Gold and silver open lower then rebound after inflation report and blockade threat
Gold (GC=F) June futures opened Monday at $4,633.20 per ounce; This is 3.2% lower than Friday’s closing price of $4,787.40. Gold recovered in early trading and rose to $4,739.40 as of 06:55 GMT.
Silver (SI=F) May futures opened at $73.69 per ounce on Monday; This is 3.6% lower than Friday’s closing price of $76.48. The silver price rose to $74.47 at 06.55 GMT.
Today the gold price and silver price are facing multiple catalysts. The latest CPI report showed that March prices increased by 3.3%, the largest increase since April 2024. This was mainly due to high gas prices associated with the Iran war. The inflation crisis resets the interest rate outlook. The Fed is more likely to keep or raise borrowing costs rather than lower interest rates this year. In the absence of other factors, higher interest rates generally reduce gold demand and pricing.
Over the weekend, President Trump ordered the blockade of the Strait of Hormuz after the failure of peace talks with Iran. Rising tensions in the Middle East have unsettled traders and raised the possibility of an economic downturn caused by high fuel prices. The demand for gold as a safe haven may increase during an economic crisis. This, along with lingering hopes for a diplomatic end to the war, contributed to gold’s recovery after the open.
The opening price of gold futures on Monday was 3.2% lower than Friday’s close. Let’s take a look at how the opening gold price has changed over the past week, month and year:
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One week ago: -0.5%
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One month ago: -9%
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One year ago: +45.6%
Gold’s one-year gain was 95.6% on January 29.
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The opening price of silver futures on Monday fell 3.6% from Friday’s close. Here’s how the opening silver price has changed over the past week, month and year:
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One week ago: +2.6%
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One month ago: -10.1%
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One year ago: +136.8%
Learn more: How to invest in silver: A beginner’s guide
The price of gold may be quoted in multiple formats due to the different ways the precious metal is bought and sold. The two main gold prices investors need to know are spot prices and futures gold prices.
Learn more: How to invest in gold in 4 steps?
The spot price of gold is the current market price per ounce of physical gold as a raw material, sometimes called spot gold. Gold ETFs backed by physical gold assets generally track the spot price of gold.
The spot price is lower than what you would pay to buy gold coins, bars, or jewelry because your total price will include a profit margin called the gold premium, which covers refining, marketing, dealer overhead, and profits. The spot price is more like the wholesale price, and the spot price plus the gold premium is the retail price.
Learn more: Are you thinking of buying gold? Here’s what investors should pay attention to.
Gold futures are contracts that require gold transactions at a certain price at a future date. These contracts are traded on exchanges and are more liquid than physical gold. They agree on the expiration date of the contract or earlier, either financially or by delivery. Financial cash settlement involves paying the profit or loss of the contract in cash. Delivery means that the seller sends the physical gold to the buyer at the contract price.
Supply and demand determine gold spot prices and gold futures prices. Factors affecting gold supply and demand are:
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geopolitical events
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Central bank purchasing trends
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Inflation
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interest rates
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mining production
Learn more: Who decides the value of gold? How are prices determined?.
Whether you’ve been following gold and silver prices since last month or since last year, the gold and silver price charts below show the change in value of the precious metals.
