Gold steady above $2000 ahead of key data early Wednesday amid recessionary fears as investors awaited a key inflation report on Friday, the last before the Federal Reserve’s next monetary policy decision. The yellow boosting slightly on ebbing dollar this morning.
The Fed’s favorite inflation measure, the personal consumption expenditures price index, is due out with March data on Friday. Then Fed policymakers meet next week, when they are widely expected to announce another 25 basis point interest rate increase.
Market speculation is growing that the Fed may halt rate hikes after the May meeting, given a series of negative economic reports. In the latest, on Tuesday, U.S. consumer confidence fell to a nine-month low in April. Higher interest rates are typically bearish for gold, because they make the yellow metal less attractive as an alternate investment, but a pause or an end to the rate hikes would be bullish.
June gold futures rose 0.2% Tuesday to settle at $2,004.50 an ounce on Comex, as the front-month contract increased 0.7% in the first two days of the week. Bullion gained 8.1% last month after decreasing 5.6% in February, its worst performance since June 2021. Gold increased 8.8% in the first quarter. The metal fell $2.40 in 2022. The June contract is currently up $9.0 (+0.45%) an ounce to $2013.50 and the DG spot price is $2006.30.
The Conference Board’s U.S. consumer confidence index fell to 101.3 this month, the lowest reading since July 2022. It was at 104.0 in March, and economists had expected it to come in unchanged in April.
Data on durable goods orders and wholesale inventories for March are due on Wednesday, followed by first quarter GDP and the latest information on the housing and labor markets on Thursday.
About 72.7% of investors tracked by the CME FedWatch Tool are betting that the Fed will raise interest rates by 25 basis points at the central bank’s next policy meeting, while just 27.3% anticipate the central bank will leave rates unchanged. Fed policymakers have said they track both inflation and labor market statistics when determining monetary policy.
The Fed has raised rates by 25 basis points twice this year following rate hikes of 50 basis points in December and 75 basis points each in June, July, September and November. The federal funds rate is currently at 4.75% to 5.00%.
July silver futures dropped 1.7% Tuesday to settle at $25.09 an ounce on Comex, and the front-month contract retreated 0.8% in the first two days of the week. Silver increased 15% in March after retreating 12% in February. It edged up 0.5% in the first quarter. It rose 3% in 2022. The July contract is currently up $0.292 (+1.16%) an ounce to $25.380 and the DG spot price is $25.22
Spot palladium decreased 2.9% Tuesday to $1,501.50 an ounce. It’s down 7.5% so far this week. Palladium rose 3.7% in March after plummeting 14% in February. It fell 17% last quarter. Palladium lost 5.7% in 2022. The current DG spot price is up $15.60 an ounce to $1521.50.
Spot platinum gained 0.4% Tuesday to $1,096.90 an ounce, though it’s down 3.2% so far this week. Platinum increased 3.7% last month after falling 5.9% in February. It dropped 6.6% in the first quarter. Platinum surged 10% in 2022. Currently, the DG spot price is up $13.20 an ounce to $1104.40.
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