Gold slipped early Monday, coming off a two-week high, after the dollar strengthened coming off a four-week low.
The precious metal had some support, though, after comments Friday by Federal Reserve Chairman Jerome Powell increased expectations of U.S. interest rate cuts. Rate reductions are typically bullish for gold. His comments caused equities to surge Friday, with the Dow Jones Industrial Average rising more than 900 points to set a new intraday record.
December gold futures rose 1.1% last week to settle at $3,418.50 an ounce on Comex after the front-month contract rallied 1.1% Friday. Bullion gained 1.2% in July after slipping 0.2% in June and losing 0.1% in May. It’s up 29% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The December contract is currently down $5.50 (-0.16%) an ounce to $3413.00 and the DG spot price is $3371.40.
“The shifting balance of risks may warrant adjusting our policy stance,” Powell said in his speech in Jackson Hole, Wyoming. He cited recent slowdowns in monthly jobs growth but noted that inflation is still too high.
More than 86% of the investors tracked by the CME FedWatch Tool are betting that the Fed will cut rates next month. 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 kept interest rates unchanged last month at 4.25% to 4.50%, a rate that it’s held all year, despite encouragement from the Trump administration to immediately impose cuts.
The Fed’s favorite inflation measure, the personal consumption expenditures price index, is due out Friday with July data and will provide investors with a new snapshot on the state of the economy and the central bank’s likely next moves. U.S. GDP data for the second quarter comes out Thursday along with weekly initial jobless claims. Consumer sentiment data for August also comes out Friday.
Last week, U.S. consumer confidence data for July showed a slight improvement from the prior month but indicated that Americans remain concerned about U.S. President Donald Trump’s tariffs policy and its impact on their economic futures.
Front-month silver futures rose 2.8% last week to settle at $39.56 an ounce on Comex after the December contract gained 2.5% Friday. Silver rose 1.5% in July after increasing 9.5% in June and adding 0.6% in May. It rose 21% in 2024. The September contract is currently down $0.404 (-1.03%) an ounce to $36.50 and the DG spot price is $38.77.
Spot palladium increased 1.1% last week to $1,133.00 an ounce and advanced 1.6% Friday. Palladium climbed 8.8% in July after surging 14% in June and advancing 2.8% in May. Palladium dropped 17% last year. Currently, the DG spot price is down $25.20 an ounce to $1105.50.
Spot platinum rose 1.6% last week to $1,366.80 an ounce after adding 0.7% Friday. It dropped 3.9% in July after climbing 27% in June and rising 8.6% in May. Platinum lost 8.4% in 2024. The DG spot price is currently down $16.30 an ounce to $1348.80.
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.