Gold heads for seventh consecutive weekly gain on haven demand after U.S. President Donald Trump announced new tariffs against some of the country’s trading partners.
Uncertainty about the tariffs and what they might do to the global economy sent the yellow metal to a new record high this week. Seven consecutive weeks would be the longest stretch of weekly rallies since August 2020.
Trump said the tariffs were “reciprocal” to match the tax rate that other countries charge on imports. Trump’s 25% tariffs on steel and aluminum imports into the country went into effect Monday. Risk-off investors have been spurring demand for gold in recent weeks in part because of Trump’s policies on trade, immigration and the Middle East.
April gold futures rose 0.6% Thursday to settle at $2,945.40 an ounce on Comex, and the most-active contract advanced 2% in the first four days of the week. Bullion increased 7.3% last month after dropping 1.5% in December and losing 2.5% in November. The metal gained 27% in 2024, its biggest annual gain since 2010. Currently, the April contract is slightly down, $1.40 (-0.05%) an ounce, to $2944.00 and the DG spot price is $2923.90.
The latest U.S. inflation reports, which came out this week, indicated that the Federal Reserve may wait a while longer to cut interest rates, and Fed Chairman Jerome Powell said in congressional testimony that the central bank isn’t in a rush. High interest rates are considered bearish for gold, while low rates and rate cuts are bullish.
The consumer price index came in higher than expected for January, in data released Wednesday. Consumer prices rose 0.5% for the month and 3% for the year, above economists’ economists’ estimates of 0.3% and 2.9%. “Core” CPI, which excludes volatile food and energy prices, reached 0.4% and 3.3%, respectively, also above forecasts for 0.3% and 3.1%.
Fed interest rate increases, which began in 2022, were designed to combat high inflation. The central bank has said it closely watches inflation and labor market data when setting monetary policy.
Most investors aren’t pricing in a Fed rate reduction until July, according to investors tracked by the CME FedWatch Tool, though Fed policymakers had been widely expected to continue a series of interest rate cuts that began last year into 2025. About 97.5% expect rates to remain unchanged in March, compared with 2.5% anticipating a 25 basis point cut. Just over half expect a rate cut in July.
The Fed kept its benchmark interest rate at 4.25% to 4.50% last month. It was the central bank’s first policy meeting since July 2024 without a rate cut after three reductions last year. Previously, the Fed had kept rates at 5.25% to 5.50% for a year after raising them by 5.25 percentage points since March 2022 to combat inflation.
Front-month silver futures fell 0.2% Thursday to settle at $32.73 an ounce on Comex, and the most-active March contract increased 0.9% so far this week. Silver added 10% last month after dropping 6% in December and falling 5.1% in November. It gained 21% in 2024. The March contract is currently up $1.149 (+3.51%) an ounce to $33.875 and the DG spot price is $33.18.
Spot palladium rallied 1.3% Thursday to $1,001.50 an ounce and is up 1.6% so far this week. Palladium advanced 11% last month after falling 6.7% in December and sliding 12% in November. Palladium dropped 17% last year. Currently, the DG spot price is up $1.00 an ounce to $1002.00.
Spot platinum slid 0.4% Thursday to $1,003.50 an ounce and is up 1.5% in the first four days of the week. Platinum gained 8.4% in January after losing 4.6% in December and declining 4.2% in November. Platinum slid 8.4% in 2024. The DG spot price is currently down $12.10 an ounce to $992.70.
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