Gold steady near record levels early Monday on haven demand from investors seeking protection against geopolitical and economic risk even as they awaited the release of a key inflation report for further direction.
Gold has attracted risk-off investors in recent weeks amid concerns about U.S. President Donald Trump’s tariff policy and fears of a possible recession, which could also affect the Federal Reserve’s next monetary policy decisions. The personal consumption expenditures price index, the Fed’s favorite inflation report, comes out at the end of the week. The Fed closely watches both inflation and labor market data when setting monetary policy.
Gold rose above $3,000 an ounce for the first time ever earlier this month and posted its third weekly gain last week. In addition to the economic uncertainty, investors are seeking a hedge against geopolitical developments, including the wars in Ukraine and Gaza.
April gold futures rose 0.7% last week to settle at $3,021.40 an ounce on Comex, though the most-active contract slipped 0.7% Friday. Bullion is up 6.1% in March after rising 0.5% last month and gaining 7.3% in January. The metal rose 27% in 2024, its biggest annual gain since 2010. The April contract is currently up $8.60 (+0.28%) an ounce to $3030.00 and the DG spot price is $3022.80.
In addition to the inflation report this week, consumer confidence and home sales data are due Tuesday, followed by durable good orders Wednesday and fourth-quarter GDP and weekly initial jobless claims Thursday.
About 87.1% of investors tracked by the CME FedWatch Tool expect rates to remain unchanged at Fed policymakers’ next meeting in May, compared with 12.9% anticipating a 25 basis point cut. The Fed began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts last year. Previously, the Fed had kept rates at 5.25% to 5.50% for a year.
The Fed left rates unchanged at 4.25% to 4.50% last week. It reduced rates three times in 2024, but most investors aren’t pricing in another Fed rate reduction until June. Rate cuts are typically considered bullish for gold because they make the precious metal a more attractive alternate investment.
Front-month silver futures fell 2.8% last week to settle at $33.49 an ounce on Comex, and the May contract slid 1.5% Friday. Silver is up 6.3% this month after retreating 2.4% in February and adding 10% in January. It gained 21% in 2024. The May contract is currently up $0.244 (+0.73%) an ounce to $33.730 and the DG spot price is $33.15.
Spot palladium lost 0.3% last week to $969.50 an ounce, though it rose 1% Friday. Palladium is up 4.4% this month after retreating 10% in February and advancing 11% in January. Palladium dropped 17% last year. Currently, the DG spot price is down $3.20 an ounce to $964.00
Spot platinum fell 2% last week to $982.10 an ounce, after decreasing 0.5% Friday. Platinum is up 4.1% in March after sliding 4.7% in February and gaining 8.4% in January. Platinum lost 8.4% in 2024. The DG spot price is currently down $7.90 an ounce to $977.50.
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