Precious Metals Move Modestly Amid Geopolitical Developments

 

Precious Metals Move Modestly Amid Geopolitical Developments

(Bullion News Network) – Gold prices moved little on Monday, retreating by less than $3 per troy ounce. Silver gained in a similarly muted price movement, adding around $0.06/ozt to its spot price. The price action marginally favored silver, driving the gold-silver ratio slightly lower to 87.51:1. Monday’s price action was a near repeat of last Friday, which saw gold and silver move little, despite a hotter-than-expected inflation report. Gold futures fell by more than the physical metal, losing 0.14%, or $4.60, before market close. Gains in the silver futures market also outpaced the physical precious metal, with gold futures gaining about 9 cents, or 0.24%, on Monday. 

Geopolitical talks dominated headlines on Monday as United States President Donald Trump met with Ukrainian President Volodymyr Zelenskyy as part of the U.S. leader’s initiative to secure peace between Ukraine and Russia. The meeting comes on the heels of high-profile talks between Trump and Putin in Alaska, which did not result in substantive progress toward a ceasefire. Reuters reports that Trump told Zelenskyy that Putin may be willing to agree to a ceasefire if Ukraine concedes both Donetsk and Luhansk. On Monday, President Trump urged Zelenskyy in a Truth Social post to cede Crimea and Ukraine’s hopes of joining NATO in exchange for peace with their larger neighbors:

President Zelenskyy of Ukraine can end the war with Russia almost immediately, if he wants to, or he can continue to fight. Remember how it started. No getting back Obama given Crimea (12 years ago, without a shot being fired!), and NO GOING INTO NATO BY UKRAINE. Some things never change!!!

President Zelenskyy refused the deal before meeting with Trump, arguing that these two territories, nicknamed the “Fortress Belt” of defensive positions in Ukraine’s fight against Russia, cannot be conceded without risking the security of the country. Trump claims that the meetings with Zelenskyy and Putin were highly successful, telling meeting attendees on Monday that “it’s going to be when, not if” the three world leaders commit to a trilateral meeting that could lead to a peaceful end to the three-year conflict between Russia and Ukraine. 

Precious metals moved little in response to the news, with traders likely not yet willing to place their bets on how these talks will contribute to stability in the region. Gold, silver, and platinum group metal prices were heavily influenced by geopolitical developments in 2024, with palladium prices being particularly susceptible to volatility as the situation in Ukraine evolved. For now, it appears that Wall Street’s attention is fixated on the U.S. economy. 

Two economic events will dominate U.S. headlines later this week.

On Wednesday, the FOMC’s minutes from its July meeting will be released. This report will give traders more insight into how the Federal Reserve views the U.S. economic situation. Notably, July’s meeting saw two dissents from Fed Governors, which had not previously occurred since 1993. More information about these two dissents could give investors insight into how the Fed may vote at its next meeting in September. According to CME FedWatch, market confidence that the FOMC will vote to cut rates dropped today, with the projected probability falling to 83.1%, lower than 85.4% one day ago and 85.9% last Monday. This figure is still up compared to a reading of 55.9% logged on July 18th. A worse-than-expected labor report released earlier this month, which led to the firing of the Bureau of Labor Statistics head, drove the odds of a September rate cut sharply higher. 

On Friday, Federal Reserve Chair Jerome Powell will deliver a speech from Jackson Hole. This will be Powell’s final speech at the economic policy symposium, and Wall Street will be eager for any hints about what the Fed may (or may not) do when it meets next month. A worse-than-expected July job market report complicated the Fed’s plans, so it is unclear which, if any, hints Powell may deliver when he speaks to economists on Friday. 

Gold and silver prices remained largely unchanged on Monday as markets prepared for a busy week of geopolitical and economic news.