Gold slips early Friday amid increasing sentiment that the Federal Reserve may leave interest rates unchanged next month, though a softer dollar has the yellow metal headed for a weekly gain. While spot gold dropped 3.1% as of 09:02 a.m. ET, it’s still up 1.4% this week.
With the end of the U.S. government shutdown, investors are awaiting economic data that had been halted while the federal government was closed for indications on the Fed’s next moves on monetary policy. Lower interest rates are typically bullish for gold, making the yellow metal a more attractive investment.
The presidents of the Federal Reserve banks of Boston and Atlanta said Wednesday that they would oppose another interest rate cut at the central bank’s next policy meeting in December. The officials, Boston’s Susan Collins and Atlanta’s Raphael Bostic, cited elevated inflation and a lack of economic data due to the government shutdown. White House spokeswoman Karoline Leavitt has said that the jobs and inflation reports for October will likely never be released. Bostic on Thursday said he would retire at the end of his term, which runs through February.
December gold futures slipped 0.5% Thursday to settle at $4,194.50 an ounce on Comex, though the front-month contract gained 4.6% in the first four days of the week. Bullion increased 3.2% last month after surging 10% in September, the most in six months, and adding 5% in August. It’s up 59% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The December contract is currently down $123.9 (-2.95%) an ounce to $4070.60 and the DG spot price is $4071.90.
The uncertainty around the government shutdown helped buoy gold to a series of record highs in recent weeks. The yellow metal is a traditional hedge against uncertainty.
Last month, the Fed reduced interest rates to 3.75% to 4.00%. Just over half of the investors tracked by the CME FedWatch Tool are betting that the Fed will reduce rates by another 25 basis points in December. The rest anticipate that the Fed will leave rates unchanged. The cut last month was the second 25-basis point reduction in a row. 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.
Minneapolis Fed President Neel Kashkari, who isn’t currently a voting member of the Fed’s policy committee, told Bloomberg Thursday that he didn’t support the October rate cut and is undecided about December.
Front-month silver futures slid 0.5% Thursday to settle at $53.17 an ounce on Comex, though the December contract gained 10% so far this week. Silver rose 3.3% in October after adding 15% in September, the biggest monthly rally in two and a half years, and climbing 11% in August. It rose 21% in 2024. The December contract is currently down $2.735 (-5.14%) an ounce to $50.435 and the DG spot price is $50.83.
Spot palladium decreased 1.9% Thursday to $1,456.00 an ounce but is up 3.3% so far this week. Palladium rose 14% last month after rising 14% in September and declining 7.8% in August. Palladium dropped 17% last year. The DG spot price is currently down $70.70 an ounce to $1402.50.
Spot platinum decreased 2% Thursday to $1,594.10 an ounce but gained 3% in the first four days of the week. It advanced 1% in October after gaining 15% in September and rising 5.9% in August. Platinum lost 8.4% in 2024. The current DG spot price is down $52.60 an ounce to $1563.30.
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