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Gold and silver start the week mixed within recent ranges

OUTSIDE MARKET DEVELOPMENTS: Federal Reserve Chair Kevin Warsh declined to preview any interest-rate decisions during the IMF-World Bank Annual Meetings in Bangkok last week. He reiterated that the Fed is “no longer in the business” of offering forward guidance, and praised the synchronous tightening by central banks worldwide that left “no free riders.”

Warsh expressed optimism about U.S. and global economic resilience amid energy shocks and geopolitical tensions. He also highlighted an AI-driven investment surge that is creating near-term inflationary demand pressures, noting that the path to a future state of higher productivity and greater wealth "is likely to be a very bumpy one.”

Despite recent hot inflation readings, FedSpeak heading into the blackout period conveyed little hawkish urgency for an immediate rate hike in October, with several top voices emphasizing patience and the need to carefully assess incoming data. While most still anticipated further tightening later in the year, the prevailing message was that there was no rush to act at the upcoming meeting.

Fed funds futures reflect a 17.3% probability of an October rate hike, fairly consistent over the past week but down significantly from 57.6% a month ago. The trade continues to favor a hike in December, although currently only 21 bps of tightening is priced in.

President Trump waived additional sanctions and tariffs on Russia that were part of the recently passed Graham Act, earning him bipartisan Congressional outrage. Along with the diesel supply deal he struck with Moscow two weeks ago, there are expectations of increased Russian fuel exports. However, oil prices remain elevated as the war in the Middle East threatens to broaden. 

Iran reported another oil tanker struck a mine and caught fire in the Strait of Hormuz. Meanwhile, Iran-backed Houthis launched a missile attack on a Yemeni government military camp that killed over 50 soldiers, alongside strikes on Saudi targets. Egypt has announced “all possible forms of support” for Saudi Arabia’s security, including the possible deployment of its military.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$4.20 (+0.10%)
5-Day Change: -$5.34 (-0.13%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,887.03 - $5,595.02
Weighted Alpha: -3.29

Gold starts the week back under pressure after gains last week stalled ahead of $4,200, leading to a lower weekly close. Stubbornly high oil, yields, and dollar continue to pose headwinds for the yellow metal.



Key short-term resistance is clearly defined by the recent highs at $4,217.02/$4,225.02.  This level is now protected by the 20-day moving average at $4,182.00, today's high at $4189.93, and Friday's high at $4,198.33.

Fresh two-week highs above $4,225.02 are needed to confirm the potential bottom and provide some encouragement for the bull camp. The declining 100-day MA bolsters the significance of this resistance zone.

Investors seem cautiously interested on dips ahead of the 7-Oct low. Global ETFs saw net inflows of 13.7 tonnes last week, with North American buyers leading the way with 7.3 tonnes. It was the third straight weekly inflow, and the largest since the week ended 18-Sep.

The halfway-back point of last week's rebound comes in at $4,136.11 and has contained the downside thus far today. Penetration would favor renewed tests of the $4,100 zone.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.537 (+0.94%)
5-Day Change: -$2.696 (-4.47%)
YTD Range: $54.778 - $121.630
52-Week Range: $45.563 - $121.630
Weighted Alpha: +1.29

Silver is trading higher, but remains confined to Friday's range. Hot inflation readings and expectations for another Fed rate hike this year are keeping yields and the dollar elevated, dampening sentiment in the bull camp.

 

All the important moving averages have now rotated lower, adding technical weight to the market. While last week's losses stalled shy of the July low, the downside continues to appear vulnerable to further tests. Friday's low at $56.902 marks initial support ahead of last week's low at $55.409. Below the latter, a true test of $54.778 becomes likely. 

Initial resistance is marked by Friday's high at $57.973. Above that, I'm watching $59.367 (14-Oct high) and $60. However, it would take a close above the 20-day MA at $60.630 to set up a further retracement toward recent highs above $62.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.

Gold and silver recover on Friday, but elevated yields and a strong dollar remain headwinds

Outside Market Developments: Fed Chairman Warsh participated in a fireside chat at the IMF/World Bank meeting in Bangkok, Thailand, last night. The trade was hoping for some reaction to this week's hot inflation data and perhaps a hint of forward guidance.

True to form, Warsh continues to play his cards close to the vest. He mentioned inflation only in general terms as a “common challenge” globally, adding that he does not “pre-judge” before FOMC meetings.

From his confirmation hearing onward, Warsh has maintained that he does “not believe in forward guidance” and does not think the Fed “should be signaling future decisions in advance.” He has yet to rein in the rest of the FOMC members, however, who have tilted hawkish in recent weeks.

Chicago Fed President Goolsbee called the CPI and PPI data "discouraging" on Thursday. He still holds “some optimism” that the inflation drivers may be temporary (tariffs, Middle East conflicts/supply disruptions) and could fade quickly. However, he has expressed some concerns recently that inflation is shifting from temporary supply shocks to more persistent demand-driven overheating that is partly linked to AI investment. The blackout period for the October 27–28 FOMC meeting begins tonight at midnight Eastern Time.

While annualized CPI reached multi-month highs, and PPI surged to multi-year highs, most of the inflationary pressure was attributable to energy. Perhaps reflecting some hope that energy pressures will soon moderate, Fed rate-hike expectations moderated late in the week.

Fed funds futures now put the odds of an October rate hike at 12.7%, versus  27.7% on Thursday. The implied Fed funds rate for year-end is 4.07%, implying just 19.5 bps of tightening.

It’s worth remembering that the current U.S. fiscal situation poses a meaningful constraint on further Fed tightening. Debt-servicing costs for FY 2026 (ended 30) exceeded $1 trillion, making net interest a larger budget item than both defense and Medicare – and second only to Social Security. A 25 bp rate hike would add roughly $18 billion to annual interest costs. Under current law, the CBO projects interest payments on the debt will continue rising, reaching about $2.1 trillion by 2036.

Iran-backed Houthi rebels launched missile strikes on Yemen’s presidential palace in Aden on Thursday, killing several people and wounding others, while Saudi Arabia intercepted additional missiles and drones targeting its territory. In an interview, President Trump ruled out using ground troops against Iran but left open the possibility of further conventional strikes, as tensions persist around the Strait of Hormuz and energy infrastructure. 

The Russia-Ukraine "energy ceasefire" that President Trump announced last weekend has collapsed...if it ever really existed. Ukraine resumed strikes on Russian refineries, claiming Moscow never refrained from hitting Ukrainian power and gas facilities. Brent crude retested the September high above $111.

Next week, markets will primarily focus on a heavy slate of major corporate earnings, led by high-profile reports from Netflix (Tuesday), Tesla and Meta (Wednesday), and Procter & Gamble (Thursday), which will offer fresh insights into consumer spending, tech/AI demand, and broader economic resilience. Oil prices will remain a key interest. Attention will also turn to U.S. housing data (starts and permits on Tuesday), and UofM consumer sentiment (Friday). This week's hot inflation readings will remain a significant backdrop, and the trade will continue to refine Fed policy expectations ahead of the October FOMC meeting.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$3.48 (+0.08%)
5-Day Change: -$19.77 (-0.47%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,887.03 - $5,595.02
Weighted Alpha: -5.25

Gold rebounded to pressure $4,200 in early U.S. trading on Friday, buoyed by softer yields and a pullback in the dollar. A close above $4,194.29 today would confirm a second straight higher weekly close, with a potential double bottom already providing some technical encouragement for the bull camp.



Last week's low at $4,067.07 successfully contained tests of the downside earlier in the week, leading to that as yet confirmed double bottom. Confirmation would occur on a breach of resistance at $4,217.02 (12-Oct high). This level is bolstered by the 2-Oct high at $4,225.02, and the declining 100-day moving average will move into this zone next week as well.

Given the recent rejections above $4,200, there are likely significant buy stops above those highs that the bulls will be tempted to run if they are given the opportunity. Such a move would shift focus to the $4,307.44 Fibonacci level and the 50-day MA at $4,331.32. Above the latter, the more important 50% retracement level of the Aug/Oct decline at $4,381.69 would attract.

Hot inflation readings with a tempering of hawkish Fed expectations may also be allowing the yellow metal to reassert itself as the classic hedge against rising prices. Safe-haven demand provides additional underpinning amid persistent fiscal and geopolitical risks.

On the downside, today's Asian low at $4,147.59 and Thursday's low at $4,100.39 protect the recent lows at $4,073.90/$4,067.07. With the fortification of the downside, I'm feeling a little better about my belief that the low is in at $3,945.52 (30-Jun), but the relative weakness in silver is still troubling.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.282 (+0.49%)
5-Day Change: -$3.034 (-4.99%)
YTD Range: $54.778 - $121.630
52-Week Range: $45.563 - $121.630
Weighted Alpha: -2.95

Silver has lost about 6% this week and is poised for its sixth weekly loss out of the last eight. While the white metal is higher today on position squaring, the drop to a 13-week low on Wednesday suggests the summer low at $54.778 is vulnerable to a more serious challenge.



High yields and a strong dollar continue to provide a significant headwind. There's also growing concern about waning industrial demand. Part of that is attributable to rising financing costs that threaten to slow AI infrastructure expansion. 

Solar/photovoltaic sector demand has also cooled as the peak season wound down. Umicore noted that HSBC forecasts a decline in industrial demand from 642 Moz in 2026 to 618 Moz in 2027, due in part to cost-cutting and substitution in the solar sector.

A convincing move above $60 is needed to ease pressure on the downside somewhat, but the key 20-, 100- and 50-day moving averages are the more important levels to be watching. A breach above the 50-day at $63.974 would shift focus to the September highs above $68.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.

Gold and silver weighed by hot CPI print

OUTSIDE MARKET DEVELOPMENTS: Headline CPI rose 0.6% in September, in line with expectations, versus +0.4% in August. The annualized rate of consumer inflation jumped to 3.7% y/y, above the 3.6% consensus and up from 3.4% in August. Core came in at +0.3% on expectations of +0.2%; 2.6% y/y on expectations of 2.5%, versus 2.4% in August.

Stocks turned lower, Treasury yields jumped, and the dollar strengthened as traders raised bets on further Fed rate hikes.
Odds of an October rate hike rebounded to 50% from 22.1% yesterday and 17.7% a week ago, though many still view a December move as more likely.



FedSpeak continues to tilt hawkish. NY Fed President John Williams believes another rate increase this year may be appropriate. “I haven’t changed my view that it may be appropriate to have one more rate hike... I don’t think at this time I have any reason to believe that we would need to do more” after that," he said. 

Market focus now turns to tomorrow's PPI data, where analysts are expecting inflation to moderate slightly. Consensus estimates are (headline) 5.3%, and (core) 4.4%. September retail sales data will also be released tomorrow, and the pace of consumption is expected to slow.

Iranian officials have acknowledged deploying new tactics to target ships in the Strait of Hormuz in an effort to keep oil prices elevated. Yemen’s Iran-backed Houthis have also escalated attacks on Saudi Arabia, striking an Aramco administrative building in Dhahran and launching missiles toward Riyadh that were intercepted. Oil prices remain elevated amid heightened supply-risk concerns, which continue to stoke inflation and Fed tightening expectations.

Bank of America faces more than $1.21 bln in U.S. regulatory penalties, primarily a $1.2 bln fine from FinCEN for major anti-money laundering shortcomings. The bank failed to timely report over $5 bln in suspicious transactions, including activity linked to Chinese money-laundering networks. The bank was also hit with a record $750M OCC penalty plus a smaller OFAC sanctions settlement.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$20.26 (-0.49%)
5-Day Change: +$34.80 (+0.85%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,887.03 - $5,595.02
Weighted Alpha: -6.18

Gold sold off in reaction to this morning's hotter-than-expected inflation readings, which sparked a rebound in Fed-tightening expectations and lifted yields and the dollar. So far, last week's low at $4,067.07 has contained the downside, but the surge in the dollar and sharp losses in silver suggest the downside is vulnerable.



If the yellow metal does take out that low, focus will shift to the August low at $4,022.62 with potential to the $4,000 zone. My preferred scenario has been that the low for the year at $3,945.52 will hold, but my confidence has been shaken.

Intraday resistance at $4,105.77/$4,107.08 now provides an intervening barrier ahead of the overseas high at $4,170.19. The more important level on the upside is defined by the recent highs at $4,217.02/$4,225.02, and bolstered by the falling 20-day MA at $4,210.15.

At last week’s LBMA Conference in Sorrento, Italy, delegates predicted gold would average around $5,013 in 12 months, more than 20% above current levels. The bullish outlook stems from structural drivers such as rising global government debt concerns, ongoing geopolitical fragmentation that elevates gold’s role as a neutral reserve asset, and continued strong central-bank buying. Bundesbank President Joachim Nagel emphasized that gold still accounts for a growing share of reserves and remains a key diversifier that cannot default or be easily restricted.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.709 (-1.20%)
5-Day Change: -$1.059 (-1.77%)
YTD Range: $54.778 - $121.630
52-Week Range: $45.563 - $121.630
Weighted Alpha: -0.72

Silver plunged to three-month lows following this morning's CPI report, as yields pressured recent multi-decade highs and the dollar index reached 18-month highs. The white metal has been significantly more volatile than gold amid broader risk-off sentiment. The gold/silver ratio is trading above 73 for the first time since December.



With last week's low at $58.516 and the $58.272 Fibonacci level negated, the late-July lows at $56.681/$56.583 are in play. Below the latter, the low for the year at $54.778 (17-Jul) defines key support.

Minor intraday resistance at $56.476 stands in front of the early U.S. high at $57.778. Above that, the $60 zone is likely to keep Monday's high at $61.451 at bay.  The falling 20-day MA (currently $61.920) should correspond closely with the high for the week over the next session or two. 


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.

Gold and silver retrace some of Friday's gains in thin holiday trade

Outside Market Developments: Markets are set for a relatively quiet session as U.S. bond markets are closed for Columbus Day, leaving equity trading with lighter volume and limited catalysts. Investors are largely in wait-and-see mode ahead of a pivotal week of major bank earnings and key inflation data, while monitoring oil prices amid ongoing geopolitical developments.

British Prime Minister Andy Burnham says that a recent security incident at the U.S.-run RAF Fairford air base in England was "almost certainly" directed by Iran's Islamic Revolutionary Guard. Although seven men have been arrested in connection with the investigation, no formal charges have been filed yet, and all suspects have been released on bail. In response to the threats, the U.S. recently pulled its bombers from the base, and the British government has formally summoned the Iranian ambassador over the matter.

Iran-backed Houthi rebels in Yemen struck Riyadh’s international airport over the weekend. At least 12 were killed, including one American, and hundreds were injured. The attacks against Saudi Arabia and other U.S. allies in the region risk broadening the war.

President Trump announced that Russia and Ukraine had agreed to an immediate “energy ceasefire,” under which both sides would halt attacks on each other’s energy infrastructure. The announcement came alongside a reported deal with President Putin under which Russia would supply large volumes of diesel to global markets.

News of the Trump-Putin diesel deal has been met with widespread skepticism and bipartisan backlash, as Ukraine, European allies, and many U.S. lawmakers view it as sanctions relief that rewards Russia while doing little to lower global fuel prices meaningfully. Brent crude remains elevated near three-week highs above $109.

This week's U.S. economic calendar is dominated by crucial inflation and consumer spending updates. The spotlight is on the September CPI, alongside PPI and Retail Sales, which will provide key insights into consumer demand and price pressures. Markets will also parse updates on industrial production, weekly jobless claims, and a heavy slate of FedSpeak to gauge the likelihood of further Fed rate hikes this year.

Fed funds futures currently imply 21 bps of tightening by year-end, and the timing favors December over October. U.S. Treasury yields are hovering near multi-year highs, underpinning the dollar index near 17-month highs.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$17.29 (-0.41%)
5-Day Change: +$30.25 (+0.73%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,887.03 - $5,595.02
Weighted Alpha: -5.38

Gold continues to struggle on upticks above $4,200 as yield and dollar strength offset heightened geopolitical tensions. The inability to sustain upticks after reaching a nine-week low last week suggests ongoing vulnerability.



Nearby resistance at $4,218.99/$4,225.02 has been fortified by today's overseas high and the 20-day moving average falling into the area. A close above secondary resistance marked by the 100-day MA at $4,255.62 is needed to lend credence to a bottoming scenario.

Global ETFs saw inflows of 4.5 tonnes last week. ETFs saw just one week of net outflows out of the last 14, suggesting that while investor interest has cooled, it remains resilient.



Central bank gold buying remained strong in August, led by significant purchases from China's central bank, Poland, and Uzbekistan. Official sector buying continues to provide a steady source of underlying demand that should help keep the June low at $3,945.52 at bay.

On the downside, Friday's low at $4,131.14 protects last week's low at $4,067.07. Penetration of the latter would suggest potential to the $4,000 zone before renewed buying interest emerges.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.171 (-0.28%)
5-Day Change: -$0.381 (-0.62%)
YTD Range: $54.778 - $121.630
52-Week Range: $45.563 - $121.630
Weighted Alpha: +3.92

Silver is retracing some of Friday's bounce as yield and dollar strength continue to pose headwinds. Market focus this week will remain on oil prices and key U.S. inflation data.



Higher energy and borrowing costs could dampen the pace of AI infrastructure expansion. Silver is "more exposed than gold to the growth implications of high energy costs, leaving it vulnerable if elevated oil prices and borrowing costs begin to weigh more heavily on industrial activity," according to Heraeus.

A retreat back below $60 would leave $59.183 (9-Oct low) and $58.516 (8-Oct low) vulnerable to retests. Below the latter, the $58.272 Fibonacci level provides an additional barrier ahead of congestion around $58, the $57.115/085 level, and the key cycle low from July at $54.778.

Last week's high at $62.021 will correspond closely with the falling 20-day moving average later this week, defining important short-term resistance. This area must be cleared to ease pressure on the downside and shift focus to the $64 area where the 100- and 50-day MAs come into play.

Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.

Gold and silver recover on profit-taking ahead of the weekend

OUTSIDE MARKET DEVELOPMENTS: This week, markets were choppy and indecisive amid elevated Treasury yields (the 10-year briefly hitting multi-decade highs near 5.36%), volatile oil prices driven by Middle East tensions and Iran-related supply risks, and shifting Fed rate-hike expectations. U.S. stocks saw mixed performance, with the S&P 500 and Nasdaq reaching or approaching record highs early on tech/AI strength before pulling back later in the week amid semiconductor weakness and inflation concerns tied to higher energy costs.

Iran ramped up attacks on commercial shipping in and around the Strait of Hormuz this week, with the highest weekly number of strikes on oil, LNG, and other tankers since the war began. These escalations drove Brent crude higher, pushing it briefly above $108 a barrel amid fears of tighter supply.

President Trump pledged that the U.S. will not launch attacks on Iran before the November midterm elections, citing ongoing “productive discussions” with Tehran aimed at ending the conflict. He added that Iran remains in poor economic and military condition while affirming that the U.S. blockade would stay in place. Trump maintained that record volumes of oil were moving through the strait, but that doesn't seem to be supported by the facts.

The University of Michigan’s preliminary October consumer sentiment index fell to 46.3 from 48.1 in September, marking a five-month low and below expectations of 47.6. The drop was driven by heightened frustration over the cost of living, with the current economic conditions subindex plunging to an all-time low of 44.7 and year-ahead inflation expectations rising to 4.7%.

Next week, markets will focus on the September CPI and PPI report due Wednesday and Thursday, respectively. These inflation readings will provide further clarity on Fed policy expectations for the remainder of the year amid ongoing concerns over elevated yields and sticky prices. Attention will also center on the kickoff of third-quarter earnings season, with major banks including JPMorgan, Goldman Sachs, Citigroup, and Wells Fargo reporting on Tuesday, alongside other data, including retail sales, later in the week.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$45.78 (+1.11%)
5-Day Change: +$42.13 (+1.02%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,887.03 - $5,595.02
Weighted Alpha: -1.28

Gold has rebounded from Wednesday's nine-week low to probe back above $4,200. The yellow metal appears poised for a higher weekly close, buoyed by profit-taking ahead of the weekend, although firm yields and a strong dollar continue to pose headwinds.

 

Last Friday's high at $4,225.02 remains intact thus far, keeping the declining 20- and 100-day moving averages at bay for now. A short-term close above the still rising 50-day MA at $4,335.05 is needed to re-embolden the bull camp and shift attention to the halfway-back point of the Aug-Oct decline at $4,381.69 and the 18-Sep high at $4,399.30.

Fox News notes that rapid expansion of AI is fueling a new wave of demand for gold, a metal essential in advanced semiconductors, high-performance servers, and data center infrastructure. Despite record-high gold prices early this year, tech companies are continuing to rely on the metal for its superior conductivity, reliability, and corrosion resistance rather than switching to cheaper alternatives. Because electronics manufacturing requires relatively small amounts of gold compared to the value of high-end AI components, the tech sector is largely price-insensitive, creating a sustained, non-traditional demand driver that reinforces a long-term bullish outlook for the precious metal alongside the ongoing AI boom.

As long as nearby resistances remain intact, further attacks on the downside can not be ruled out. A breach of today's Asian low at $4,131.14 would leave the lows from earlier in the week at $4,103.96 and $4,067.07 vulnerable to retests. As noted earlier in the week, a drop to the August low at $4,022.62 and perhaps as low as $4,000 may be needed to attract more sustained buying interest.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.039 (+1.76%)
5-Day Change: +$0.196 (+0.32%)
YTD Range: $54.778 - $121.630
52-Week Range: $45.563 - $121.630
Weighted Alpha: +6.24

Silver is recovering from Thursday's nine-week low, despite persistently high yields and a strong dollar. A close above $60.374 is needed to confirm a higher weekly close. Today's gains appear to be associated with position squaring ahead of the weekend and next week's key inflation data.



A rebound above the 20-, 50-, 100-day moving average complex is still needed to take pressure off the downside. Chart resistance at $62.021/079 provides a solid intervening barrier.

Clearance of the MAs is needed to shift focus to the late-September highs at $67.513/529 and the more important 9-Sep high at $68.314. An eventual breach of the latter is the key to unlock the $70 zone. Ultimately, $80 must be regained to revive confidence in the long-term uptrend.

Silver’s underlying fundamentals remain broadly favorable due to a projected sixth consecutive annual supply deficit of roughly 46-67 Moz in 2026, driven by inelastic mine production – where about 70% of output is a byproduct of mining other metals and thus slow to respond to higher prices. Persistent industrial demand from electronics, electric vehicles, AI data centers, and grid infrastructure continues to provide structural support, even as solar thrifting moderates one key end-use.

On the downside, Thursday's nine-week low at $58.516 now protects the $58.272 Fibonacci level. Below that, the late-July lows are noted at $56.681/583.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.

Gold and silver fall to nine-week lows amid persistent yield and dollar strength

Outside Market Developments: Markets are in a risk-off mode today with bond yields and the dollar back on the bid, oil prices higher amid renewed Middle East tensions, and caution ahead of today's release of the September FOMC minutes. Stocks (especially growth/tech names) are pulling back from recent record highs.

Oil shipments through the Strait of Hormuz had nearly returned to pre-war levels in recent weeks, with crude exports reaching a seven-day average of about 13.5 million barrels per day – matching the pre-conflict baseline – and overall regional Middle East crude flows even exceeding pre-war averages on multiple days in late September. However, a recent surge in Iranian attacks on vessels in and around the strait has heightened shipping risks and insurance costs, preventing a full normalization of supply security and helping keep global oil prices elevated above $100 per barrel.

Today’s FOMC minutes from the September meeting are likely to reveal a broader internal debate, despite the unanimous 25 bps suggested, highlighting divergent views among officials on the need for further tightening versus a more patient approach. They are expected to underscore persistent inflation risks that supported the median projection for one additional hike in 2026, while also reflecting discussions of solid economic growth and balanced labor-market risks at the time. Evidence of some degree of reluctance among the dovish-tilted members could spark a rally in Fed funds futures.

Global bond yields have climbed sharply in recent sessions, with the U.S. 10-year note yield rising to around 5.33-5.35% and the 30-year bond yield hitting approximately 5.70-5.73%, both marking their highest levels since 2002. The sell-off has been broad-based, with U.K. 30-year gilt yields surging to a 28-year high near 6.03% and European yields, particularly in France and Italy, also advancing amid persistent inflation concerns and elevated oil prices. For heavily indebted countries, the sharp rise in global yields translates into soaring debt-servicing costs that threaten to strain already fragile budgets and amplify fiscal stress.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$47.03 (-1.13%)
5-Day Change: -$32.96 (-0.79%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,887.03 - $5,595.02
Weighted Alpha: -3.20

Gold slid to nine-week lows, weighed by expectations that the Fed will tighten at least one more time this year, which is underpinning yields and the dollar. The bear camp seemed disinclined to press the technical advantage ahead of this afternoon's release of the FOMC minutes from the September meeting.

 

Minor chart support at $4,065.84 (5-Aug low) has contained the downside thus far, but tests of secondary supports at $4,043.54 (4-Aug low) and $4,022.62 (3-Aug low) must now be considered. As noted earlier in the week, I still believe the low for the year is in at $3,945.52 (30-Jun), but my confidence in that scenario has eroded somewhat with today's downside extension.

Former lows at $4,124.23/$4,125.55 now mark first resistance. Above that, today's overseas high at $4,169.88 protects the high for the week at $4,183.65. A breach of the latter would clear the way for renewed tests above $4,200, where the highs from late last week and the declining 20- and 100-day moving averages come into play.

Not surprisingly, the World Gold Council's Gold Return Attribution Model (GRAM) confirmed that "a rise in yields and a stronger US dollar were major contributors to September’s drop in [gold] prices." The WGC went on to note that while COMEX positioning contracted sharply, global gold ETFs "recorded US$10bn (67t) of inflows across regions. North America led the charge, followed by Europe and Asia."



I found this paragraph from the WGC report interesting as I've had some difficulty justifying how the current market conditions warrant multi-decade high yields in government bonds, unless concerns about massive and growing debt loads are quietly (for now) ramping:

"Rising government bond yields have generated intense debate this year. Explanations range from stronger growth and a return to historical norms, to fiscal risk and a weakening safe-haven premium. Europe’s surge in gold ETF inflows, led by the UK and exceeding US inflows over the past three months, suggests some investors may see the rise in yields as a warning rather than a healthy normalisation." 

China’s central bank continued gold purchases for a 23rd consecutive month in September, providing some structural demand. Longer-term forecasts from the LBMA conference in Sorrento, Italy still point to potential upside toward $5,000 over the next 12 months, while near-term sentiment is cautious with a downside bias until there's some clarity on the Fed's policy intentions. I'm not expecting to get that from the FOMC minutes today.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$1.292 (-2.11%)
5-Day Change: -$0.139 (-0.23%)
YTD Range: $54.778 - $121.630
52-Week Range: $45.563 - $121.630
Weighted Alpha: +5.50

Silver fell to a nine-week low of $59 in early U.S. trading, amid persistently high yields and renewed dollar strength. The trade is eagerly anticipating the September FOMC minutes, although I'm doubtful any new insights will be revealed.



Additional losses with potential to the $58.272 Fibonacci level must now be considered. Below that, the late-July lows at $56.681/583 would be in play.

A close back above $60 today would ease pressure on the downside somewhat, but the 20-, 50-, and 100-day moving averages must be regained to allow for a retest of recent highs at $62.021/079. Further out, the $70 level is the key to unlocking more significant retracement of this year's losses toward $80.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.

Gold and silver continue to face headwinds from dollar strength and elevated yields

OUTSIDE MARKET DEVELOPMENTS: The market has significantly reduced expectations of another rate hike in October, following last week's disappointing jobs report for September. Additionally, the Fed's favored measure of inflation for August came in cooler than expected.

Fed funds futures suggest the probability of steady policy at the next FOMC meeting now stands at 78.4%, that's up from 29.1% a week ago. While diminished, the market still sees a strong probability (84.8%) of at least one 25 bps rate hike by year-end.

U.S. Treasury yields remain elevated today, with the 10-year note hovering near 5.25-5.28%, close to multi-year highs amid ongoing fiscal and inflation concerns. The dollar index hit fresh 18-month highs in overseas trading before moderating somewhat. The greenback is supported by relative U.S. economic strength, the still-hawkish Fed tilt, and generally attractive interest rate differentials.



Iranian Foreign Minister stressed on Sunday that there is “no military solution” and only fair negotiations can end the war, while warning of a stronger response to any renewed confrontation. Meanwhile, Washington is maintaining its focus on economic pressure and a blockade of Iranian ports amid stalled diplomacy.

Brent crude is modestly easier to start the week but is still above the pivotal $100 level amid the diplomatic stalemate between the U.S. and Iran and ongoing attacks on shipping in the Strait of Hormuz. However, gains have been capped by potential coordinated releases of emergency crude reserves by G7 nations.

ISM Services PMI eased to 54.9 in September 2026 from 55.4 in August, signaling continued expansion in the service sector but at a slightly slower pace than expected. While key sub-components like business activity and new orders remained resilient, rising input cost measures indicated persistent inflationary pressures.

The market is also looking forward to the release of the September FOMC minutes for clues on the path of interest rates after soft jobs data reduced October hike odds. Attention will also turn to the early stages of earnings season, ongoing movements in elevated Treasury yields and oil prices, and other data such as jobless claims and consumer sentiment.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$2.94 (+0.07%)
5-Day Change: +$45.80 (+1.11%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,884.61 - $5,595.02
Weighted Alpha: -2.00

Gold has been unable to sustain intraday gains and remains generally defensive in the wake of Friday's weaker-than-expected jobs report. While another rate hike in October is looking less likely, the probability for further tightening before year-end remains elevated, keeping yields and the dollar underpinned.



A breach of last week's low at $4,111.49 would put the $4,106.19 Fibonacci level to the test. If the latter gives way, scope would be for a downside extension to the August low at $4,022.62. Minor intervening barriers are noted at $4,065.84 and $4,043.54. While I still believe the summer low at $3,945.52 will remain intact, amid structural underpinning, confidence in that scenario will erode with each successive breach of support.

On the upside, Friday's high at $4,225.02 must be cleared to return focus to the late-September congestion band around $4,300, where important moving averages have converged. A close above the still-climbing 50-day MA at $4,327.72 is needed to confirm a more favorable short-term tone.

Metals Focus forecasts that despite near-term headwinds from high U.S. inflation and rising interest rates, gold will reach new record highs in 2027 with an annual average price of $5,330. They believe strong investment demand, U.S. debt concerns, persistent geopolitical risks, and sustained central bank buying will remain the key drivers supporting gold.

According to Nikkei Asia, Asian gold-producing countries are taking steps to keep more of their domestic gold supply within their borders following recent price surges. Driven by a mix of "resource nationalism," waning confidence in the U.S. dollar as the global reserve currency, and fears of international sanctions, governments are moving to increase domestic refining, restrict exports through taxes, and build up their central banks' official reserves.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.447 (+2.40%)
5-Day Change: +$0.914 (+1.51%)
YTD Range: $54.778 - $121.630
52-Week Range: $45.563 - $121.630
Weighted Alpha: +8.64

Silver is maintaining intraday gains, but remains within Friday's range. The white metal is displaying comparative strength versus gold amid AI optimism and risk-on sentiment, which has pushed the Nasdaq to new record highs.



A rebound above the 20-, 50-, 100-day moving average complex is needed to take pressure off the downside and shift focus to the late-September highs at $67.513/529 and the more important 9-Sep high at $68.314. The latter is the key to unlock the $70 zone.

Metals Focus (MF) projects silver to strengthen over the next 12 to 18 months by tracking gold higher before eventually outperforming it as renewed price momentum attracts investor interest. They anticipate this growth will be driven primarily by investment demand rather than physical tightness, as weakening demand in physical markets, jewelry, and industrial fabrication caps immediate support.

Friday's low at $59.708 stands in front of the $58.272 Fibonacci level. Below that, the late-July lows at $56.681/583 would be in play.

PGMs

The outlook for platinum remains constructive despite significant volatility this year, which saw prices hit a record high near $2,900 before pulling back. Supply is heavily concentrated in South Africa (with notable contributions from Russia and elsewhere) and has faced persistent constraints from operational challenges, while demand has generally outpaced production in recent years. This has led to multi-year market deficits that have significantly depleted above-ground stocks.

Platinum is currently trading just above $1,700. Looking ahead, even with forecasts of a modest surplus or near-balance in 2026 (partly tied to investment flows), inventories remain critically low (around a few months of demand cover), supporting a constructive longer-term outlook driven by structural supply tightness and resilient industrial/jewelry demand. Metals Focus projects platinum will average $1,930 in 2026 (up 51% year-over-year) and rise further to an annual average of $2,060 in 2027.

The palladium market has shifted from prolonged deficits toward balance or surplus conditions amid rising recycling, production adjustments, and pressure on automotive demand from the gradual shift toward electric vehicles. Prices are currently around $1,170-1,200. The near-to-medium-term outlook is more subdued than platinum’s, with potential for continued softness or range-bound trading as vehicle electrification and thrifting weigh on consumption, though supply disruptions or slower EV uptake could provide some support.

Metals Focus tilts more bullish, expecting strong performance in 2026 – averaging $1,440 – driven by strategic demand, risks surrounding Russian anti-dumping investigations, and potential U.S. mine supply disruptions. However, they anticipate the market will soften and move toward balance in 2027, with annual average prices dropping 7% year-over-year to $1,330.

Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.

Gold and silver fail to sustain initial gains triggered by the NFP miss

Outside Market Developments: U.S. nonfarm payrolls increased by a disappointing 29k in September, well below the consensus estimate of +90k. Backmonth revisions totaled -60k. 

Healthcare and social assistance added roughly 43k jobs, meaning that without this single, publicly funded sector, total private-sector payrolls actually contracted. This underscores how narrowly based and vulnerable the broader labor market may be.

The unemployment rate edged up to 4.2% from 4.1%. Average hourly earnings rose just 0.1% on expectations of +0.3%; +3.0% y/y, versus expectations of +3.1%.

Today’s much weaker-than-expected jobs report dampens the labor market optimism that emerged just a month ago, and tamps down recent hawkish Fed leanings. Fed funds futures reflect further erosion of October rate hike expectations, now at 20.5%, versus 24.4% yesterday and 64.2% a month ago. Implied tightening for the remainder of the year stands at 20 bps.

Treasury yields and the U.S. dollar have pulled back from recent multi-decade and 18-month highs, respectively. Longer term, their direction will hinge on whether subsequent data confirm a sustained cooling in the labor market and inflation, or if resilience reemerges and forces policymakers to continue tightening.



Brent crude eased somewhat, weighed by the weak jobs report, signs of recovering Middle Eastern crude exports and reports that European nations may release strategic fuel reserves to ease supply pressures. However, Brent remains above $100 amid persistent Middle East tensions.

Russian President Putin warned that Moscow would deploy all weapons in its arsenal, including nuclear ones, if the exclave of Kaliningrad or other Russian territory faced a direct attack. Speaking at the Valdai Forum, he framed the remarks as a response to alleged NATO plans to isolate the Baltic region while insisting Russia has no intention of attacking Europe.

Kaliningrad is the headquarters of Russia's Baltic Fleet. The strategically critical ice-free port is separated from mainland Russia and provides Moscow a forward base to project power into northern and central Europe.

Markets are generally tilted toward risk-on on the reduced odds of a near-term Fed rate hike. The dovish surprise from today's NFP lifted equities, with the Nasdaq reaching record highs, as investors anticipate easier financial conditions ahead.

There's a relatively light data calendar next week centered on the U.S. services sector, FedSpeak, and consumer sentiment, alongside ongoing geopolitical and bond-market developments. Chinese markets remain closed for Golden Week, limiting trading activity and reducing liquidity in the early part of the week.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$5.42 (+0.13%)
5-Day Change: -$106.98 (-2.50%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,838.64 - $5,595.02
Weighted Alpha: +0.81

Gold initially rallied on the NFP miss, but gains above $4,200 could not be sustained. Although yields eased today, they remain near levels last seen in 2002, while the dollar index is on track for a third consecutive solid weekly gain. As a result, gold is set to post a second straight weekly decline.



Resistance has been clarified by today's high at $4,225.02, which provides an important intervening barrier ahead of the high for this week at $4,284.54. The latter corresponds closely with the falling 100- and 20-day moving averages. The rising 50-day MA at $4,326.61 must be regained to ease pressure on the downside and suggest potential back to the August high at $4,696.31.

However, at this point, yield and dollar strength remain a significant headwind. A short-term breach of the lows for this week at $4,114.53/$4,111.49 and the $4,106.19 Fibonacci level would shift focus to congestive chart support around $4065/$4,0555.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.067 (+0.11%)
5-Day Change: -$3.391 (-5.27%)
YTD Range: $54.778 - $121.630
52-Week Range: $45.563 - $121.630
Weighted Alpha: +10.23

Silver popped briefly above $62 in the wake of today's jobs report as October rate hike odds eroded and yields and the dollar eased. However, the gains in the white metal could not be sustained, and the market subsequently fell to eight-week lows. Silver is poised for a second straight lower weekly close.



As noted earlier in the week, the drop below $60 leaves the $58.272 Fibonacci level vulnerable to a test. Below that, the 4-Aug low at $58.01 would be in play. Last month's low at $56.583 provides a decent intervening barrier ahead of July's cycle low at $54.778.

Today's intraday high at $62.079 now provides important resistance. If silver can muster a rebound to take out this level, a challenge of Monday's high at $64.289 would become likely. This area is bolstered by the convergence of the 20- and 50-day moving averages.

A climb back above the 100-day MA is needed to ease pressure on the downside and rehighlight the late-September highs at $67.513/529. Above that, the 9-Sep high at $68.314 provides a formidable barrier ahead of the August high at $71.104 and the 200-day MA at $72.961.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.

Gold and silver fail to sustain intraday gains, despite tamer inflation readings

OUTSIDE MARKET DEVELOPMENTS: The PCE price index – the Fed’s preferred inflation gauge – rose 0.3% in August, below expectations of +0.4%, versus +0.1% in July; 3.4% y/y, unchanged from July and below consensus of 3.7%. Annualized core inflation was steady at 3.0% on expectations of 3.4%. The softer-than-expected inflation readings were aided in part by the BEA’s annual methodological revisions.

Personal consumption expenditures rose a robust 0.9% ($190.8 billion), driven by gains in both goods and services spending, while real (inflation-adjusted) PCE increased 0.6% – the strongest monthly advance in about a year. Personal income grew 0.2% and disposable personal income rose 0.3%, leaving the personal saving rate at 4.1%.

The final revision to Q2 GDP showed the U.S. economy grew at a revised 2.2% annualized rate, up sharply from the prior 1.5% reading and above expectations of 1.5%. Stronger consumer spending, business investment, and exports drove growth. Q1 growth was also revised up to 2.5% from 2.1%, painting a more robust picture of economic activity in the first half of the year.

Private-sector employers added 90k jobs in September according to the ADP National Employment Report, above expectations of 70k and a sharp rebound from the downward-revised +36k in August. Strength was concentrated in education/health services and leisure/hospitality. The stronger-than-expected reading points to resilient private hiring and raises the odds that Friday’s BLS nonfarm payrolls report will meet or beat the consensus estimate of 82k.

Evidence of resilient growth alongside cooler inflation takes near-term pressure off the Fed, supporting a more patient policy stance even as inflation remains above the 2% target. Fed funds futures are now suggesting the probability of an October Fed rate hike is down to 37.1% from 50.9% yesterday and 70.9% a week ago. However, the likelihood of at least 25 bps of tightening by year-end, while lower, remains quite high at 88.2%.

Brent crude is trading more than 3% higher today as lingering geopolitical risk from the ongoing conflict with Iran and stalled efforts to reopen the Strait of Hormuz outweigh recent signs of a recovery in Middle East oil exports. Uncertainty around US-Iran negotiations – particularly after President Trump rejected reports of offering sanctions relief – has supported prices, keeping a war-risk premium in the market despite Saudi Arabia’s partial restart of its East-West pipeline and higher regional shipment volumes.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$2.94 (+0.07%)
5-Day Change: -$79.42 (-1.85%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,820.24 - $5,595.02
Weighted Alpha: +1.79

Gold briefly probed above $4,200 in early U.S. trading, lifted by the softer-than-expected PCE inflation data that tempered market bets on another Fed rate hike in October. However, the intraday gains could not be sustained amid still-elevated Treasury yields and a firm dollar. Focus now shifts to Friday's jobs report.



The earlier high at $4,218.99 now provides an additional barrier, along with $4,235.99, ahead of the important 100-, 20-, and 50-day moving averages. Those MA's really need to be regained to ease short-term pressure on the downside and provide some encouragement to the bull camp.

Support is well defined by the $4,111.49/$4,106.19 chart/Fibonacci area. If this zone is violated, a challenge of the August low at $4,022.62 would have to be considered, with potential for tests below $4,000. That being said, I still think the June low at $3,945.52 is likely to contain the downside.

One under-appreciated dynamic in today’s gold market is the divergence between Western investment flows and official-sector demand. While gold is down roughly 25% from its January peak amid elevated real yields and a firm dollar – prompting caution among ETF and speculative investors – central banks have kept buying aggressively.

China alone has reported purchases for 22 consecutive months (with actual buying likely higher than official figures), and global central-bank demand remains well above pre-2022 averages. This sovereign accumulation, driven more by reserve diversification and geopolitical risk management than by short-term rate expectations, is quietly providing a structural floor for the market.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.674 (-1.10%)
5-Day Change: -$3.314 (-5.14%)
YTD Range: $54.778 - $121.630
52-Week Range: $45.563 - $121.630
Weighted Alpha: +10.77

Silver has fallen to fresh eight-week lows, despite more moderate inflation readings this morning, as the broader macro backdrop (high yields, strong dollar) continues to dominate. Higher borrowing costs can slow manufacturing, capital spending, and investment in silver-intensive sectors such as solar, electronics, and EVs, thereby weighing on industrial demand for the metal.



With silver setting new lows and below key moving averages, tests below $60 are increasingly likely. Such a move would encourage a challenge of the $58.272 Fibonacci level. Below that, the 4-Aug low at $58.01 would be in play. Last month's low at $56.583 provides a decent intervening barrier ahead of July's cycle low at $54.778.

Today's earlier high at $61.703 now protects the previous range lows at $62.331/346. A move back into the range that held for most of September would bode well for a challenge of the key moving averages (50, 20, 100), which are converging above $64.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.

Gold and silver tumble on hawkish Fed expectations, firm yields and dollar

Outside Market Developments: President Trump rejected Iran’s latest proposal related to reopening the Strait of Hormuz and ending the conflict. While there have been indications that talks would continue this week, oil starts the week on the bid.

The rebound in oil is keeping inflation concerns and expectations for further Fed tightening elevated. Last week's hawkish FedSpeak is certainly contributing to those expectations and rising yields. More Fed speakers are on tap for this week, and the tone will likely be similarly hawkish.

Fed funds futures put the probability of an October rate hike at 65.9%, versus 64.2% on Friday, 57.6% a week ago, and 17.7% a month ago. The probability of at least one 25 bps rate hike before year-end remains above 90%.

The Fed's favored measure of inflation comes out on Wednesday. Headline PCE inflation for August is expected to hold steady at 3.7%. Core inflation is expected to edge up to 3.4%, from 3.3% in July.

The trade will also be focused on the September jobs report on Friday. The consensus estimate is +84k nonfarm payrolls. The jobless rate is anticipated to remain unchanged at 4.1%.

Five men were arrested early Sunday near RAF Fairford in England on suspicion of planning a terrorist attack with explosives after suspicious vans were reported approaching the base, which the U.S. has used for strikes on Iran. A local tip-off led to the arrests; investigators are probing a possible Iranian link.

Iran’s embassy in the UK has categorically rejected and strongly condemned any claims of its involvement as unfounded and malicious speculation. However, counter-terrorism police are pursuing “multiple new lines of enquiry.” Security has been raised to the highest level at RAF Fairford, and elevated at other sites as well. The UK’s national threat level remains SEVERE.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$130.24 (-3.04%)
5-Day Change: -$177.96 (-4.10%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,760.05 - $5,595.02
Weighted Alpha: +0.37

Gold has tumbled to seven-week lows amid expectations of another Fed rate hike, which are buoying yields and the dollar. The lack of diplomatic progress last week toward reopening the Strait of Hormuz has caused oil to rebound, raising inflation concerns.



Today's breach of chart/Fibonacci support at $4,235.99/$4,232.32 triggered stop losses, clearing the way for a challenge of the next Fibonacci level at $4,106.19 (78.6% retrace of the late-summer rally). Below the latter, congestive chart support around $4065/$4,0555 would be the likely attraction.

With the yellow metal well below the important moving averages, the downside is indeed looking vulnerable. However, haven interest from elevated geopolitical tensions and the very inflation worries that are driving yields and the dollar higher should provide some underpinning ahead of the June low at $3,945.52.

India’s weak monsoon season could reduce gold demand during the festival/wedding season. Current monsoon rainfall is around 15% below average, highlighting negative implications for crop yields and farm incomes."Rural consumers account for over half of Indian gold demand, reflecting gold’s long-standing role as a store of wealth in areas where access to financial products has historically been more limited," according to the Heraeus Precious Appraisal.

Global ETFs saw net outflows of 1.6 tonnes, ending the string of consecutive weekly inflows at eleven. It was the first net outflow since the week ended 3-Jul.

A short-term climb back above the key moving averages is needed to take pressure off the downside and reinforce the notion that the low for the year was established in June. Intervening resistances are found at $4,235.99 and today's overseas high at $4,284.54.

Sustained central bank buying (especially from emerging markets seeking reserve diversification) and elevated global debt levels, which raise questions about fiat currency stability, are long-term supportive factors. Persistent geopolitical risks and gold’s role as an inflation and crisis hedge further underpin its structural demand beyond short-term rate and dollar pressures.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$1.863 (-2.78%)
5-Day Change: -$4.456 (-6.75%)
YTD Range: $54.778 - $121.630
52-Week Range: $45.563 - $121.630
Weighted Alpha: +11.89

Silver is extending last week’s losses to plumb seven-week lows, pressured by hawkish Fed expectations along with the resulting strength in yields and the dollar. The white metal has fallen more than 4% to begin the new week.



With the $61.015 Fibonacci level negated, tests below $60 must be considered. The next tier of Fibonacci support comes in at $58.272. Below that, challenges of the August low at $56.583 and the cycle low from July at $54.778 would have to be considered.

The rising 50-day moving average at $63.866 must be regained to set up further consolidation within the recent range. Secondary resistance is marked by today's overseas high at $64.289 and stands in front of the falling 20- and 100-day moving averages.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.