Gold rises early Wednesday as investors bought up the precious metal following a dip the first two days of the week and amid increased fears of a prolonged Middle East conflict. The yellow metal is also buoyed by a slipping dollar.
Trading remained volatile amid uncertainty on the fifth day of U.S.-Israel war on Iran. The conflict had strengthened the dollar, making gold a more expensive asset to holders of other currencies, while a strong dollar, bond yields and energy prices made other assets more attractive. That triggered a broad selloff in equity and precious metal markets Tuesday.
Initially, the conflict added to a historic rally in gold, which rallied for a seventh consecutive month in February, the longest rising streak since 1973.
April gold futures dropped 3.5% Tuesday to settle at $5,123.70 an ounce on Comex and are down 2.4% so far this week. Bullion surged 11% in February after climbing 9.3% in January and rising 2% in December. It rallied 64% last year. The April contract is currently up $68.70 (+1.34%) an ounce to $5192.40 and the DG spot price is $5170.30.
In addition to headlines from the Middle East, investors are continuing to monitor tariff uncertainty, concerns about the Federal Reserve’s independence and next moves on monetary policy and the results of early U.S. primary elections.
Private sector hiring improved in February, according to ADP’s report this morning. Companies added a seasonally adjusted 63,000 workers during the month, an improvement from the downwardly revised 11,000 in January and better the 48,000 forecast. The weekly initial jobless claims report come out tomorrow and the U.S. Labor Department’s monthly jobs report for February on Friday. These key monthly jobs reports are likely to signal the Fed’s possible next moves on interest rates.
The Fed has indicated that it closely watches inflation and the labor market when setting monetary policy. The central bank kept interest rates unchanged in January after three previous rate cuts. Lower interest rates are considered bullish for gold, making it a more attractive alternate investment.
More than 97% of the investors tracked by the CME FedWatch Tool are betting that the Fed will keep interest rates unchanged again this month, with the rest anticipating a 25 basis point cut. The Fed reduced interest rates for a third consecutive time in December to 3.50% to 3.75%. 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 slid 6.1% Tuesday to settle at $83.47 an ounce on Comex, and the May contract tumbled 11% in the first two days of the week. It touched a record above $115 in January. Silver gained 19% last month after advancing 11% in January and climbing 24% in December. It rose 141% last year. The May contract is currently up $1.442 (+1.73%) an ounce to $84.915 and the DG spot price is $84.51.
Spot palladium decreased 5.8% Tuesday to $1,679.50 an ounce and has dropped 6.6% so far this week. Palladium gained 8.8% in February after advancing 2.4% in January and increasing 11% in December. Palladium gained 74% last year. Currently, the DG spot price is up $38.30 an ounce to $1692.00.
Spot platinum declined 9.3% Tuesday to $2,103.90 an ounce and is down 11% this week. It advanced 15% last month after gaining 1.4% in January and surging 22% in December. Platinum increased 122% in 2025. The DG spot price is currently up $76.30 an ounce to $2158.80.
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