Gold ticks up in early Friday trading following Thursday’s plunge on inflation fears triggered by the ongoing war in Iran reduced expectations that the Federal Reserve will cut interest rates multiple times this year. Gold and silver are both headed for a down week, with the yellow metal on course to close down 9% and silver down more than 10% for the week.
Fed policymakers on Wednesday kept interest rates unchanged again at 3.50% to 3.75%, and the policy statement after the meeting and Chairman Jerome Powell’s comments indicated that the central bank would likely only cut rates once this year. But Powell said policymakers are closely watching inflation and the economic effects of the conflict, with inflation elevated even before the war sent oil and gasoline prices soaring.
April gold futures tumbled 5.9% Thursday to settle at $4,605.70 an ounce on Comex and is down 9% this week. Futures settled below $5,000 both Wednesday and Thursday, the first time the contract has closed below that threshold since Feb. 19. Bullion surged 11% in February after climbing 9.3% in January and rising 2% in December. It rallied 64% last year. The April contract is currently down $49.00 (+1.06%) an ounce to $4654.70 and the DG spot price is $4625.30.
Precious metals prices have dropped as the dollar has strengthened since the Iran war and as traders have sold metals to cover other positions. Oil prices have soared amid the ongoing shutdown of the Strait of Hormuz, which is reducing global exports by about a fifth, and adding to inflation fears.
The U.S. and Israel tried to calm market fears Thursday, and Israeli Prime Minister Benjamin Netanyahu said Israel won’t target energy infrastructure anymore after U.S. President Donald Trump rebuked the nation for targeting Iran’s massive South Pars gas field on Wednesday that triggered Iranian reprisals against Gulf Arab countries’ energy facilities.
Currently, no investors tracked by the CME FedWatch Tool expect the Fed to cut interest rates before the second half of 2026, and only half see a rate change this year. While almost 93% of investors tracked by the tool are betting on rates staying unchanged at the next policy meeting in April, the rest are now betting on a rate increase.
The Fed kept interest rates unchanged in January after three previous rate cuts. The Fed reduced interest rates for a third consecutive time in December to 3.50% to 3.75%. 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.
Powell didn’t address the economic impact of the war directly in his post-meeting remarks Wednesday beyond saying the conflict was causing uncertainty. He’s scheduled to deliver brief remarks Saturday at a conference.
Front-month silver futures declined 8.2% Thursday to settle at $71.22 an ounce on Comex, the lowest level since Jan. 2. The May contract retreated 12% in the first four days of the week. The most-active contract touched a record above $115 in January. Silver gained 19% last month after advancing 11% in January and climbing 24% in December. It rose 141% last year. The May contract is currently down $0.505 (+0.71%) an ounce to $71.720 and the DG spot price is $70.69.
Spot palladium decreased 5.2% Thursday to $1,460.50 an ounce and is down 8% this week. Palladium gained 8.8% in February after advancing 2.4% in January and increasing 11% in December. Palladium gained 74% last year. The current DG spot price is down $8.80 an ounce to $1458.00.
Spot platinum fell 5.1% Thursday to $1,964.30 an ounce and is down 4.8% this week. It advanced 15% last month after gaining 1.4% in January and surging 22% in December. Platinum increased 122% in 2025. The DG spot price is up $36.20 an ounce to $1999.70.
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