Gold hovering near $3,000 an ounce, as it edged lower early Monday on profit taking after the yellow metal rallied to a record above the $3,000-an-ounce threshold for the first time in the previous session.
The precious metal remained near the record on haven demand from economic and geopolitical risk which sent gold climbing 3% last week. Investors are awaiting the statement from this week’s meeting of Federal Reserve policymakers for an assessment of economic conditions and further direction.
April gold futures rose 0.3% Friday to settle at $3,001.10 an ounce on Comex, and the most-active contract is up 5.4% in March. Bullion rose 0.5% last month after gaining 7.3% in January and dropping 1.5% in December. The metal rose 27% in 2024, its biggest annual gain since 2010. The April contract is currently down $7.20 (-0.24%) an ounce to $2993.90 and the DG spot price is $2991.40.
Ongoing concern about geopolitical and economic risk, including from U.S. President Donald Trump’s tariffs and trade policy and unrest in Ukraine, the Middle East and other parts of the world, attracted risk-off investors to gold even as the broader market tumbled. The S&P 500 Index entered into correction territory last week before rebounding Friday.
Macquarie Group forecast prices would rally to $3,500 an ounce in the second quarter, while BNP Paribas raised its outlook for average prices to well above $3,000, Bloomberg reported.
Global markets have been increasingly volatile amid U.S. tariff threats, delays and reciprocal moves by trading partners. The tit-for-tat exchanges have revived concerns about high inflation and a possible recession, which makes this week’s Fed guidance especially important, though the central bank is widely expected to leave interest rates unchanged this month.
The central bank 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.
Front-month silver futures rose 5% last week to settle at $34.43 an ounce on Comex, after the May contract increased 0.4% Friday. Silver is up 9.3% this month after retreating 2.4% in February and adding 10% in January. It gained 21% in 2024. The May contract is currently down $0.368 (-1.07%) an ounce to $34.065 and the DG spot price is $33.60.
Spot palladium gained 1.6% last week to $972.50 an ounce after rallying 0.7% Friday. Palladium is up 4.7% this month after retreating 10% in February and advancing 11% in January. Palladium dropped 17% last year. The current DG spot price is down $2.40 an ounce to $974.50.
Spot platinum rose 3.6% last week to $1,002.40 an ounce and increased 0.6% Friday. Platinum is up 6.2% in March after sliding 4.7% in February and gaining 8.4% in January. Platinum lost 8.4% in 2024. The DG spot price is currently down $3.10 an ounce to $998.10
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