Commodity Blog

Gold futures are hovering slightly above the important $1,300 threshold to kick off the trading week. Ahead of the Federal Reserve’s policy meeting, the yellow metal is rising on a weaker US dollar, global uncertainty, and disappointing economic data.

April gold futures edged up $1.20, or 0.09%, to $1,304.10 per ounce at 16:30 GMT on Monday. Last week, gold posted a modest gain of 0.75%, bringing its year-to-date increase to 1%.

Silver, the sister commodity to gold, is starting the trading week in the green. May silver futures rose $0.03, or 0.2%, to $15.355 an ounce. The white metal also advanced last week, climbing 0.2%, but it is still down nearly 2% so far this year.

On Wednesday, the rate-setting Federal Open Market Committee (FOMC) will complete its two-day policy meeting. The market will comb through Fed Chair Jerome Powell’s remarks and determine if the central bank will maintain its dovish tone and adopt a wait-and-see approach to raising interest rates. The market is not forecasting a rate hike until at least the end of the year.

A weaker buck helped gold prices as the US dollar slipped 0.03% to 96.49. A lower greenback is good for dollar-denominated commodities because it makes it more expensive for foreign investors to purchase.

Precious metals are taking their cues on global uncertainties. Any potential US-China trade agreement has potentially been delayed until June, a third vote on Prime Minister Theresa May’s Brexit proposal will take place this week, the Bank of Japan (BOJ) said there are growing signs of a global slowdown, and a lackluster performance in the equities market have all boosted the demand for gold.

On the data front, US manufacturing output declined for the second consecutive month in February, the number of Americans filing applications for jobless benefits rose more than expected, and new home sales slipped more than expected.

In other metal markets, May copper futures were flat at 2.90 per pound. May platinum futures rose $1.50, or 0.18%, to $833.30 an ounce. May palladium futures soared $16.00, or 1.05%, to $1,534.50 per ounce.

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