NEW YORK: Gold prices edged lower on Thursday, weighed down by easing geopolitical tensions in the Middle East and continued uncertainty over the Federal Reserve’s interest rate trajectory.
Spot gold fell 0.5% to $3,316.47 per ounce, as of 0933 a.m. EDT (1333 GMT). US gold futures slipped 0.4% to $3,329.20. “Gold has declined over the past few sessions due to de-escalation in the Middle East. Also, adding pressure was the anticipated interest rate cut — eagerly awaited by the market that continues to be delayed amid rising inflation expectations driven by Trump-era tariffs,” said David Meger, director of metals trading at High Ridge Futures. Meanwhile, Fed Bank of Richmond President Thomas Barkin cautioned it was hard to know how tariff increases will translate into inflation in the US economy.
Chicago Fed president Austan Goolsbee said a decision by US President Donald Trump to name a replacement for Fed chair Jerome Powell would have no influence on monetary policy from outside the central bank. Markets currently anticipate two rate cuts totalling 50 basis points this year, starting in September.
Gold usually does well during times of uncertainty and inflation, but higher interest rates make it less attractive since it doesn’t earn any interest.
Data showed the US economy contracted a bit faster than previously thought in the first quarter amid tepid consumer spending, underscoring the distortions caused tariffs.
Investors are now eyeing Friday’s Personal Consumption Expenditures (PCE) data. Palladium lost 2.5% to $1,084.41. Platinum climbed to its highest level since September 2014, adding 1.7% to $1,377.62. Internal combustion vehicles are likely to remain relevant for longer as governments delay phase-out targets, and biofuel adoption continues to rely on platinum group metals, said Nitesh Shah, commodities strategist at WisdomTree. Spot silver was up 0.2% to $36.39.
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