Gold rebounded early Friday after U.S. President Donald Trump extended his deadline for Iran to reopen the Strait of Hormuz, which was read as a signal that the conflict in the Middle East may stretch out, worsening inflation and perhaps sending interest rates higher. The yellow metal also getting support as investorsbuy the dip.
Iran said it rejected a 15-point plan from the U.S. to end the nearly month-long war, which has driven up oil prices because of the closure of the strait of Hormuz, through which about a fifth of typical daily global consumption passes. The higher cost of oil and a potential trickle-down effect on other goods has erased previous expectations that the Federal Reserve will cut interest rates this year. But oil prices fell on the deadline extension, reducing that speculation.
Lower interest rates are typically bullish for gold, making it a more attractive alternate investment. Investors are awaiting the next key economic indicator, consumer sentiment data for March, to be released at 10 am EDT Friday, for further direction.
June gold futures tumbled 3.9% Thursday to settle at $4,409.00 an ounce on Comex, and the most-active contract slid 4.4% in the first four days of the week. Bullion has plummeted 16% this month after climbing 11% in February and rising 9.3% in January. It rallied 64% last year. The June contract is currently up $47.20 (+1.07%) an ounce to $4456.20 and the DG spot price is $4436.80.
Prices fell Thursday along with the broader market as the Iran conflict looked set to continue. Reports indicated that Trump is looking at sending another 100,000 ground troops to the Middle East.
In separate news, the Monetary Authority of Singapore said Friday it will seek to expand its gold-storage capacity to store bullion held by foreign central banks.
In a switch since the war began, most investors tracked by the CME FedWatch Tool expect the Fed to keep interest rates unchanged this year, and some are now betting on a rate hike instead of the rate cut they were previously anticipating. Almost 94% of investors tracked by the tool are betting on rates staying unchanged at the next policy meeting in April, and the rest are now betting on an increase.
Fed policymakers last week 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 dropped 6.5% Thursday to settle at $67.93 an ounce on Comex, and the May contract is down 2.5% so far this week. The most-active contract touched a record above $115 in January. Silver is down 27% this month after gaining 19% in February and advancing 11% in January. It rose 141% last year. The May contract is currently up $0.036 (+0.05%) an ounce to $67.970 and the DG spot price is $68.04.
Spot palladium decreased 5.6% Thursday to $1,364.00 an ounce and is down 5.8% this week. Palladium is down 24% this month after gaining 8.8% in February and advancing 2.4% in January. Palladium rose 74% last year. Currently, the DG spot price is up $28.70 an ounce to $1396.50.
Spot platinum fell 5.2% Thursday to $1,855.40 an ounce and is down 6.2% this week. It’s down 22% this month after advancing 15% in February and gaining 1.4% in January. Platinum increased 122% in 2025. The DG spot price is currently down $22.70 an ounce to $1848.30.
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