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Gold $2,334.42 $1.13 0.05% Silver $30.37 $0.04 0.13% Platinum $1,032.04 $3.11 0.3% Palladium $978.00 $12.91 1.34%
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Blog posts of '2023' 'July'

Grant on Gold – July 31, 2023
Monday, July 31, 2023

Gold is consolidative just below the midpoint of the May-June range as the market assesses the implications of last week’s Fed rate hike and better-than-expected economic data. The yellow metal ends July with a gain of 2.4%, breaking a 2-month losing streak.

Spot Gold Daily Chart through 7/31/2023
Spot Gold Daily Chart through 7/31/2023

Last week the Fed hiked rates by 25 bps, and it was widely accepted it would be the last one for some time. However, on Thursday Q2 advance GDP came in at 2.4%, above expectations of 1.9%. In addition, durable goods orders surged 4.7% in June, well above market expectations of 1.8%.

These robust data are evidence that the U.S. economy continues to hum along at a respectable pace, despite the marked rise in interest rates over the past 16 months. More hawkish members of the Fed could now conceivably argue there is room for another rate hike. Fed funds futures are currently showing a 20% probability for a 25-bps hike in September.

While the Fed’s favored measure of inflation cooled to 4.1% in June, versus 4.6% in May, there are lingering worries in the market that a second wave of inflation could be in the offing. The national average for a gallon of regular gas jumped 13¢ last week reaching an 8-month high.

I’m often asked why gold didn’t fare better during this inflationary period. The answer lies in the Fed’s aggressive response in raising the Fed funds rate by 525 bps in just over a 1-year period. During that time, gold only corrected 22%, from $2070.63 (just shy of the all-time high) to $1614.92.

Most of those corrective losses have already been retraced, so I would argue that gold held up remarkably well in the face of the most aggressive tightening campaigns in recent history.

The long-term trend remains bullish with the market trading less than $110 off the all-time high. Setbacks into the range are likely to be viewed as buying opportunities.

Silver

Silver closed down more than 1% last week, weighed by persistent concerns that the health of the Chinese economy, and an uptick in the probability of another Fed rate hike in September.

Spot Silver Daily Chart through 7/31/2023
Spot Silver Daily Chart through 7/31/2023

A firmer tone emerged over the past two sessions on the heels of strong U.S. and Japanese data. While the Chinese economy continues to show signs of weakness, the government announced supports for light industry on Friday and then measures to boost consumer spending on Monday.

Such stimulus offers support for both precious and industrial metals. If the Chinese economy continues to struggle, additional (and larger) stimulus would be likely, providing underpinning for the metals.

I like that the 20-day SMA successfully contained the downside last week. Renewed tests above $25 would bode well for a retest of the high from July 20 at $25.27. Penetration of the latter would clear the way for a challenge of the highs for the year at $26.09/14.

PGMs

Platinum fell 2.8% last week, notching a second consecutive lower weekly close. A fresh 2-week low was set on Monday before the market snapped back to close nearly 2% higher on the day.

Spot Platinum Daily Chart through 7/31/2023
Spot Platinum Daily Chart through 7/31/2023

The outside day with a higher close bodes well for upside follow-through on Tuesday. Strong economic data from the U.S. and Japan, along with Chinese stimulus are supportive factors.

The longer-term supply and demand dynamics remain broadly supportive. Dips into the range are likely to be viewed as buying opportunities.

Palladium has been corrective to consolidative over the past several weeks. While a short-term bottom may be in place at $1185.18, the trend remains bearish.

 

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.

Zaner Daily Precious Metals Commentary
Monday, July 31, 2023

Despite favorable internal demand news, the #gold market starts off under pressure from strength in the #dollar and signs of higher global interest rates.

While comments from a Chinese state planner indicating they will push for an expansion of household consumption sounded like the 6th stimulus announcement, that news combined with a slight improvement in Japanese manufacturing PMI readings for July should have been more supportive of gold, #silver, and many physical commodities.

Unfortunately for the bull camp gold ETF holdings last week fell by 329,000 ounces with a decline on Friday of 50,383 ounces putting year-to-date holdings down 2.3%...[MORE]

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Gold set for monthly gain on bets for cenbanks' dovish turn
Monday, July 31, 2023

July 31 (Reuters) - Gold pared losses and was poised for its best month in four on Monday as top central banks switch to a more cautious posture about further moves in their year-long round of global monetary tightening.

Spot gold was unchanged at $1,959.50 per ounce by 1132 GMT after slipping as much as 0.5% earlier. U.S. gold futures ticked 0.1% lower to $1,959.30...[LINK]

Morning Call
Monday, July 31, 2023
Good morning. The precious metals are higher in early U.S. trading.
 
Quote Board
 
U.S. calendar features Chicago PMI, Dallas Fed Index, FedSpeak from Goolsbee.
 
 
Zaner Daily Precious Metals Commentary
Friday, July 28, 2023
The gold and silver markets look to finish the week with a downward tilt following US data displaying a stronger-than-expected US economy.
 
In other words, surprisingly strong US data reversed the downward track in the dollar from earlier in the week and pushed up interest rates, and could have pushed the pendulum toward a US rate hike in September.
 
Unfortunately for the bull camp, the passing of the latest US and European rate hikes failed to provide a relief/pause in the headwinds from monetary policy tightening...[MORE]
 
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Gold heads for weekly loss on strong US economic data
Friday, July 28, 2023

July 28 (Reuters) - Gold regained some ground on Friday as the dollar retreated, but still headed for its worst week in five after data pointing to a resilient U.S. economy soured bets for a dovish tilt in U.S. monetary policy.

Spot gold rose 0.6% to $1,956.69 per ounce by 1133 GMT, up from its lowest since July 12. U.S. gold futures gained 0.5% to $1,955.70...[LINK]

Morning Call
Friday, July 28, 2023
Good morning. The #preciousmetals are mostly higher in early U.S. trading.
 
Quote Board
 
U.S. calendar features ECI, Person Income, PCE, Michigan Sentiment, Ag Prices.
Zaner Daily Precious Metals Commentary
Thursday, July 27, 2023
With a noted decline in the US dollar overnight the gold and silver markets have been provided with fresh oxygen, and the bull camp has been given added confidence to extend yesterday's recovery.
 
Unfortunately for the bull camp, gold ETF holdings yesterday saw an outflow of 2,627 ounces, the 3rd straight day of outflows and ETFs have now seen net sales on the year of 2.02 million ounces.
 
Similarly, silver ETF holdings saw an outflow of 1.1 million ounces bringing the year-to-date "net sales" to 17.4 million ounces...[MORE]
 
Please subscribe to receive the full report via email by clicking here.
Gold flirts with 1-week peak as ECB rate verdict looms
Thursday, July 27, 2023

July 27 (Reuters) - Gold hovered near a one-week high on Thursday as the dollar slipped on renewed expectations that an end to the Federal Reserve’s interest rate cycle was on the horizon, with focus on the European Central Bank’s impending decision.

Spot gold rose 0.3% to $1,977.19 per ounce by 1204 GMT, after earlier hitting its highest since July 20. U.S. gold futures were up 0.4% to $1,977.70...[LINK]

Morning Call
Thursday, July 27, 2023
Good morning. The precious metals  are mixed in early U.S. trading.
 
U.S. calendar features Q2 GDP Advance Report, Durable Orders, Goods Trade, Initial Jobless Claims, Pending Home Sales Index.