Gold slips under $3200 as the broader market remained jittery amid U.S. trade turmoil after President Donald Trump said Sunday that tariff exemptions for smartphones and computers announced Friday would just be temporary.
The back and forth raised questions about the reasoning behind the shifting policy. Declines in the U.S. dollar kept gold prices elevated as a weaker U.S. currency makes dollar-denominated gold more attractive to holders of other currencies. The dollar touched new lows for the year.
Meanwhile, Goldman Sachs raised its year-end gold price forecast to $3,700 an ounce from $3,330 as investors continued to seek the yellow metal as a haven asset.
June gold futures climbed 6.9% last week to settle at $3,244.60 an ounce on Comex, and the most-active contract increased 2.1% Friday. 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 in the three months ended in March, the best quarter since 1986. The metal rose 27% in 2024, its biggest annual gain since 2010. The June contract is currently down $26.80 (-0.83%) an ounce to $3217.80 and the DG spot price is $3207.20.
Minneapolis Federal Reserve Bank President Neel Kashkari on Sunday said that the central bank’s primary job is still to keep inflation under control. He noted last week that Trump’s trade policies risk a persistent rise in inflation, so his remarks were seen as undercutting the possibility that the Fed will cut rates to boost the economy. Many market observers are speculating that tariffs will trigger a global recession.
“The Fed’s job is to keep inflation under control and not let it get unanchored,” he said on CBS’s Face the Nation. “Tariffs push up prices and push down economic activity, and that’s a challenging situation because the Fed simply does not have the tools to undo the economic effects of tariffs in a trade war. We can just keep inflation from getting out of hand.”
Last week, the consumer price index fell to a six-month low in March, but observers are concerned that that may be the best it gets before the impact of the tariffs and government job cuts are felt.
Most investors tracked by the CME FedWatch Tool expect the Fed to begin interest rate cuts in June but keep them unchanged at the central bank’s next meeting in May. Lower interest rates are typically bullish for gold.
The Fed left rates unchanged at 4.25% to 4.50% in March. It 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 rallied 9.2% last week to settle at $31.91 an ounce on Comex after the May contract rallied 3.7% Friday. 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 down $0.055 (-0.17%) an ounce to $31.855 and the DG spot price is $31.97.
Spot palladium gained 0.4% last week to $923.00 an ounce after rising 0.2% Friday. 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 up $39.30 an ounce to $961.00.
Spot platinum rose 2.7% last week to $947.30 an ounce after adding 1.1% Friday. 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 up $9.50 an ounce to $955.10
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