Gold regains ground back over $4100 an ounce on this morning’s cooler than expected inflation data. The yellow metal still expected to take a break from nine weeks of rallies on a profit-taking selloff from record highs and signs that the trade standoff between the U.S. and China might thaw.
The consumer price index (CPI) showed a 0.3% rise on the month for September, putting the annual inflation rate at 3%, both numbers are lower than expected. Economists had forecast respective readings of 0.4% and 3.1%. The Bureau of Labor Statistics released the data specifically because the Social Security Administration uses it as a benchmark for cost-of living adjustments in benefit checks. Otherwise, the federal government has suspended all data compilation. Gold rose back over $4100 on the news. The Fed, which is overwhelmingly expected to cut interest rates again, closely watches inflation numbers.
U.S. President Donald Trump and Chinese President Xi Jinping are set to meet next week to try to defuse the trade war. Geopolitical and economic tensions contributed to the precious metal’s rally, as gold is a traditional hedge against uncertainty. Gold continued to gain support from the U.S. government shutdown, now in its 24th day, and conflicts in Ukraine and Gaza.
December gold futures rose 2% Thursday to settle at $4,145.60 an ounce on Comex, but the front-month contract lost 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 57% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The December contract is currently down $23.30 (-0.56%) an ounce to $4122.30 and the DG spot price is $4120.70.
Trump and Xi are set to meet next week at the APEC summit in South Korea, the White House said Thursday, It will be the first time the two men have met in person since Trump’s second term began. The meeting will be closely watched for signals that the two countries can resolve their trade standoff.
The day before the summit, Fed policy makers are set to meet on monetary policy. Almost all of the investors tracked by the CME FedWatch Tool are betting that the Fed will reduce rates by 25 basis points. 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. The Fed lowered interest rates by 25 basis points in September to 4.00% to 4.25%.
A Fed rate cut would be considered bullish for gold, which becomes a more attractive financial asset when rates decline.
Front-month silver futures gained 2.1% Thursday to settle at $48.70 an ounce on Comex, but the December contract tumbled 2.8% 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 down $0.254 (-0.52%) an ounce to $48.450 and the DG spot price is $48.90.
Spot palladium added 2.4% Thursday to $1,464.50 an ounce and is down 2% 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 DG spot price is currently down $14.90 an ounce to $1455.50.
Spot platinum increased 1.7% Thursday to $1,637.20 an ounce and is up 1.1% so far this 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 down $10.20 an ounce to $1618.20.
Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or a recommendation regarding any particular security, commodity, or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities, or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand, and accept this disclaimer.