Gold hits new record early Friday on haven demand as the U.S. trade war with other nations appeared to be on the brink of widening after President Donald Trump imposed tariffs on all auto imports. DG spot gold climbed 0.7% to $3,082.16 an ounce hitting its eighteenth record high this year. The bullion is on track for a fourth straight weekly gain.
The 25% duty applies to auto imports from all locations, and an additional set of trade levies is set to take effect next week. Trump also warned the EU and Canada against uniting against the U.S. actions.
Gold holding near its record, despite this morning’s inflation report. The Fed’s key inflation measure was higher than expected in February per the Commerce Department. The core personal consumption expenditures price index had a 0.4% increase, higher than the 0.3% forecast.
The February data is being closely parsed for signs of how the tariffs and a series of job cuts are affecting the economy and could influence monetary policy going forward – though some economists are speculating that the February data lags economic developments too much to provide much insight.
June gold futures rose 1.3% Thursday to settle at $3,090.90 an ounce on Comex, and the most-active contract rallied 2.3% in the first four days of the week. Bullion is up 8.5% 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 $23.50 (+0.76%) an ounce to $3114.14 and the DG spot price is $3085.60.
Fourth-quarter GDP data, which came out Thursday, showed that the economy grew 2.4% year on year in the quarter ended in December, a faster pace than economists had forecast. Weekly initial jobless claims were little changed at 224,000 in data on last week. The Fed closely watches both inflation and labor market data when setting monetary policy. The March monthly jobs report will come out in a week.
About 87.6% of investors tracked by the CME FedWatch Tool expect rates to remain unchanged at Fed policymakers’ next meeting in May, compared with 12.4% 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% last week. 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 2.5% Thursday to settle at $35.08 an ounce on Comex, and the May contract increased 4.8% in the first four days of the week. 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 up $0.272 (+0.78%) an ounce to $35.355 and the DG spot price is $34.52.
Spot palladium added 0.8% Thursday to $985.00 an ounce and is up 1.6% so far this week. Palladium is up 6% this month after retreating 10% in February and advancing 11% in January. Palladium dropped 17% last year. Currently, the DG spot price is up $3.90 an ounce to $988.00.
Spot platinum rose 0.8% Thursday to $990.50 an ounce and gained 0.9% in the first four days of the week. Platinum is up 5% 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 $1.40 an ounce to $990.00.
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