Gold sticks near record high early Wednesday despite dipping as investors took profits from record prices and speculated on the prospect of a peace deal between Russia and Ukraine.
The yellow metal, a traditional hedge against geopolitical and economic uncertainty, would probably come under pressure if U.S. President Donald Trump and Russian President Vladimir Putin reach an accord that ends the conflict, but Ukraine and other powers have indicated that they won’t accept an agreement that doesn’t include Ukraine at the negotiating table.
Investors were also awaiting Wednesday’s release of the minutes of the last Federal Reserve policy meeting to gauge the thinking on interest rate cuts this year. High interest rates are considered bearish for gold, while low rates and rate cuts are bullish.
April gold futures increased 1.7% Tuesday to settle at $2,949.00 an ounce on Comex. Trading since last week posted Tuesday because the U.S. Presidents Day holiday on Monday shuttered financial markets and the government. The yellow metal rose 0.5% last week. Bullion increased 7.3% last month after dropping 1.5% in December and losing 2.5% in November. The metal gained 27% in 2024, its biggest annual gain since 2010. The April contract is currently up $4.70 (+0.16%) an ounce to $2953.70 and the DG spot price is $2935.80.
Gold has advanced on haven demand over the past month since Trump announced new tariffs against some of the country’s trading partners and because of his stated policies on immigration, trade, the Middle East.
Talks between the Trump administration and Russian counterparts began this week in Saudi Arabia. Trump accused Ukraine of starting the war – which began when Russia invaded Ukraine in 2022 and rebuffed its attempts to join the talks.
Separately, investors will be looking to the minutes of the January Fed policy meeting to determine whether the central bank is likely to continue to cut interest rates, as it did three times in 2024.
Most investors aren’t pricing in a Fed rate reduction until July, according to investors tracked by the CME FedWatch Tool, though Fed policymakers had been widely expected to continue a series of interest rate cuts that began last year into 2025. About 97.5% expect rates to remain unchanged in March, compared with 2.5% anticipating a 25 basis point cut.
The Fed kept its benchmark interest rate at 4.25% to 4.50% last month. It was the central bank’s first policy meeting since July 2024 without a rate cut after three reductions last year. Previously, the Fed had kept rates at 5.25% to 5.50% for a year after raising them by 5.25 percentage points since March 2022 to combat inflation.
Front-month silver futures gained 1.6% Tuesday to settle at $33.37 an ounce on Comex. The most-active March contract rose 1.3% last week. Silver added 10% last month after dropping 6% in December and falling 5.1% in November. It gained 21% in 2024. The March contract is currently down $0.278 (-0.83%) an ounce to $33.095 and the DG spot price is $32.73.
Spot palladium edged up 0.3% Tuesday to $995.50 an ounce after rallying 0.7% last week. Palladium advanced 11% last month after falling 6.7% in December and sliding 12% in November. Palladium dropped 17% last year. Currently, the DG spot price is down $14.50 an ounce to $986.00.
Spot platinum increased 0.3% Tuesday to $993.70 an ounce after advancing 0.3% last week. The DG spot price is currently down $15.30 an ounce to $978.80.
Platinum gained 8.4% in January after losing 4.6% in December and declining 4.2% in November. Platinum slid 8.4% in 2024.
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