Gold slipped early Wednesday after U.S. President Donald Trump announced a U.S.-Japan trade deal, easing the appetite for the precious metal by risk-off investors.
Prices remained elevated, however, as the dollar hovered near two-week lows, making gold a more attractive asset for investors holding other currencies.
August gold futures rose 1.1% Tuesday to settle at $3,443.70 an ounce on Comex, and the front-month contract gained 2.5% in the first two days of the week. Bullion is up 4.1% this month after slipping 0.2% in June and losing 0.1% in May. It’s up 30% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The August contract is currently down $23.40 (-0.68%) an ounce to $3420.30 and the DG spot price is $3413.90.
The deal with Japan buoyed equities’ beyond their recent rally. Trump said the agreement will set tariffs on Japanese imports at 15% and that Japan will invest $550 billion into the U.S. The Treasury Secretary, Scott Bessent, said he would be meeting with his Chinese counterparts in Stockholm next week for the last round of talks with Beijing.
Meanwhile, Bessent and Trump both seem to have eased off calls for Federal Reserve Chairman Jerome Powell to step aside or be fired because the Fed hasn’t been as quick as they’d like to cut key interest rates.
Investors are closely awaiting the language around next week’s Fed policy meeting for the latest indications on monetary policy. Most investors are still betting that the Fed will begin rate cuts at its September meeting, not the one next week, according to the CME FedWatch Tool. The Fed’s favorite inflation measure, the personal consumption expenditures price index, is also due out next week with the latest snapshot on the costs of goods and services.
The Fed kept interest rates unchanged at 4.25% to 4.50% in June, though policymakers signaled that the central bank is still factoring two interest rate cuts this year. The Fed reduced rates three times in 2024 but has held them steady this year. 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.
Front-month silver futures added 0.6% Tuesday to settle at $39.56 an ounce on Comex, and the most-active September contract rose 2.9% in the first two days of the week. Silver is up 9.4% this month after increasing 9.5% in June and adding 0.6% in May. It rose 21% in 2024. The September contract is currently up $0.160 (+0.40%) an ounce to $39.715 and the DG spot price is $39.42.
Spot palladium increased 0.9% Tuesday to $1,294.50 an ounce and is up 2.3% so far this week. Palladium is up 17% so far this month after surging 14% last month and advancing 2.8% in May. Palladium dropped 17% last year. The DG spot price is currently up $0.10 an ounce to $1280.50.
Spot platinum retreated 1.3% Tuesday to $1,448.00 an ounce but is up 0.2% this week. It has gained 7.6% so far this month after climbing 27% last month and rising 8.6% in May. Platinum lost 8.4% in 2024. The current DG spot price is down $17.30 an ounce to $1432.70.
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