A Daily Journey Through the Week's Market
Monday - 6.16.25: Gold prices slipped in midday U.S. trading Monday, down $33.90 to $3,418.90, after hitting a five-week high overnight, as improved risk appetite and profit-taking weighed on the metal; silver held near steady, up $0.05 to $36.40. U.S. and global stock markets climbed, despite ongoing tensions between Israel and Iran, which have yet to spark panic unless oil prices spike or the Strait of Hormuz is threatened. The G7 summit began in Canada, and the Fed’s FOMC meeting is underway this week, though no rate cut is expected.
Tuesday - 6.17.25: Gold prices fell in midday U.S. trading Tuesday as improved risk appetite weighed on safe-haven demand, with August gold down $16.40 to $3,401.00. Meanwhile, silver surged $0.857 to $37.30, hitting a 13-year high on strong technical and value buying. Although market sentiment remains cautious, it is not marked by strong risk aversion. President Trump left the G7 summit early to address the escalating Israel-Iran conflict, issuing hawkish statements and warning of a major development beyond a ceasefire. The Fed’s two-day policy meeting also kicked off, with no rate cut expected when it concludes Wednesday.
Wednesday - 6.18.25: Gold edged up slightly and silver slipped in Wednesday afternoon trading as the Fed held interest rates steady and reiterated inflation concerns, prompting little market reaction. August gold rose $3.50 to $3,410.40, while July silver, after hitting a 13-year high overnight, fell $0.166 to $36.985. U.S. stock indexes were modestly higher, though risk sentiment remained elevated amid reports that President Trump is considering striking Iranian nuclear sites, raising geopolitical tensions but not yet triggering investor panic.
Thursday - 6.19.25: Juneteenth - Markets closed.
Friday - 6.20.25: Gold and silver prices fell in early U.S. trading Friday as short-term traders took profits ahead of the weekend, with August gold down $23.20 to $3,364.00 and July silver off $0.305 at $36.055. Markets have absorbed the Fed’s decision to hold rates steady, with Powell maintaining a hawkish stance amid persistent inflation—despite President Trump’s call for deep rate cuts and criticism of Powell as “dumb.” Weak risk appetite, mixed global markets, and geopolitical uncertainty around U.S.-Iran-Israel tensions are also weighing on sentiment.
Powell Warns: “Someone Has to Pay” as Tariff Fears Cloud Rate Cut Outlook
Inflation and unemployment expected to rise in 2025, but the Fed stays patient—for now.
The Big Picture
Federal Reserve Chair Jerome Powell acknowledged that while economic uncertainty has eased somewhat, too much risk remains for the Fed to confidently lower interest rates. New data from the central bank shows a divided outlook among Fed officials, many of whom are now weighing the potential inflationary fallout from renewed tariffs—especially under a possible second Trump administration.
What’s Happening
The Fed released fresh projections that reveal a lack of consensus:
- 10 officials support at least two rate cuts this year
- A nearly equal number see no cuts at all
Powell admitted there's little conviction behind any specific path, citing the unknown economic impact of potential trade policy shifts. The main worry? Tariffs. If they return in force, they could trigger a painful mix of higher inflation, slowing growth, and rising unemployment.
By the Numbers
- Number of Fed officials expecting ≥2 rate cuts in 2024: 10
• Officials expecting no rate cuts: Almost as many
• Inflation and unemployment outlook (2025): Higher than March forecast
• Growth expectations (2025): Lower than previous projections
Why It Matters
Powell was blunt: “Someone has to pay” when tariffs rise. Although producers may try to avoid passing on costs, history shows end consumers often shoulder the burden. If inflation jumps while growth slows, the Fed could face a worst-case scenario: stagflation. And unlike previous cycles, today's inflation is more politically charged and policy-driven.
The Bottom Line
The economy may look solid now, but 2025 could bring stormier weather. With trade tensions, sticky inflation, and unclear fiscal direction, the Fed isn’t rushing to cut rates. Investors hoping for quick relief may need to adjust expectations—especially if tariffs once again become the economic wildcard.
Fed Holds Rates Steady, Still Expects Two Cuts in 2025
Inflation and growth forecasts shift, but the central bank signals patience amid rising political pressure and global risks.
The Big Picture
The Federal Reserve left interest rates unchanged this week, keeping its benchmark rate at 4.25%-4.5%—a level it’s held since December 2024. While inflation remains elevated and economic growth projections have slipped, the Fed still expects to cut rates twice by year-end. The decision reflects a balancing act between cooling price pressures and lingering uncertainty over tariffs, geopolitics, and government debt.
What’s Happening
Markets had already priced in no change this week, but the Fed’s updated “dot plot” still showed two rate cuts expected in 2025. However, officials scaled back projected cuts for 2026 and 2027, reflecting longer-term caution.
- 7 of 19 Fed participants now see no cuts this year, up from 4 in March
- Still, the policy statement passed unanimously
- Officials see the Fed funds rate settling around 3.4% by 2027
The rate path remains murky. Chair Jerome Powell said the Fed is in no rush: “We are well positioned to wait to learn more about the likely course of the economy.”
By the Numbers
- Fed Funds Rate: Held at 4.25%-4.5%
• 2025 GDP forecast: 1.4% (down 0.3 pts from March)
• 2025 PCE inflation: 3% (up 0.3 pts)
• 2025 Core PCE inflation: 3.1%
• 2025 Unemployment: 4.5% (up from 4.4%)
• Projected interest on U.S. debt (2025): $1.2 trillion
• U.S. deficit projection: $2 trillion+ (>6% of GDP)
Why It Matters
The Fed is signaling a cautious easing path, worried that trade tariffs and foreign policy risks could keep inflation sticky. Powell reinforced that “someone has to pay” for tariffs, and ultimately some of that cost hits the consumer. Meanwhile, signs of a softening economy—declining retail sales, rising layoffs, and weakening housing data—could tilt the Fed toward easing.
The Fed also faces political pressure. Former President Trump continues attacking Powell, calling for aggressive rate cuts to ease the cost of financing the $36 trillion national debt. But so far, Fed officials are holding firm, choosing data over rhetoric.
The Bottom Line
Despite elevated inflation and weaker growth forecasts, the Fed isn’t panicking. Two cuts are still in play for 2025—but they’re not guaranteed. Between trade risks, rising debt costs, and geopolitical tension, the Fed is content to “sit on its hands” for now, watching which side of its dual mandate—price stability or employment—breaks first.
Gold Holds Steady as Fed Stays Put and Raises Inflation Outlook
Markets digest mixed signals from central bank as gold hovers near $3,400 despite economic downgrades.
The Big Picture
Gold prices remained flat on the day even as the Federal Reserve left interest rates unchanged and signaled slower growth, higher inflation, and a shallower path of rate cuts in future years. While volatility hit the metals market after the Fed’s policy announcement, gold held its ground—trading just below $3,400 an ounce—as investors weighed elevated inflation forecasts against a still-cautious Fed.
What’s Happening
As expected, the Fed maintained its target range at 4.25%–4.50% but made several notable changes to its economic projections:
- Growth expectations were lowered for 2025 and 2026
- Core and headline inflation estimates were revised higher across all years through 2027
- The Fed’s “dot plot” still shows two rate cuts in 2025, but fewer cuts in 2026 and 2027 than previously expected
Despite the data, Fed Chair Jerome Powell struck a neutral tone, stating the committee remains “attentive to the risks to both sides” of its dual mandate.
Spot gold last traded at $3,390.81, virtually unchanged on the day.
By the Numbers
- Spot gold: $3,390.81 (unchanged)
• Fed funds rate: Held at 4.25%–4.50%
• 2025 GDP forecast: 1.4% (down from 1.7%)
• 2026 GDP: 1.6% (down from 1.8%)
• 2025 core inflation: 3.1% (up from 2.8%)
• 2025 headline inflation: 3.0% (up from 2.7%)
• 2025 unemployment: 4.5% (up from 4.4%)
• Projected Fed funds rate in 2027: 3.4% (up from 3.1%)
Why It Matters
The Fed’s revised forecasts underscore a stubborn inflation environment—even as growth cools and the labor market shows signs of softening. That’s a mixed backdrop for gold: While inflation typically supports gold as a hedge, higher-for-longer rates could dampen demand. Still, analysts say the market is treating the Fed’s stance as a placeholder.
Michael Brown of Pepperstone called the Fed’s posture “neutral” and expects no cut until December: “The bar for a cut before Q3 remains very high.” Jamie Cox of Harris Financial added that the Fed is “overplaying the inflation story” and could end up cutting more aggressively in 2025 than it currently signals.
The Bottom Line
Gold is holding firm despite the Fed’s more hawkish inflation projections, as investors see through the uncertainty and remain cautious about what lies ahead. With Powell signaling patience and markets pricing in delayed rate relief, gold may stay range-bound in the near term—but rising inflation forecasts and global instability could quickly revive its momentum.
Next Week’s Key Events
Economic Calendar: June 23 – June 27, 2025
Monday, June 23
- 9:45 AM ET – S&P Flash U.S. Services PMI (June)
Provides a quick snapshot of the U.S. services sector; a soft reading may suggest weakening demand. - 9:45 AM ET – S&P Flash U.S. Manufacturing PMI (June)
Early indicator of manufacturing conditions; lower readings could point to contracting industrial activity. - 10:00 AM ET – Existing Home Sales (May)
Measures sales of previously owned homes; a decline may reflect affordability challenges or cooling demand.
Tuesday, June 24
- 9:00 AM ET – S&P Case-Shiller Home Price Index (20 cities) (April)
Tracks changes in home prices across major metro areas; rising prices may reflect tight supply and persistent demand. - 9:15 AM ET – Cleveland Fed President Beth Hammack Speaks
Markets may watch for policy tone or insight on inflation and rate trajectory. - 10:00 AM ET – Consumer Confidence (June)
Gauge of public sentiment on economic conditions; weaker confidence could impact spending behavior. - 10:00 AM ET – Fed Chair Powell Testifies to House Financial Services Committee
A high-stakes event; markets closely monitor Powell’s testimony for clues on future rate decisions and economic outlook.
Wednesday, June 25
- 10:00 AM ET – New Home Sales (May)
New home sales offer insight into housing demand and construction strength; lower numbers may point to buyer hesitation or affordability pressures.
Thursday, June 26
- 8:30 AM ET – Initial Jobless Claims (Week Ending June 21)
Monitors weekly layoffs; a rise could suggest weakening labor conditions. - 8:30 AM ET – GDP (Second Revision) (Q1)
Second estimate of Q1 economic growth; downward revisions could trigger concerns about slowdown. - 9:00 AM ET – Cleveland Fed President Beth Hammack Speaks
Investors will look for any shift in policy views or reaction to recent data. - 10:00 AM ET – Pending Home Sales (May)
Leads existing home sales by one to two months; a decline may indicate future housing market weakness.
Friday, June 27
- 8:30 AM ET – PCE Index (May)
The Fed’s preferred inflation gauge; softer data may boost rate-cut hopes, while strong numbers could dampen them. - 10:00 AM ET – Consumer Sentiment (Final) (June)
Measures how Americans feel about the economy; a key read on expectations for inflation and spending.
IMPACT ON PRECIOUS METALS MARKETS
S&P Flash U.S. Services PMI (Monday, June 23):
This early read on the U.S. services sector helps gauge broader economic momentum. A weaker-than-expected number could raise concerns about slowing demand, boosting safe-haven interest in gold and silver. Strong data may signal economic resilience, reducing the appeal of defensive assets like metals.
S&P Flash U.S. Manufacturing PMI (Monday, June 23):
This index provides a timely pulse check on factory activity. A decline in manufacturing could indicate economic softening and support gold as a hedge against slowdown. Conversely, an upbeat report could reinforce Fed hawkishness and apply downward pressure on metals through stronger dollar expectations.
Existing Home Sales (Monday, June 23):
Sales of previously owned homes offer insight into consumer demand and mortgage market conditions. A slump may suggest economic fatigue, helping precious metals gain ground. A strong report could weaken gold and silver as risk sentiment improves.
S&P Case-Shiller Home Price Index (Tuesday, June 24):
This index reflects housing inflation trends. Rising home prices may reinforce sticky inflation concerns, potentially prompting hawkish Fed policy—bearish for metals. However, if the pace of price growth slows, it could ease inflation fears and lift gold and silver on hopes of future rate cuts.
Consumer Confidence (Tuesday, June 24):
A drop in consumer sentiment often translates to lower spending expectations, enhancing gold’s safe-haven appeal. Higher confidence levels suggest economic strength and may weigh on metals by reducing defensive positioning.
Fed Chair Powell Testimony (Tuesday, June 24):
The most closely watched event of the day. If Powell signals concern over economic headwinds or hints at a pivot, it could spark a rally in gold and silver. A firm commitment to higher-for-longer rates or hawkish commentary may pressure metals by pushing real yields higher.
New Home Sales (Wednesday, June 25):
New home sales are a proxy for construction activity and consumer willingness to make large purchases. Weak figures might stoke fears of a slowdown, lifting metals. Strong sales data may boost economic optimism and reduce demand for gold and silver.
Initial Jobless Claims (Thursday, June 26):
An uptick in jobless claims typically supports gold, as it implies labor market weakness and rising recession risks. Lower-than-expected claims could hurt metals by reinforcing expectations of a robust economy and tighter monetary policy.
GDP – Second Revision (Thursday, June 26):
If growth is revised downward, it may validate recession fears and support gold prices. An upward revision could strengthen the case for sustained Fed tightening, weighing on precious metals.
Pending Home Sales (Thursday, June 26):
This forward-looking housing indicator can foreshadow broader real estate trends. Weak pending sales could enhance gold’s appeal as a safe-haven play. Strong data may curb interest in metals by implying economic momentum.
PCE Index (Friday, June 27):
Arguably the most important inflation reading of the week. A soft PCE number would ease pressure on the Fed and likely boost gold and silver. A hotter print could revive fears of persistent inflation and higher rates, applying downward pressure on metals.
Consumer Sentiment – Final (Friday, June 27):
Final sentiment figures provide a refined view of consumer outlook. A low reading may fuel defensive buying of precious metals. A surprise upward revision could undercut gold and silver by supporting a stronger growth narrative.
