Gold prices rose on Tuesday as investors reacted to weaker US manufacturing and job opening data while anticipating the Federal Reserve’s upcoming rate decision.
US manufacturing activity contracted in April, with input prices rising at their fastest pace since 2022. Job openings also fell to the lowest level in three years. Despite the negative data, Treasury yields rebounded slightly, causing gold prices to increase by 1.1%.
In light of the mixed economic indicators, Fed officials are expected to maintain interest rates at their current levels and signal no immediate plans for rate cuts. The decision will be announced at 2 p.m. in Washington, followed by a press conference from Chair Jerome Powell.
Meanwhile, palladium prices dropped below platinum for the first time since February. The shift in prices is attributed to a pessimistic outlook for demand in gasoline-powered cars, which typically use palladium in their catalytic converters.
Platinum, on the other hand, has been supported by a projected market deficit and optimism surrounding demand for plug-in hybrid cars. However, both metals face long-term challenges from the rise of electric vehicles, which do not require the use of catalytic converters.
Despite the current price dynamics, the substitution between palladium and platinum may stall if the price premium of palladium remains low. Ultimately, both metals face uncertainties in the evolving automotive industry landscape.
Platinum rose by 1.9% to $955.60 an ounce, while palladium slipped by 0.9% to $947.20 an ounce. Gold prices increased by 0.8% to $2,305.27 an ounce, while silver also saw a 0.6% climb. The Bloomberg Dollar Spot Index was down by 0.1%.
