Gold slips early Friday as haven demand eases due to growing optimism about trade deals between the U.S. and its main partners, particularly the EU.
European partners on Thursday expressed hopes about a possible trade deal with the U.S. but have also made clear that they are prepared to retaliate if the talks should fail. Every EU country voted in favor of a retaliatory plan for levies in August if the negotiations don’t go through. Earlier this week, U.S. President Donald Trump announced a trade deal with Japan, also easing the appetite for the precious metal by risk-off investors.
The U.S. dollar index rebounded from its lowest in more than two weeks, adding to the pressure on the yellow metal.
December gold futures fell 0.7% Thursday to settle at $3,431.10 an ounce on Comex, and the front-month contract, which rolled from August this week, gained 2.2% in the first four days of the week. Bullion is up 3.7% 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 December contract is currently down $32.70 (-0.95%) an ounce to $3398.40 and the DG spot price is $3345.90.
Investors are increasingly turning their focus back to speculation about the economy and monetary policy, specifically what the Federal Reserve, led by Jerome Powell, will say in its statement after a regularly scheduled meeting next week. Trump and Powell sparred Thursday as the president visited the Fed headquarters Thursday and publicly chastised the central bank for a long-planned renovation project. Trump has repeatedly criticized Powell and Fed policymakers for keeping interest rates unchanged this year after cutting it three times last year.
Powell has said the central bank wants to gauge the effect of Trump’s tariff policy on the economy. The Fed initially raised rates during the pandemic to protect against inflation.
Most investors are still betting that the Fed will begin rate cuts at its September meeting, not at the next 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 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 lost 0.7% Thursday to settle at $39.22 an ounce on Comex, and the most-active September contract rose 2% in the first four days of the week. Silver is up 8.4% this month after increasing 9.5% in June and adding 0.6% in May. It rose 21% in 2024. The September contract is currently down $0.224 (-0.57%) an ounce to $39.000 and the DG spot price is $38.89.
Spot palladium decreased 2.5% Thursday to $1,243.50 an ounce and is down 1.7% so far this week. Palladium is up 12% so far this month after surging 14% last month and advancing 2.8% in May. Palladium dropped 17% last year. Currently, the DG spot price is down $9.60 an ounce to $1239.00.
Spot platinum retreated 1.3% Thursday to $1,411.30 an ounce and is down 2.4% this week. It has gained 4.9% so far this month after climbing 27% last month and rising 8.6% in May. Platinum lost 8.4% in 2024. The DG spot price is currently down $22.90 an ounce to $1392.60.
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