Gold flies to a new record high early Monday above $3,100 and was poised for its best quarter since 1986 and its best month since July 2020 amid escalating fears of a prolonged global trade war following U.S. and reciprocal tariffs set to go into effect this week.
DG spot gold hit a record $3,128.92 earlier in the trading day while U.S. gold futures were up 1.2% at $3,151.10. The yellow metal hit above $3,100 an ounce for the first time as haven investors sought a hedge against both economic and geopolitical risk. U.S. President Donald Trump last week pledged 25% duties on all auto imports and has also pledged reciprocal tariffs against countries who respond in kind. Trump also said over the weekend that he was “very angry” with Russian President Vladimir Putin over the war in Ukraine.
The newest round of U.S. tariffs is set to take effect Wednesday, a day Trump has called “Liberation Day.” He also threatened “secondary sanctions” on Russia if he and Putin were unable to reach an agreement on ending the war in Ukraine: If “a deal isn’t made, and if I think it was Russia’s fault, I’m going to put secondary sanctions on Russia” and Russian oil, Trump said in an interview with NBC News.
June gold futures rose 3.1% last week to settle at $3,114.30 an ounce on Comex, and the most-active contract rallied 0.8% Friday. Bullion is up 9.3% 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 June contract is currently up $24.80 (+0.80%) an ounce to $3139.10 and the DG spot price is $3117.00.
Banks including Goldman Sachs recently raised their forecasts for gold prices, with Goldman predicting the yellow metal will reach $3,300 by the end of the year, partially because of stronger central bank buying.
Investors will be awaiting the U.S. monthly jobs report on Friday for further indications on the state of the economy. The Federal Reserve’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.
Core PCE, which excludes volatile food and energy prices, increased 0.4% last month from the month earlier and 2.8% on an annual basis, both higher than expected. Economists had forecast 0.3% and 2.7%, respectively. The monthly gain was the largest since January 2024. Including food and energy prices, headline PCE rose 0.3% for the month and 2.5% year on year, both in line with forecasts.
The Fed closely watches both inflation and labor market data when setting monetary policy.
About 80.8% of investors tracked by the CME FedWatch Tool expect rates to remain unchanged at Fed policymakers’ next meeting in May, compared with 19.2% 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 gained 4% last week to settle at $34.81 an ounce on Comex, though the May contract decreased 0.8% Friday. Silver is up 11% this month after retreating 2.4% in February and adding 10% in January. It gained 21% in 2024. The May contract is currently down $0.494 (-1.42%) an ounce to $34.320 and the DG spot price is $33.94.
Spot palladium added 1.5% last week to $984.00 an ounce, though it slipped 0.1% Friday. Palladium is up 5.9% this month after retreating 10% in February and advancing 11% in January. Palladium dropped 17% last year. Currently, the DG spot price is up $12.70 an ounce to $997.50.
Spot platinum rose 0.5% last week to $987.20 an ounce, though it retreated 0.3% Friday. 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 up $17.70 an ounce to $997.40.
Written by Lindsay Hart for Dillon Gage
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