Gold steady ahead of this Wednesday’s Fed decision, tipping up briefly on a slight dip in the dollar and bond yields as investors awaited this week’s meeting of Federal Reserve policymakers and a much-anticipated report on inflation.
The yellow metal posted its first weekly rally in six weeks last week after the dollar slipped from 20-year highs amid speculation that aggressive monetary policy will curb rampant inflation. The Fed is expected to boost interest rates by another 75 basis points Wednesday after a similar move in June. Meanwhile, the European Central Bank announced its first interest-rate increase since 2011 last week.
Front-month gold futures, which rolled to December from August last week, rose 2.5% for the week to $1,745.30 an ounce on Comex. The December contract gained 0.8% Friday. Bullion fell 2.2% in June after tumbling 3.3% in May, its worst month since September. The metal retreated 3.5% in 2021. The December contract is currently down $6.10 (-0.35%) an ounce to $1739.20 and the DG spot price is $1722.50.
Lower Treasury yields and a slightly weaker dollar stemmed losses at the open Monday.
Fears of an economic recession and uncertainty over the pandemic and the war in Ukraine have kept a floor under gold prices. Recession speculation grew earlier this month after data showed the U.S. consumer price index rose 9.1% in June. In addition to the Fed interest rate decision, the central bank’s favorite inflation measure, the personal consumption expenditures index, is set for release Friday.
Treasury Secretary Janet Yellen, a former Fed chair, said Sunday that she doesn’t see any sign that the U.S. economy is in a broad recession. She expressed confidence in the Fed’s measures to stem rising inflation in remarks on NBC’s “Meet the Press” program.
In economic reports last week, U.S. weekly initial jobless claims hit the highest level since mid-November, and the leading economic index published by the Conference Board fell 0.8% in June. Both were more than economists had forecast.
September silver futures gained 0.1% last week to settle at $18.62 an ounce on Comex, though the front-month contract retreated 0.5% Friday. Silver declined 6.2% in June after falling 6.1% in May. It retreated 12% in 2021. Silver prices are tied to industrial demand. The September contract is currently down $0.262 (-1.41%) an ounce to $18.355 and the DG spot price is $18.44.
Spot palladium fell 7.7% last week to $1,729.70 an ounce after dropping 9.6% Friday. It lost 2.9% in June after losing 14% in May, the biggest monthly decline since September. It retreated 22% in 2021. Currently, the DG spot price is down $8.30 an ounce to $2045.50.
Spot platinum increased 3.4% last week to $887.90 an ounce after gaining 0.2% Friday. It lost 7.2% in June after gaining 2.3% in May and losing 9.4% last year. The current DG spot price is slightly up, $0.10 an ounce, to $888.30.
Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.