Gold slips early Monday as the yellow metal’s rally ran out of steam as the dollar gained strength and investors shifted back to some other assets amid signs that trade tensions may be easing.
Many Asian countries are stepping up bilateral trade talks with the U.S. in an attempt to lift tariffs imposed by President Donald Trump’s administration. The moves are sending investors cautiously back to other markets and easing some of the haven demand that caused gold to hit a series of records last week.
The U.S. dollar was also little changed against other major currencies. Its recent declines on tariff concerns helped fuel gold’s recent rally. A weaker dollar is typically bullish for gold, making the dollar-denominated precious metal more affordable to holders of other currencies.
June gold futures fell 0.9% last week to settle at $3,298.40 an ounce on Comex after the front-month contract slid 1.5% Friday. Bullion has increased 4.7% so far this month after gaining 11% in March and adding 0.5% in February. It’s up 25% so far this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The June contract has currently tipped up $1.70 (+0.05%) an ounce to $3300.10 and the DG spot price is $3290.90.
In physical news, China’s gold consumption fell almost 6% in the first quarter compared with a year earlier, reaching 290,492 metric tons, according to data released Monday by the China Gold Association and reported by Reuters. China is the world’s largest gold consumer. The association said high prices have continued to limit demand for gold jewelry, with consumption falling almost 27% year on year during the quarter. Consumption of gold bars and coins, on the other hand, rose almost 30% during the same period on haven demand from investors.
April consumer sentiment fell for a fourth consecutive month in April, according to data released Friday by the University of Michigan, reinforcing some speculation that the economy is weakening and the Federal Reserve may have to cut interest rates sooner than had been expected.
Investors will be closely watching U.S. first quarter GDP and monthly employment data for April later this week for further signals on the Fed’s next moves. The GDP report will cover the first few months of Trump’s presidency. Meanwhile, the April U.S. jobs report, scheduled for release Friday, is likely to indicate how widespread the impact of government cuts over the past three months have been on the labor force. The Fed closely watches both inflation and the labor market when setting monetary policy.
The central bank has been widely expected to continue interest rate cuts this year. Most investors tracked by the CME FedWatch Tool expect the Fed to begin interest rate cuts in June but keep them unchanged at the central bank policymakers’ meeting next week. Lower interest rates are typically bullish for gold.
The Fed left rates unchanged at 4.25% to 4.50% at policymakers’ last meeting in March but reduced rates three times in 2024. 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. Previously, the Fed had kept rates at 5.25% to 5.50% for a year.
Front-month silver futures rose 1.7% last week to settle at $33.33 an ounce on Comex, though the July contract lost 1.5% Friday. Silver is down 3.7% this month after advancing 9.9% in March and retreating 2.4% in February. It gained 21% in 2024. The July contract is currently down $0.248 (-0.74%) an ounce to $33.080 and the DG spot price is $32.88
Spot palladium decreased 2.2% last week to $945.50 an ounce after falling 1.4% Friday. Palladium is down 5.1% this month after rising 7.3% in March and retreating 10% in February. Palladium dropped 17% last year. Currently, the DG spot price is up $19.30 an ounce to $964.00.
Spot platinum slipped 60 cents last week to $975.90 an ounce, after losing 0.6% Friday. Platinum is down 3% this month after increasing 6.7% in March and sliding 4.7% in February. Platinum lost 8.4% in 2024. THE DG spot price is currently up $22.30 an ounce to $995.20.
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