Monday Metals Market Update – Precious Metal Price News (3 June 2024)

 

Monday Metals Market Update – Precious Metal Price News (3 June 2024)

Monday morning was marked by a moderate price recovery in the gold and silver markets. Gold and silver fell last week after the monthly PCE report revealed that the U.S. economy is still struggling to combat inflation. Investors pulled their money out of metal markets as the troubling inflationary data dampened expectations for interest rate cuts at the Federal Reserve’s June meeting. 

This morning, gold shows signs of recovery, climbing over $21 on the day as speculation turns toward the next Fed meeting. Silver followed suit, hovering above a vital $30 support line. The gold-silver ratio remains manageable at 76.62:1 and is up .25 for now. 

Platinum markets continue to suffer, despite the metal’s promising fundamentals and an ongoing supply deficit. Sitting at $1,028.46, the metal is down over $14 on the day – and nearly $58 from its May 17 monthly high. The platinum market remains exceptionally volatile as the metal moves opposite to both gold and silver. 

PCE data released last Friday suggests that inflation continues to trouble the Federal Reserve, who suggested that up to three interest rate cuts are coming later this year. Since the Fed employs the PCE price index as a primary measure of inflation, lackluster May 31 data means that smart money is not on easing interest rates this June. 

Read the latest precious metal market news below. 

Gold Shows Signs of Recovery – Investors Eye June 11 Federal Reserve Meeting

The past few weeks have been volatile for gold. On May 20, the death of Iran’s President helped push gold to a fresh all-time high of $2,450. Prices dropped nearly $100 later that week before recovering moderately on May 28. Gold bulls continued to push the metal’s price higher on May 28, riding high hopes in the lead-up to last Friday’s PCE report. 

Gold fell another $16 Friday morning, as fresh PCE data revealed that the U.S. continues to struggle with climbing inflation rates. As experts anticipated, April showed a 2.7% increase from March, suggesting that the Federal Reserve’s battle to curb inflation is far from over. Markets reacted swiftly, as unfavorable PCE data means that interest rate cuts are likely to be delayed further while the Fed attempts to get a handle on inflation. 

Gold recovered modestly this morning as investors turn their attention to the Federal Reserve’s next meeting, which is slated for June 11. A gold breakout is almost guaranteed if the Fed makes good on its promises of lower interest rates, so investors should pay careful attention to how the Federal Reserve Board interprets the latest PCE data. 

Gold Price Forecast (June 3, 2024): Investors Should Limit Rate Cut Expectations For Now

Gold price-action in 2024 has been motivated by a combination of geopolitical instability and speculation concerning federal interest rates. The latter drove gold to a series of all-time highs in March, April, and May. Despite optimism from gold bulls, recent PCE data suggests that inflation is still uncontrolled – and rate cuts are unlikely to be a topic of discussion at the Federal Reserve’s June 11 meeting. 

Federal Reserve watchdog CME Group anticipates a 99.9% chance that interest rates will remain unchanged after the Fed’s next meeting. Expect volatility in the gold market in the lead-up to this meeting. On a longer timeline, gold’s prospects appear more optimistic. CME Group predicts a 69% chance that the Federal Reserve will cut rates in September, and an 89% probability that rate cuts will be on the docket by December. 

Silver Maintains Support Above $30 (June 3, 2024) 

Silver followed suit with gold last week, climbing to a 10-year high above $32 before crashing amid unpromising news from April’s PCE report. The precious metal is up nearly $.30 from Friday’s week-long low of $30.41. The $30 psychological support is an important one to watch. The metal has hovered above $30 since May 16 of this year. 

Silver Technical Scoop: Precious Benefit, Market Divergences

By David Chapman

Silver peaked at $32.75, fell to $30.24, rose to $32.51, and dropped again to $30.44. Testing under $30, the breakout point, is possible. Strong support is evident down to…https://t.co/N7noyJKwM8

— SilverSeek.com (@SilverSeekcom) June 3, 2024

The gold-silver ratio (GSR) jumped over .25 to 76.62 this morning, maintaining a yearly low compared to 2023 and 2024. For now, silver continues to move in tandem with gold. 

Silver Price Predictions (June 3, 2024): Silver Moves Closely With Gold, Investors Should Watch GSR Data For Cues 

Like gold, silver’s recent price-action has a lot to do with speculation concerning federal interest rates. PCE data from last Friday (May 31) dampened investors expectations for earlier-than-expected rate cuts. Expect heavy volatility in the silver market as bulls and bears battle over what to anticipate from the Fed’s next meeting. 

The likelihood that the board votes to cut interest rates in the next couple of months remains low. Speculation may drive back-and-forth price-action for silver, but expect prices to fall sharply once the Fed’s minutes fall in line with the most recent expert predictions regarding interest rate movements. 

The Big Story: Platinum Continues Dropping Despite Strong Fundamentals and Ongoing Supply Concerns 

Corrections and recoveries on the gold and silver markets were unsurprising, given that PCE data drove last week’s run and unfavorable news dampened expectations of June 11 rate cuts from the Fed. Platinum did not follow a similar pattern. The precious metal remains down over $14 on the day while its sister metal palladium soars $17 to $958. 

Platinum supply deficits have been major news this year. Electric vehicles pose the most significant risk to global demand for platinum group metals, which are primarily used in the production of catalytic converters. Demand for EVs is expected to slow in 2024 and 2025, strengthening the position of platinum. 

Despite these strong fundamentals, platinum is the only major precious metal to see red this morning. Investors should watch the $1,000 support line as platinum prices continue to fall. 

Platinum Market Forecast (June 3, 2024): Effects of Platinum Shortage Remain to be Seen

Mitigating the impact of platinum’s supply deficit on price-action is the laundry list of platinum hoards, especially among manufacturers. Actors in the automotive industry build a significant stockpile of platinum during the COVID-19 pandemic in 2020. It appears that these stockpiles continue to play a vital role in keeping platinum prices low despite 2024’s supply shortage. 

Myra P. Saefong is a market analysist for Market Watch. in March, Saefong had this to say about why platinum prices continue to flounder despite record supply shortages: 

WPIC believes the supply deficit in platinum hasn’t been able to boost prices because automakers accumulated excess PGM inventories during the 2020 to 2022 period.

Expect platinum prices to continue to fall until existing supply stockpiles are exhausted. This could take several months. If platinum approaches parity with palladium, prices may increase as automotive manufacturers double-down on platinum and further eat into their stockpiles of the metal. 

Precious Metal Market Analysis – 6/3/2024

As always, geopolitical developments and key U.S. economic health indicators will play a pivotal role in influencing price-action across all precious metal markets. Expect gold and silver price movements to move unpredictably as new data sheds light on the likelihood of rate cuts in upcoming Federal Reserve meetings. 

Favorable remarks from Federal Reserve Chair Jerome Powell could also influence the market. Because of unpromising inflation data from May 31’s PCE price index, expect speculation regarding interest rate cuts to cool until after the Federal Reserve releases minutes from its June 11 meeting. 

Platinum prices will continue to be unpredictable. New data concerning automotive industry stockpiles of the metal could reinvigorate the market – especially if the data suggests that platinum reserves are being quickly depleted. 

For now, all eyes are on the Fed’s next move as they continue to grapple with inflation and attempt to make good on their promises of lower 2024 interest rates.