Daily Gold Update

Source:Matt Warden, American Gold Exchange

AustinOn the first trading day following Friday s tumultuous action in the precious metals market, gold and silver rebounded modestly. Gold closed up 1.1%, while silver gained 0.6%. Market attention now turns to upcoming US inflation data and interest rate policy decisions.

Markets await the release of the US Consumer Price Index (CPI) report on Wednesday morning, followed by the Federal Reserve s FOMC monetary policy announcement early Wednesday afternoon. May s CPI is expected to show cooling headline inflation, though core inflation is likely to remain sufficiently high to dissuade the Federal Reserve from cutting rates in June. Previous figures for 2024 have shown both monthly and core inflation rates of 0.3% to 0.4%. Core inflation excludes volatile food and energy prices.

For May, the Cleveland Federal Reserve s Nowcast estimates headline monthly inflation at 0.1% and core inflation at 0.3%. The estimated decrease in headline inflation is partly due to cooling energy prices in May. Although the Fed pays more attention to core inflation, if the Nowcast holds, the inflation data should be somewhat encouraging for policymakers after earlier signs of accelerating inflation this year.

While the U.S. central bank is not expected to change its policy rate this week, the focus will be on policymakers updated economic projections and Fed Chair Jerome Powells news conference following the two-day meeting. Insights into when the Fed might begin to reduce interest rates will be closely watched. Last month, Fed Chair Powell stated that the central bank is unlikely to raise its key interest rate in response to earlier signs of stubborn inflation.

Both platinum and palladium firmed with the other metals, each rising 0.6% on the day.

At the New York spot close: August gold increased $24.80 to $2,325.00; July silver rose $0.19 to $29.44; July platinum rose $5.40 to $976.50; and September palladium moved $5.60 higher to $923.60.