STACKS REPORT - GOLD EXTENDS REBOUND TO SECOND DAY

Gold extends its rebound to a second day, rising early Wednesday back over the $5000 an ounce mark. Much of the bounce is appears driven by investors who expect the yellow metal to rally buying the dip.

Prices were also buoyed by a weaker dollar, making dollar denominated gold a more attractive investment for holders of other currencies. The yellow metal is also a traditional hedge against geopolitical and economic uncertainty. U.S. forces shot down an Iranian drone flying near a U.S. aircraft carrier in the Arabian Sea, the Pentagon said Tuesday. The move escalates already high tensions in the Middle East.

Meanwhile, the Labor Department said Monday that a key economic indicator, the U.S monthly jobs report due out on Friday, would be delayed because of a federal government shutdown. The report is closely watched by investors concerned about the state of the economy and looking for signs on the Federal Reserves next moves on monetary policy.
 
This morning’s jobs report shows private companies added just 22,000 positions for January. The total was less than the downwardly revised 37,000 increase in December and below the consensus forecast for 45,000 per ADP. The Fed has said it follows inflation and the labor market when setting interest rates.  These weaker signs could support lowering interest rates.

April gold futures rose 6.1% Tuesday to settle at $4,935.00 an ounce on Comex, and the front month contract is up 4% so far this week. Bullion surged 9.3% in January after rising 2% in December and gaining 6.5% in November. It rallied 64% last year.  The April contract is currently up $85.10 (+1.72%) an ounce to $5020.10 and the DG spot price is $5009.40.

J.P. Morgan forecast this week that gold will reach $6,300 an ounce by the end of this year amid continued demand from central banks and investors. The yellow metal topped $5,000 an ounce last week before tumbling on Friday and Monday.

March silver futures rallied 8.2% Tuesday to settle at $83.30 an ounce on Comex, and the front month contract gained 6.1% in the first two days of the week. It touched a record above $115 last week. Silver gained 11% in January after climbing 24% in December and increasing 19% in November. It rose 141% last year. The March contract is currently up $6.744 (+8.10%) an ounce to $90.045 and the spot price is $90.67.

The selloff in precious metals, the biggest drop in a decade was triggered by the news Friday that U.S. President Donald Trump would appoint inflation hawk Kevin Warsh as the next Fed chairman, succeeding Jerome Powell, whose term ends in May. Precious metals had, however, reached a series of record highs in recent weeks and were widely seen as overbought. Powell and Trump have long been at loggerheads over the president’s call for lower interest rates.

The Fed last week kept benchmark interest rates unchanged at 3.50% to 3.75% after reducing rates at the previous three policy meetings. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts in 2024.

More than 90% of investors are betting that the Fed will keep interest rates unchanged again in March, according to figures tracked by the CME FedWatch Tool. About 9% expect another 25 basis point cut. The Fed reduced interest rates for a third consecutive time in December to 3.50% to 3.75%. 

Spot palladium increased 4.8% Tuesday to $1,768.00 an ounce and gained 6.9% so far this week. Palladium rose 2.4% in January after increasing 11% in December and adding 0.5% in November. Palladium gained 74% last year. Currently, the spot price is up $55.40 an ounce to $1824.00.

Spot platinum rose 4.8% Tuesday to $2,216.80 an ounce and increased 7.8% so far this week. It gained 1.4% in January after surging 22% in December and climbing 4.7% in November. Platinum increased 122% in 2025.  The spot price is currently up $46.40 an ounce to $2280.20.

Metalstacks is a private club focused on the study and discussion of the precious metals industry. The views, opinions, and forecasts expressed herein are solely those of the author(s) and are not intended to be a recommendation to buy, sell, or hold any specific metal, security, or investment product. The authors and the Metalstacks Precious Metals Club are not registered financial advisors, brokers, or dealers. Always consult with a qualified financial, investment, tax, or legal professional before making any investment decisions. Your personal financial situation and goals are unique. Investing in precious metals and related assets involves significant risk. The value of investments can fluctuate, and you may lose some or all of your principal investment. Past performance of any asset, including gold and silver, is not indicative of future results. By reading this article, you acknowledge and agree that you are solely responsible for your own investment decisions.