Gold steady early Monday in light holiday trading as investors awaited further direction ahead of U.S. President-elect Donald Trump’s inaugural address later in the day.
Trump will begin his second term at noon Washington time Monday. Investors have been concerned about the effect on the economy of campaign promises to impose steep tariffs on goods entering the U.S. as well as to begin mass deportations. The economic outlook may affect the Federal Reserve’s planned interest rate cuts for this year. Rate cuts are considered bullish for gold, making the yellow metal a more attractive asset for investors.
Front-month gold futures rose 1.2% last week to settle at $2,748.70 an ounce on Comex, though the most-active February contract slipped $2.20 Friday. Bullion dropped 1.5% in December after losing 2.5% in November and rising 3.4% in October. The metal gained 27% in 2024, its biggest annual gain since 2010. Gold’s 2024 rally was spurred by the Fed, the economy and global central bank buying cycles. The February contract is currently down $14.30 (-0.52%) an ounce to $2734.40 and the DG spot price is $2709.60.
Most U.S. financial markets will be closed Monday for the Martin Luther King Jr. Day holiday.
A pre-inauguration call between Trump and Chinese leader Xi Jinping boosted some hopes for easing tensions between the U.S. and China, though investors were awaiting Trump’s comments after the inauguration for further direction.
In economic news, the World Economic Forum in Davos, Switzerland, begins Monday and will showcase comments from a number of government, economic and business leaders from around the world.
Last week, the U.S. consumer price index for December came out last week and showed that core inflation rose less than forecast. The data came out a day after the U.S. producer price index indicated that wholesale prices rose less than expected in December as well. Slower-than-expected inflation growth is bullish for gold because it makes Fed rate cuts more likely.
Most investors aren’t pricing in a rate cut until June, according to investors tracked by the CME FedWatch Tool. Fed policymakers are almost unanimously expected to keep interest rates unchanged next week, with just 0.5% betting on another 25 basis point cut.
The Fed reduced its benchmark interest in September, November and December. It’s now at 4.25% to 4.50%. Previously, the central bank 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 lost 0.6% last week to $31.14 an ounce on Comex, after the most-active March contract decreased 1.8% Friday. Silver dropped 6% in December after falling 5.1% in November and advancing 4.3% in October. It gained 21% in 2024. The March contract is currently up $0.044 (+0.14%) an ounce to $31.185 and the DG spot price is $30.60.
Spot palladium gained 0.2% last week to $960.50 an ounce after rallying 0.9% Friday. Palladium fell 6.7% in December after sliding 12% in November and increasing 11% in October. Palladium dropped 17% last year. Currently, the DG spot price is down $12.10 an ounce to $953.00.
Spot platinum slid 1.9% last week to $950.20 an ounce but rose 0.8% Friday. Platinum lost 4.6% last month after declining 4.2% in November and rising 1.5% in October. Platinum slid 8.4% in 2024. The The DG spot price is currently down $5.50 an ounce to $952.80.
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