Gold Gains 0.7% To Open Key Trading Week

 

Gold Gains Ahead of Key Economic Data

(Bullion News Network) – Gold is set to end Monday up $24 (0.7%) from Friday’s closing price. The precious metal gained to start the week after sliding amid a strong Wall Street recovery last week. Considerable uncertainty remains a primary price motivator in American and global markets as traders attempt to get a read on the Trump administration’s plan for global trade. In particular, the focus this week is the ongoing trade war with China. Stocks soared last week after U.S. President Donald Trump suggested that he plans to reduce U.S. tariffs on Chinese goods. The White House told reporters that Trump and Chinese President Xi Jinping had discussed trade war de-escalation on a phone call, a claim that China continues to reject. Although the possibility of de-escalation in the U.S.-China trade war caused a drop in gold prices last week, a lack of substantive progress announcements from D.C. may be motivating more interest in safe haven assets, including gold.

Starting tomorrow, investors will have access to a range of data reports that could provide more insight into the economic strength of the U.S. With another Federal Reserve meeting looming on May 7th, this week’s data reports should give traders an early look at how the FOMC may vote at that meeting. The April consumer confidence report will be released tomorrow at 10 am. Considering the record drop in consumer sentiment markets noted last week, the April confidence index will provide an essential look into the views of American consumers amid an increasingly anxious U.S. economy. 

Wednesday will see a fresh PCE index for March. The Personal Consumption Expenditures Index (PCE) is one of the Fed’s preferred measures of inflation. Median forecasts expect the PCE index, core PCE index, and year-over-year PCE to decrease considerably. Most notably, forecasters believe that the overall PCE index could hit 0% for the month of March, down from 0.3% in February. As economists have noted, it may still be too soon to observe the impacts of the White House’s tariffs and the U.S.-China trade war on consumer prices. Last week’s consumer sentiment report showed that a large percentage of Americans are concerned about how tariffs and the trade war could impact prices, so unexpected movement in the March PCE could have an immediate impact on both Wall Street and the gold market. 

Rounding out the busy week of economic data is an initial jobless claims report on Thursday, followed by U.S. nonfarm payrolls, the U.S. unemployment rate, and U.S. hourly wages on Friday. Together, these data reports should give traders significant insight into how the FOMC is likely to view the economic situation heading into next week’s meeting. Federal Reserve Chair Jerome Powell told business leaders on April 16th that President Trump’s tariffs could have a major impact on consumer prices, but he cautioned that tracking which inflationary upticks are attributable to specific policies is easier said than done. Powell was particularly concerned about a potential “challenging scenario” in which the Fed’s dual mandate objectives of lowering prices and maximizing employment are placed in conflict with one another. 

Interest rate speculation has not played a major role in gold’s price action so far in 2025, which has instead been dominated by news of tariffs, political uncertainty, and the ongoing trade war with China. Last year, speculation surrounding interest rate cuts drove the price of gold to multiple all-time highs in 2024. Although the Fed still anticipates one or more rate cuts for 2025, Powell told reporters on the 16th that President Trump’s historic tariff proposals could alter the timeline of the Fed’s rate cuts. This possibility could make the upcoming week of data reports all the more important for traders trying to gauge the FOMC’s approximation of the American economy’s strength heading into May.

Gold will begin the week up 0.7% from last Friday’s closing price. Silver also gained on the day, and the gold-silver ratio remains elevated at just over 100:1. As of April 28th, CME FedWatch forecasts a probability of 9.4% that the FOMC will vote to cut interest rates by 25 basis points. This is down from 10.4% on Friday, 14.7% last week, and 18.5% one month ago.