Gold steady, but early Friday appears poised for a weekly loss amid fears that inflation will keep interest rates elevated for some time driven by oil prices.
Some key economic reports out Thursday added to concerns that higher oil prices from the war in Iran are starting to be felt. While the Federal Reserve’s favorite inflation measure, the personal consumption expenditures price index for March, came in in line with estimates, GDP grew at a slower-than-expected pace in the first quarter.
The Fed on Wednesday held interest rates steady at 3.5% to 3.75%, as expected, but policymakers were unusually divided. Voting members of the Federal Open Market Committee were split 8-4 on the vote to hold rates unchanged, with the four dissenters expressing different reasons for their votes. One wanted a cut and the other three objected to a statement that further rate cuts might be in the pipeline. Higher interest rates are typically bearish for gold, making the yellow metal a less attractive alternate investment than other assets.
June gold futures rose 1.5% Thursday to $4,629.60 an ounce on Comex, and the most-active contract fell 2.4% in the first four days of the week. Bullion dropped 1% last month after sliding 11% in March and climbing 11% in February. It rallied 64% last year. The June contract is currently down $28.70 (-0.62%) an ounce to $4600.90 and the DG spot price is $4609.60.
In the latest on the Iran conflict, U.S. President Donald Trump suggested that negotiations with Tehran are advancing, despite public appearances of a standstill.
GDP for the first quarter – including the first month of the war – grew at a 2% seasonally adjusted annualized pace, lower than economists’ 2.2% average estimate but up from 0.5% in the fourth quarter of 2025.
March Core PCE, which excludes volatile food and energy prices, was 3.2% for the year, the highest level since November 2023. Including food and energy prices, the annual rate reached 3.5%. The March report was the first to include a full month of data since the war began. The Fed has a 2% annual inflation target.
About 92% of the investors tracked by the CME FedWatch Tool are betting on rates staying unchanged again in June. The Iran war has erased expectations that the Fed would cut interest rates this year. Most investors tracked by the tool now expect the central bank to keep U.S. interest rates unchanged until the latter half of next year.
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 gained 2.7% Thursday to settle at $74.03 an ounce on Comex, and the July contract decreased 3.8% in the first four days of the week. The most-active contract touched a record above $115 in January. Silver lost 1.2% in April after dropping 20% in March and gaining 19% in February. It rose 141% last year. The July contract is currently up $1.282 (+1.73%) an ounce to $75.310 and the DG spot price is $75.50.
Spot palladium increased 4.9% Thursday to $1,544.00 an ounce, and has added 2.2% so far this week. Palladium rose 3.2% last month after tumbling 17% in March and gaining 8.8% in February. Palladium rose 74% last year. Currently, the DG spot price is up $7.70 an ounce to $1545.00.
Spot platinum rallied 5% Thursday to $1,992.50 an ounce but slid 1.8% in the first four days of the week. It gained 1.3% in April after declining 17% in March and advancing 15% in February. Platinum increased 122% in 2025. The DG spot price is currently up $10.10 an ounce to $2005.70.
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