Gold steady after last week’s record high

Gold steady after last week's record high

Gold steady early Monday after hitting last week’s record high on Friday. Investors now await the latest inflation data for further signals on the timeline of U.S. interest rate cuts.

The U.S. consumer price index is scheduled for release Tuesday with March data. The Federal Reserve closely tracks both labor market and inflation data when determining monetary policy. The monthly U.S. jobs report came in Friday and showed the country added a greater-than-expected 275,000 jobs in February, though the unemployment rate went up. 

Gold rallied on the jobs report, reaching a fresh record high. The strong labor market added to speculation that the Fed will cut interest rates soon. Lower interest rates are considered bullish for the yellow metal, making it a more attractive asset for investors. The market is currently pricing in a June start to rate cuts. 

Front-month gold futures rose 4.3% last week to settle at $2,185.50 an ounce on Comex after the most-active April contract gained 0.9% Friday. Bullion dropped 0.6% in February after declining 0.2% in January and gaining 0.7% in December. The metal rose 13% in 2023. The April contract is currently down $1.30 (-0.06%) an ounce to $2184.20 and the DG spot price is $2180.50.

Comex gold speculators boosted their net long positions by 63,018 contracts in the week ended March 5 to 131,060, according to the Commitments of Traders report released Friday by the U.S. Commodity Futures Trading Commission. 

Geopolitical unrest, particularly the wars in Ukraine and Gaza, have bolstered haven demand for the precious metal in recent months, and central banks in places like China are adding to their holdings. But high prices are also dampening consumer demand in places like Dubai

About 97% of the investors tracked by the CME FedWatch Tool are betting that the Fed will keep rates unchanged this month, while 3% expect a 25 basis point cut. Most investors tracked by the tool also anticipate the Fed will hold rates steady at the following policy meeting in May. Most are now looking to June for a rate cut. 

The central bank has raised interest rates by 5.25 percentage points since March 2022 in an effort to cut inflation, but kept rates unchanged at 5.25% to 5.50% at its last meeting. 

Front-month silver futures rose 5.1% last week to settle at $24.55 an ounce on Comex, though the May contract slipped 0.1% Friday. Silver lost 1.2% in February after falling 3.8% in January and dropping 6.1% in December. It ticked up 0.2% in 2023. The May contract is currently up $0.066 (+0.27%) an ounce to $24.615 and the DG spot price is $24.48.

Spot palladium increased 6.2% last week to $1,027.00 an ounce but dropped 2.4% Friday. Palladium fell 4.6% in February after tumbling 11% in January and advancing 8.6% in December. Palladium plummeted 38% last year. Currently, the DG spot price is up $19.20 an ounce to $1048.50.

Spot platinum advanced 2.9% last week to $916.30 an ounce but retreated 1% Friday. Platinum decreased 4.9% in February after falling 8% in January and rising 8.1% in December. Platinum dropped 6.8% in 2023. The DG spot price is currently up $21.40 an ounce to $938.20.

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