Gold steady ahead of the release of the Fed minutes later today as investors await further signals on the pace of interest rate cuts from the first Federal Reserve policy meeting of 2025.
The Fed is almost unanimously expected to keep interest rates unchanged Wednesday, but the central bank is likely to signal its path for monetary policy for the next few months or the rest of the year. High interest rates are considered bearish for gold, while low rates and rate cuts are bullish.
Gold prices remained elevated as a hedge against geopolitical and economic uncertainty amid a spate of new orders from the Trump administration on issues from the size of the federal workforce to policies on tariffs, trade and immigration.
April gold futures rose 1% Tuesday to $2,794.60 an ounce on Comex, though the most-active contract retreated 0.4% in the first two days of the week. Bullion is up 5.8% this 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. The April contract is currently up $6.9 (+0.25%) an ounce to $2801.50 and the DG spot price is $2763.70.
In economic news, the Fed’s favorite inflation measure, the personal consumption expenditures price index, comes out Friday, two days after the Fed’s monetary policy announcement.
The Fed cut rates three times last year, reducing its benchmark interest rate in September, November and December. It’s now at 4.25% to 4.50%. 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.
Most investors aren’t pricing in rate reduction in March, either and are evenly divided about whether there will be one in June, according to investors tracked by the CME FedWatch Tool.
Canada also has a rate decision coming out Wednesday, followed by the European Central Bank on Thursday.
Front-month silver futures rose 1.5% Tuesday to $30.88 an ounce on Comex, though the most-active March contract fell 1% in the first two days of the week. Silver is up 5.6% this month after dropping 6% in December and falling 5.1% in November. It gained 21% in 2024. The March contract is currently up $0.443 (+1.43%) an ounce to $31.325 and the DG spot price is $30.98.
Spot palladium slid 0.4% Tuesday to $962.50 an ounce and is down 3.9% so far this week. Palladium is up 3.7% this month after falling 6.7% in December and sliding 12% in November. Palladium dropped 17% last year. The current DG spot price is up $9.90 an ounce to $973.50.
Spot platinum lost 0.4% Tuesday to $949.90 an ounce and fell 0.4% so far this week. Platinum is up 4% this month after losing 4.6% in December and declining 4.2% in November. Platinum slid 8.4% in 2024. The DG spot price is currently up $11.70 an ounce to $959.10.
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