Gold ticked up in early Friday trading on a softer dollar, but its still poised for a fourth weekly decline amid mounting bets of tighter U.S. monetary policy that may dampen demand for the precious metal.
The Federal Reserve is seen as increasingly likely to raise interest rates this year to combat inflation. The Fed’s favorite inflation measure, the personal consumption expenditures price index, in May hit the highest level since October 2023 when volatile food and energy prices are excluded, according to data released Thursday. Consumer sentiment data comes out Friday.
The report adds to forecasts that even if the U.S.-Iran peace accord goes through and the Strait of Hormuz fully reopens for oil tanker traffic, persistently high costs of goods may remain a problem. Investors continued to watch the status of the talks, however.
August gold futures rose 1% Thursday to settle at $4,047.60 an ounce on Comex, though the front-month contract declined 4.7% in the first four days of the week. Bullion is down 12% this month after dropping 0.8% in May and losing 1% in April. It rallied 64% last year. The August contract is currently up $21.60 (+0.53%) an ounce to $4069.20 and the DG spot price is $4050.90.
Core PCE for May rose 3.4% from a year earlier and gained 0.3% month on month, both in line with economists’ estimates. Including food and energy prices, PCE inflation showed an annual rate of 4.1%, the highest level since April 2023, and 0.4% on the month. The Fed has an annual inflation target of 2%.
Separately, revised first-quarter GDP data exceeded economists’ estimates to a seasonally adjusted annualized pace of 2.1%, beating the forecast of 1.7% and a prior reading of 1.6% This was the last of three readings on GDP.
The expectation of tighter monetary policy this year has comes as inflation climbed following the Iran war. At the start of the year, before the war, the central bank had been expected to loosen monetary policy. The Fed earlier this month held interest rates steady at 3.5% to 3.75%, as expected, but signaled growing support for a rate hike in 2026. Higher rates are typically bearish for gold, making it a less attractive investment than other assets.
Over 70% of the investors tracked by the CME FedWatch Tool are betting on interest rates staying unchanged in July, though over 62% see an increase as early as September. The Fed has kept interest rates unchanged this year after three previous rate cuts.
Front-month silver futures gained 0.5% Thursday to settle at $58.80 an ounce on Comex, though the September contract declined 12% in the first four days of the week. The most-active contract touched a record above $115 in January. Silver is down 23% this month after gaining 2.5% in May and losing 1.2% in April. It rose 141% last year. The September contract is currently up $0.032 (+0.05%) an ounce to $58.830 and the DG spot price is $58.31.
Spot palladium increased 3.2% Thursday to $1,202.00 an ounce but is down 7% this week. Palladium is down 12% this month after dropping 12% in May and rising 3.2% in April. Palladium rose 74% last year. Currently, the DG spot price is up $12.80 an ounce to $1210.00.
Spot platinum advanced 2.2% Thursday to $1,613.70 an ounce, but is down 5.8% this week. Platinum is down 16% in June after dropping 3.2% in May and gaining 1.3% in April. Platinum increased 122% in 2025. The DG spot price is currently up $7.40 an ounce to $1620.00.
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