing 15% in February and gaining 1.4% in January. Platinum increased 122% in 2025. The DG spot price is currently dow $49.20 an ounce to $2063.10.
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