Gold slips on a mild inflation report and on a social media post by President Trump attacking China.
Inflation ever-so-slightly ticked up in April as the tariffs put in place by President Trump earlier in the month had yet to impact consumer prices, per the Commerce Department’s report. The personal consumption expenditures price index, the Federal Reserve’s key inflation measure, increased just 0.1% for the month, putting the annual inflation rate at 2.1%, the lowest of 2025.
The yellow metal dropped further on this morning’s Truth Social post by President Trump, “So much for being Mr. NICE GUY!” The President said China had “totally violated its” preliminary trade agreement, and he implied he would take action.
Concern that U.S. President Donald Trump’s tariffs may be here to stay amid a legal battle over them in the courts are also keeping markets volatile. The uncertainty has kept a floor under gold prices, as has uncertainty about the economy. U.S. GDP shrank less than previously indicated in the first quarter, according to new government data out Thursday.
August gold futures rose 0.7% Thursday to settle at $3,343.90 an ounce on Comex, but the front-month contract is down 1.5% so far this week. Bullion is up 0.8% so far this month after increasing 5.4% in April and gaining 11% in March. It’s up 27% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The August contract is currently down $41.90 (-1.25%) an ounce to $3302.20 and the DG spot price is $3284.70.
The strength in the dollar early Friday made gold a less attractive investment to holders of other currencies.
On tariffs, a federal appeals court on Thursday paused a ruling the day before from the Court of International Trade that blocked Trump’s tariffs. But the White House immediately appealed the decision. It’s the latest wrinkle in a trade policy that has kept markets jittery since the president took office in January.
Meanwhile, data out Thursday showed that the economy shrank 0.2% in the first quarter on weaker consumer spending and a bigger impact from trade than initially reported. But the GDP figure – the second of three to be released by the Bureau of Economic Statistics – was better than the initially reported 0.3% decline.
Earlier this month, the central bank left interest rates unchanged again at 4.25% to 4.50%. Most investors tracked by the CME FedWatch Tool now expect the Fed to begin interest rate cuts in September, not the next two scheduled policy meetings in June and July. Lower interest rates are typically bullish for gold, making the yellow metal a more attractive alternate investment.
The Fed held rates at policymakers’ meetings this year after reducing them 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 gained 0.8% Thursday to settle at $33.42 an ounce on Comex. The July contract is down 0.6% so far this week and is up 1.8% this month. Silver dropped 5.2% in April month after advancing 9.9% in March. It gained 21% in 2024. The July contract is currently down $0.333 (-1.00%) an ounce to $33.090 and the DG spot price is $33.07.
Spot palladium added 0.6% Thursday to $978.50 an ounce. It slid 3.2% so far this week and is up 3.2% this month. Palladium fell 4.9% in April after rising 7.3% in March. Palladium dropped 17% last year. Currently, the DG spot price is down $14.10 an ounce to $967.50.
Spot platinum dropped 0.3% Thursday to $1,080.50 an ounce. It dropped 1.9% so far this week and is up 11% this month. Platinum retreated 3.1% in April after increasing 6.7% in March. Platinum lost 8.4% in 2024. The DG spot price is currently down $23.30 an ounce to $1060.10.
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