Gold sticks near $3400 ahead of this afternoon’s Fed meeting, while slipping early Wednesday on optimism about a possible U.S.-China trade deal ahead of a meeting of officials from the two countries being held over the weekend in Switzerland.
Investors awaited the Federal Reserve’s assessment of the state of the economy and the likelihood of future actions on monetary policy later in the day. The central bank is widely forecast to hold interest rates unchanged Wednesday, but comments from Chairman Jerome Powell and the statement issued by the Federal Open Market Committee at the end of this week’s two-day policy meeting may drive markets.
June gold futures rallied 3% Tuesday to settle at $3,422.80 an ounce on Comex, and the front-month is up 5.5% in the first two days of the week. Bullion increased 5.4% in April after gaining 11% in March and adding 0.5% in February. It’s up 30% so far this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The June contract is currently down $18.30 (-0.53%) an ounce to $3404.50 and the DG spot price is $3395.90.
U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are set to meet with their Chinese counterparts in Geneva over the weekend, potentially a first step toward resolving the trade issues between the two countries. U.S. President Donald Trump last month raised tariffs on Chinese imports to 145% and China retaliated. News of the meeting caused the broader market to rally, making gold less attractive as an alternate, risk-off investment.
Investors are expected to turn their attention to the Fed in the afternoon, with its scheduled monetary policy announcement. While the central bank has been widely expected to continue interest rate cuts this year, it’s expected to leave rates unchanged again at 4.25% to 4.50%.
Most investors tracked by the CME FedWatch Tool now expect the Fed to begin interest rate cuts in July, not the next one in June. Lower interest rates are typically bullish for gold.
The central bank has said it closely watches both labor market and inflation data when setting monetary policy. Both Powell and the FOMC statement are likely to mention policymakers’ readings on these indicators as well as the state of the overall economy and any headwinds from tariff and other policies.
The Fed left rates unchanged at policymakers’ last meeting in March but reduced rates three times in 2024. 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 last year. Previously, the Fed had kept rates at 5.25% to 5.50% for a year.
Front-month silver futures rose 2.8% Tuesday to settle at $33.38 an ounce on Comex, and the July contract is up 3.5% so far this week. Silver dropped 5.2% last month after advancing 9.9% in March and retreating 2.4% in February. It gained 21% in 2024. The July contract is currently down $0.386 (-1.16%) an ounce to $32.995 and the DG spot price is $32.84.
Spot palladium gained 4.6% Tuesday to $988.00 an ounce and is up 3.4% so far this week. Palladium fell 4.9% last month after rising 7.3% in March and retreating 10% in February. Palladium dropped 17% last year. Currently, the DG spot price is up $6.20 an ounce to $990.50.
Spot platinum increased 3.2% Tuesday to $996.20 an ounce and is up 2.7% in the first two days of the week. Platinum retreated 3.1% in April after increasing 6.7% in March and sliding 4.7% in February. Platinum lost 8.4% in 2024. The DG spot price is currently down $2.40 an ounce to $992.70.
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