Gold Futures Update: Prices Weak, Fed Minutes Hawkish

Feb 22, 2024 5:04 AM

Gold and silver prices are weaker in afternoon trading Wednesday but trading not far from levels seen just before the just released report on U.S. monetary from the Federal Reserve. April gold was last down $4.50 at $2,035.30. March silver was last down $0.246 at $22.885. This afternoon’s release of the minutes from the last FOMC meeting of the Federal Reserve showed members remained significantly concerned about rising inflation despite the Fed’s monetary policy tightening likely having peaked. The minutes showed FOMC members want to see more progress on reaching the Fed’s 2% annual inflation level before lowering interest rates. The marketplace is likely deeming the minutes slightly hawkish, but not unexpected. Recent warmer U.S. inflation reports already had the marketplace thinking the Fed will hold off on lower interest rates until the second half of the year, if even then. U.S. stock index futures are weaker in early afternoon trading and showed no significant reaction to the FOMC minutes.

Wheat Futures Rally

Wheat futures rallied Tuesday, led by Chicago contracts, with support from a weaker dollar and geopolitical tension. Corn futures also rose, though prices hovered near multi-year lows. Spillover strength from those commodities helped pull soybeans higher. The March corn future added 2¼¢ to close at $4.18¾ per bu. Chicago March wheat soared 22¼¢ higher to settle at $5.82¾ per bu. Kansas City March wheat jumped 18½¢ to close at $5.85¾ per bu. Minneapolis March wheat advanced 10¾¢ to close at $6.65½ per bu. March soybeans added 6¾¢ to close at $11.79 per bu. March soybean meal added $2 to close at $347.60 per ton. March soybean oil lost 0.18¢ to close at 45.41¢ a lb.

US Equity Markets Falter

US equity markets faltered again Tuesday under pressure from tech giant Nvidia ahead of the company's earnings report as investors pondered whether the artificial intelligence frenzy has staying power. The Dow Jones Industrial Average fell 64.19 points, or 0.17%, to close at 38,563.80. The Standard & Poor's 500 dropped 30.06 points, or 0.60%, to close at 4,975.51. The Nasdaq Composite lost 144.87 points, or 0.92%, to close at 15,630.78.

US Crude Oil Prices Lower

US crude oil prices were lower Tuesday. The expiring March West Texas Intermediate light, sweet crude future fell $1.01 to close at $78.18 per barrel while the April contract dropped $1.42 to close at $77.04 per barrel.

US Dollar Index Declines

The US dollar index declined for a fourth-straight session Tuesday.

US Gold Futures Advance

US gold futures advanced again Tuesday as the dollar continued lower. The February contract rose $16 to close at $2,027.50 per oz.

Wheat Futures Slide

Wheat futures slid to fresh contract lows Friday on continued pressure from weak export demand due to lower-priced supplies from Russia and Ukraine, and on prospects for higher US production in 2024. Corn futures were mixed, mostly higher, and soybean futures posted modest gains after both set three-year lows during the week on ample domestic and global supplies. The March corn future slipped 1¼¢ to close at $4.16½ per bu, but July and beyond were firmer. Chicago March wheat dropped 6½¢ to settle at $5.60½ per bu. Kansas City March wheat declined 8½¢ to close at $5.67¼ per bu. Minneapolis March wheat lost 3¼¢ to close at $6.54¾ per bu. March soybeans advanced 10¢ to close at $11.72¼ per bu. March soybean meal added $6.10 to close at $345.60 per ton. March soybean oil lost 0.41¢ to close at 45.59¢ a lb.

US Equity Indexes Decline

US equity indexes declined on Friday and ended the week with losses. Traders processed multiple pressuring economic reports from the week, including hotter-than-expected inflation data (likely to delay the Fed's interest rate cuts) and contracting retail sales. The Dow Jones Industrial Average fell 145.13 points, or 0.37%, to close at 38,627.99. The Standard & Poor's 500 dropped 24.16 points, or 0.48%, to close at 5,005.57. The Nasdaq Composite lost 130.52 points, or 0.82%, to close at 15,775.65.