Gold eases early Wednesday following its longest rising streak since February as concerns about the state of the economy attracted haven investors. The bullion also slipping Wednesday as Treasurys rise.
The yellow metal gained 2.6% since the start of the month amid economic reports showing a weak labor market and consumer spending. Investors are increasingly focused on the Federal Reserve’s next moves, with traders raising bets on an interest rate cut at central bank policymakers’ next meeting in September. Lower interest rates are typically bullish for gold, making it a more attractive alternate investment.
Investors are also cautious ahead of President Donald Trump’s Federal Reserve appointments. The President announced Tuesday he will name a nominee this week to replace Federal Reserve Board Governor Adriana D. Kugler who is resigning, effective August 8, 2025.
December gold futures rose 0.2% Tuesday to settle at $3,434.70 an ounce on Comex, and the front-month contract rallied 1% in the first two days of the week. Bullion gained 1.2% in July after slipping 0.2% in June and losing 0.1% in May. It’s up 30% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The December contract is currently down $12.40 (-0.36%) an ounce to $3422.30 and the DG spot price is $3373.00.
Record amounts of gold are being held in warehouses connected to the Shanghai Futures Exchange, Bloomberg reported, in what it said was a sign of resilient demand for gold investments in China. The quantity has almost doubled over the past month, the report said.
In economic news, the U.S. services sector “effectively stagnated” last month, according to the Institute for Supply Management’s monthly index. The measure dropped to 50.1, missing all estimates and barely indicating expansion. Readings of 50 and above indicate expansion.
Last week, the key U.S. monthly employment report showed that the labor market added just 73,000 jobs last month, below economists’ expectations. The Bureau of Labor Statistics also revised gains for the two previous months significantly lower – by 258,000 jobs. The unemployment rate ticked up to 4.2% from 4.1% in June.
Weekly initial jobless claims date are due out Thursday, along with reports on second quarter U.S. productivity and June consumer credit.
Investors also continued to watch how the rollout of U.S. President Donald Trump’s latest tariffs, scheduled to go into effect on Thursday, will play out. Economists have warned that the tariffs may begin to affect economic policy, adding pressure to the Fed to cut rates sooner rather than later.
More than 91% of the investors tracked by the CME FedWatch Tool are now betting that the Fed will cut rates at its next policy meeting in September. That’s a switch from about 63% about a week ago. The Fed held rates unchanged at 4.25% to 4.50% all year, including at policymakers’ most recent meeting last week. The central bank 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.
Front-month silver futures increased 1.3% Tuesday to settle at $37.82 an ounce on Comex, and the most-active September contract gained 2.4% in the first two days of the week. Silver rose 1.5% in July after increasing 9.5% in June and adding 0.6% in May. It rose 21% in 2024. The September contract is currently up $0.092 (+0.24%) an ounce to $37.915 and the DG spot price is $37.94.
Spot palladium decreased 0.5% Tuesday to $1,192.50 an ounce and is down 2.1% so far this week. Palladium climbed 8.8% in July after surging 14% in June and advancing 2.8% in May. Palladium dropped 17% last year. Currently, the DG spot price is down $37.20 an ounce to $1163.50.
Spot platinum fell 1.4% Tuesday to $1,325.20 an ounce, though it rose 1% so far this week. It dropped 3.9% in July after climbing 27% in June and rising 8.6% in May. Platinum lost 8.4% in 2024. The DG spot price is currently up $16.20 an ounce to $1342.80.
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Original Article: Gold eases as Treasurys rise from Blog – Dillon Gage
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