Gold trading around record high early Wednesday ahead of U.S. President Donald Trump’s announcement of a new round of tariffs that are set to take effect and investors sought haven assets.
The yellow metal posted its best quarter since 1986 in the three months ended in March amid concerns about the U.S. tariffs and their economic impact, plus inflation and geopolitical unrest. Trump has termed Wednesday as “Liberation Day” because of the tariffs he has promised to impose.
U.S. jobs grew in March with companies adding 155,000 jobs, a significant increase from February’s upwardly revised 84,000 and beating the forecast of 120,000, according to ADP. The Federal Reserve closely follows labor market and inflation data when setting monetary policy. The key U.S. monthly jobs report for March will follow on Friday, and the weekly initial jobless claims figures for last week come out in between, on Thursday.
June gold futures slipped 0.1% Tuesday to settle at $3,146.00 an ounce on Comex, though the most-active contract rallied 1% in the first two days of the week. Bullion gained 11% in March after rising 0.5% in February and adding 7.3% in January. It rallied more than $500, or 19%, in the first quarter. The metal rose 27% in 2024, its biggest annual gain since 2010. The June contract is currently up $11.60 (+0.37%) an ounce to $3157.60 and the DG spot price is $3126.40.
Trump is scheduled to announce the latest tariffs at 4 p.m. in Washington, and they will go into effect “immediately,” White House press secretary Karoline Leavitt said Tuesday at a press briefing. Details of what they will entail are vague, but they’re expected to be the administration’s most aggressive levies yet.
Markets have been jittery ahead of the announcement amid fears that the tariffs and any retaliatory action from other nations would harm the U.S. economy. That might have an impact on inflation and the Fed’s expected upcoming interest rate cuts.
The Fed’s favorite inflation measure, the personal consumption expenditures price index, came in higher than expected for February in data released at the end of last week.
About 84.1% of investors tracked by the CME FedWatch Tool expect rates to remain unchanged at Fed policymakers’ next meeting in May, compared with 15.9% 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% in March. 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 lost 0.9% Tuesday to settle at $34.31 an ounce on Comex, and the May contract decreased 1.5% in the first two days of the week. Silver advanced 9.9% in March after retreating 2.4% in February and adding 10% in January. It gained 21% in 2024. The May contract is currently up $0.276 (+0.80%) an ounce to $34.585 and the DG spot price is $33.83.
Spot palladium added 50 cents Tuesday to $997.00 an ounce and rose 1.3% so far this week. Palladium gained 7.3% last month after retreating 10% in February and advancing 11% in January. Palladium dropped 17% last year. Currently, the DG spot price is down $12.80 an ounce to $983.00.
Spot platinum fell 1.4% Tuesday to $992.30 an ounce, though it rose 0.5% in the first two days of the week. Platinum increased 6.7% 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 $12.90 an ounce to $976.70.
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