Gold recovered from an early Friday dip to hold steady near $4700 as investors eye Middle East developments. Inflation fears stemming from the war in Iran have pushed the expected timeline of any Federal Reserve interest rate cut even further out.
Investors will be closely watching next week’s Fed policy meeting for the central bank’s guidance on the economy. The next key inflation report, the personal consumption expenditures price index, comes out on Thursday, the day after the next scheduled Fed interest rate announcement. The PCE release will include March figures, which means it will be the first report including a full month of data since the war began.
Higher interest rates are typically bearish for gold, making the yellow metal a less attractive alternate investment than other assets.
June gold futures slid 0.6% Thursday to $4,724.00 an ounce on Comex, and the most-active contract dropped 3.2% in the first four days of the week. Bullion slid 11% in March after climbing 11% in February and rising 9.3% in January. It rallied 64% last year. The June contract is currently up $1.70 (+0.04%) an ounce to $4725.70 and the DG spot price is $4711.20.
Gold has declined on hawkish news since the war began as oil and the dollar have strengthened. A stronger dollar makes gold a more expensive for holders of other currencies.
In the latest escalation, U.S. President Donald Trump on Thursday ordered the U.S. military to “shoot and kill” Iranian small boats deploying mines in the Strait of Hormuz, through which about a fifth of the oil consumed around the world each day typically passes. Attempts at peace talks collapsed earlier this week.
The Iran war has erased expectations that the Fed would cut interest rates this year. Most investors tracked by the CME FedWatch Tool now expect the central bank to keep U.S. interest rates unchanged until the end of next year. Almost all the investors tracked by the tool are betting on rates staying unchanged at the next policy meeting next week.
Fed policymakers last month kept interest rates unchanged again at 3.50% to 3.75%. The Fed has kept interest rates unchanged this year after three previous rate cuts. 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 in 2024.
Front-month silver futures fell 3.1% Thursday to settle at $76.06 an ounce on Comex, and the July contract decreased 7.7% in the first four days of the week. The most-active contract touched a record above $115 in January. Silver dropped 20% last month after gaining 19% in February and advancing 11% in January. It rose 141% last year. The July contract is currently up $0.100 (+0.13%) an ounce to $76.160 and the DG spot price is $75.59.
Spot palladium declined 5.4% Thursday to $1,483.00 an ounce and has retreated 6.3% so far this week. Palladium tumbled 17% in March after gaining 8.8% in February and advancing 2.4% in January. Palladium rose 74% last year. The DG spot price is currently up $6.90 an ounce to $1504.50.
Spot platinum lost 3.7% Thursday to $2,016.60 an ounce and is down 5% so far this week. It declined 17% in March after advancing 15% in February and gaining 1.4% in January. Platinum increased 122% in 2025. The current DG spot price is down $19.20 an ounce to $2019.20.
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