Gold slips from record high territory but still on track for its strongest year since 1979 thanks to a 50% leap in price over 2025.
On Tuesday, both gold and silver posted their steepest selloffs in years on profit taking and as investors bet on a positive U.S. inflation report Friday. The dollar and Treasurys were mostly steady Wednesday. The recent record runup in the precious metals came mostly from haven investors attracted by geopolitical and economic uncertainty. Silver rallied last week on a short squeeze in London.
December gold futures fell 5.7% Tuesday to settle at $4,109.10 an ounce on Comex, and the front-month contract lost 2.5% in the first two days of the week. Bullion surged 10% in September, the most in six months, after adding 5% in August and gaining 1.2% in July. It’s up 56% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The December contract is currently down $23.50 (-0.57%) an ounce to $4085.60 and the DG spot price is $4080.70.
Beyond technical trades, investors were looking to Friday’s delayed U.S. inflation numbers for September for further direction, particularly in terms of what they may mean for monetary policy. The release of the closely watched consumer price index was postponed because of the U.S. government shutdown. It now comes out shortly before next week’s Federal Reserve policy meeting at which the central bank is overwhelmingly expected to cut interest rates again.
More than 96% of the investors tracked by the CME FedWatch Tool are betting that the Fed will reduce rates by 25 basis points next week, with the rest expecting the central bank to keep rates unchanged. 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 lowered interest rates by 25 basis points in September to 4.00% to 4.25%.
A Fed rate cut would be considered bullish for gold, which becomes a more attractive financial asset when rates decline. Other bullish factors include the U.S. government shutdown, which is in its 21st day, the ongoing trade standoff between the U.S. and China, and U.S. regional credit concerns.
Front-month silver futures plummeted 7.2% Tuesday to settle at $47.70 an ounce on Comex, and the December contract tumbled 4.8% in the first two days of the week. Silver rose 15% last month, the biggest monthly rally in two and a half years, after climbing 11% in August and gaining 1.5% in July. It rose 21% in 2024. The December contract is back up $0.441 (+0.92%) an ounce to $48.145 and the DG spot price is $48.68.
Spot palladium retreated 5.5% Tuesday to $1,434.00 an ounce, and it’s down 4% so far this week. Palladium rose 14% in September after declining 7.8% in August and climbing 8.8% in July. Palladium dropped 17% last year. Currently, the DG spot price is up $25.30 an ounce to $1455.00.
Spot platinum decreased 6.6% Tuesday to $1,543.10 an ounce and is down 4.7% so far this week. It increased 15% in September after rising 5.9% in August and dropping 3.9% in July. Platinum lost 8.4% in 2024. The DG spot price is currently up $27.90 an ounce to $1566.20.
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