Gold steady above $3300 an ounce in Monday morning trading supported by a weaker dollar as the U.S. and China were poised to resume trade talks over rare-earth metals and advanced technologies, and amid a standoff in Los Angeles over immigration.
The trade talks, set to take place in London, follow a call last week between U.S. President Donald Trump and Chinese President Xi Jingping. Easing of trade ties lessens haven demand for precious metals. Prices of the precious metal remained elevated, however, after Trump ordered the National Guard into Los Angeles – against the objections of California’s governor – following unrest that followed protests against immigration raids late last week. Gold is a traditional hedge against economic and geopolitical uncertainty.
August gold futures rose 0.9% last week to settle at $3,346.60 an ounce on Comex, though the front-month contract lost 0.8% Friday. Bullion slipped 0.1% last 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 $37.20 (-1.10%) an ounce to $3337.90 and the DG spot price is $3316.50.
Silver reached 13-year highs last week, and platinum rose to the highest level since early 2022 last week amid investor demand for the metals used in key industries. Silver is a key component of solar panels while platinum is used in catalytic converters in combustion engines and in laboratory equipment.
Investors have been jittery in recent weeks amid uncertainty around Trump’s trade and tariff policies and their effect on the economy as well as the potential additions to the deficit from the Republican tax bill currently in Congress, which triggered the new animosity between Trump and Elon Musk last week.
The Federal Reserve closely watches inflation and the labor market in determining monetary policy. A key inflation report, the consumer price index for May, comes out Wednesday and may provide further direction. The producer price index comes out Thursday, with consumer sentiment data scheduled for release Friday.
The key U.S. monthly jobs for May showed a larger-than-expected increase in data released Friday, signaling that the labor market remains robust. Nonfarm payrolls gained 139,000 last month, beating expectations of 125,000. The report came days after the private payrolls report from ADP came in at the lowest level in two years.
Last month, the Fed left interest rates unchanged again at 4.25% to 4.50%. Most investors tracked by the CME FedWatch Tool 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 rallied 9.4% last week to settle at $36.14 an ounce on Comex after the July contract climbed 0.9% Friday. Silver added 0.6% in May after dropping 5.2% in April and advancing 9.9% in March. It gained 21% in 2024. The July contract is currently up $0.325 (+0.91%) an ounce to $36.130 and the DG spot price is $36.35.
Spot palladium rose 9.1% last week to $1,063.00 an ounce after gaining 5.1% Friday. Palladium advanced 2.8% last month after falling 4.9% in April and rising 7.3% in March. Palladium dropped 17% last year. Currently, the DG spot price is up $27.50 an ounce to $1086.00.
Spot platinum rose 11% last week to $1,172.10 an ounce after advancing 2.7% Friday. It surged 8.6% in May after retreating 3.1% in April and increasing 6.7% in March. Platinum lost 8.4% in 2024. The DG spot price is currently up $38.50 an ounce to $1203.50.
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