Gold holds solidly above $3000 near record levels early Wednesday as investors awaited further direction from the Federal Reserve.
The central bank is widely expected to keep interest rates unchanged in a monetary policy announcement scheduled for Wednesday afternoon, but markets will be closely parsing policymakers’ statement and comments from Fed Chairman Jerome Powell about economic conditions.
Prices are also slightly lower on profit taking after the recent runup. The yellow metal closed above $3,000 for the first time on Friday amid haven demand from economic and geopolitical risk.
April gold futures rose 1.2% Tuesday to settle at $3,040.80 an ounce on Comex after the most-active contract rallied 1.3% in the first two days of the week. Bullion is up 6.8% in March after rising 0.5% last month and gaining 7.3% in January. The metal rose 27% in 2024, its biggest annual gain since 2010. The April contract is currently, slightly down $5.30 (-0.17%) an ounce to $3035.90 and the DG spot price is $032.90.
The Fed reduced rates three times in 2024, but most investors aren’t pricing in another Fed rate reduction until June, according to investors tracked by the CME FedWatch Tool. About 99% expect rates to remain unchanged Wednesday, compared with 1% anticipating a 25 basis point cut. Rate cuts are typically considered bullish for gold because they make the precious metal a more attractive alternate investment.
The Fed’s benchmark interest rate is currently at 4.25% to 4.50%. The Fed 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.
Investors were also closely watching geopolitics, particularly ceasefire talks on Ukraine between the U.S. and Russia and the escalating war in Gaza. Tariff threats between the U.S. and key trading partners have also kept the global markets edgy, bringing with them fears of rebounding inflation, an economic slowdown and a recession.
Front-month silver futures rose 1.5% Tuesday to settle at $34.82 an ounce on Comex, and the May contract was up 1.1% in the first two days of the week. Silver is up 11% this month after retreating 2.4% in February and adding 10% in January. It gained 21% in 2024. The May contract is down $0.628 (-1.80%) an ounce to $34.190 and the DG spot price is $33.58.
Spot palladium lost 0.2% Tuesday to $976.00 an ounce but is up 0.4% so far this week. Palladium is up 5.1% this month after retreating 10% in February and advancing 11% in January. Palladium dropped 17% last year. The DG spot price is currently down $15.70 an ounce to $968.50.
Spot platinum fell 0.7% Tuesday to $1,007.40 an ounce, though it increased 0.5% so far this week. Platinum is up 6.8% in March after sliding 4.7% in February and gaining 8.4% in January. Platinum lost 8.4% in 2024. The current DG spot price is down $21.60 an ounce to $989.80.
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