Gold falls on strengthening dollar, but the yellow metals still aims for third weekly gain y on haven demand amid ongoing concerns about the economic impact of a trade war stemming from U.S. President Donald Trump’s tariff policy.
Prices settled above the $3,000 threshold every day this week. The Trump administration had pledged a new round of tariffs to begin April 2, but there’s uncertainty around what it will entail. Risk-off investors were also turning to gold amid geopolitical unrest, particularly the wars in Ukraine and Gaza.
April gold futures rose $2.60 Thursday to settle at $3,043.80 an ounce on Comex, and the most-active contract rallied 1.4% in the first four days of the week. Bullion is up 6.9% in March after rising 0.5% last month and gaining 7.3% in January. The metal rose 27% in 2024, its biggest annual gain since 2010. The April contract is currently down $22.40 (-0.74%) an ounce to $3021.40 and the DG spot price is $3010.90.
Citibank on Thursday raised its price target for gold over the next three months to $3,200 an ounce from $3,000, citing robust demand. Its “bull case” called for $3,500 gold by the end of the year on concern about the U.S. economy.
Federal Reserve Chairman Jerome Powell said Wednesday that tariffs could delay the central bank’s progress in lowering inflation, something that high interest rates were designed to combat. The Fed left rates unchanged at 4.25% to 4.50% Wednesday. 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.
About 82.4% of investors tracked by the CME FedWatch Tool expect rates to remain unchanged at Fed policymakers’ next meeting in May, compared with 17.6% anticipating a 25 basis point cut. The Fed began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of 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 has indicated that it closely watches both inflation and the labor market when setting monetary policy. Data out Thursday showed that new U.S. applications for unemployment benefits held at a low level last week, with initial jobless claims increasing just 2,000 to 223,000, in line with estimates. The Fed’s favorite inflation report, the personal consumption expenditures price index, comes out at the end of next week.
Front-month silver futures fell 0.6% Thursday to settle at $33.99 an ounce on Comex, and the May contract was down 1.3% in the first four days of the week. Silver is up 7.9% this month after retreating 2.4% in February and adding 10% in January. It gained 21% in 2024. The May contract is currently down $0.426 (-1.25%) an ounce to $33.565 and the DG spot price is $32.96.
Spot palladium lost 0.7% Thursday to $959.50 an ounce and is down 1.3% so far this week. Palladium is up 3.3% this month after retreating 10% in February and advancing 11% in January. Palladium dropped 17% last year. The current DG spot price is up $7.30 an ounce to $967.00.
Spot platinum fell 1.5% Thursday to $987.00 an ounce, and it decreased 1.5% so far this week. Platinum is up 4.6% 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 $11.90 an ounce to $984.80.
Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or a recommendation regarding any particular security, commodity, or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities, or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand, and accept this disclaimer.
