Blog posts of '2025' 'January'

Gold nears record territory as Trump's "demand" for lower interest rates hits dollar

OUTSIDE MARKET DEVELOPMENTS: President Trump addressed the WEF via video on Thursday and took questions from the audience. A lot of ground was covered in less than an hour, but Trump's general message was that America is back and will come first during his time in office.

“My message to every business in the world is very simple: Come make your product in America, and we will give you among the lowest taxes of any nation on Earth. But if you don’t, you will have to pay a tariff,” he declared.

He took the EU to task for its trade surplus with the U.S., its oppressive regulatory environment, and insufficient defense spending. Trump suggested that 5% of GDP is a more appropriate level of defense spending for NATO members than the current 2% threshold.

The President touted his good relationship with China's Xi Jinping. "[W]e always had a great relationship, I would say, and we look forward to doing very well with China and getting along with China," he said.

While unhappy with the current balance of trade with China, Trump made an overture to Beijing to strike a deal. "All we want is fairness. We just want a level playing field. We don’t want to take advantage," he said.

Trump had a contentious relationship with the Fed during his first term and it appears that will be the case this time around as well. “I’ll demand that interest rates drop immediately,” pledged Trump.

The Fed however is not obligated to acquiesce to that demand. President Trump picked Jerome Powell to succeed Janet Yellen as Chairman of the Fed during his first term. The two spent the latter half of that first term at odds over monetary policy.

Powell had previously vowed to serve out his term, which ends in May 2026. It's unclear if the President has the legal authority to fire the Fed Chairman.

Nonetheless, U.S. yields and the dollar fell in reaction to Trump's comments. In the same way the Fed jawbones markets to achieve its aims, the President also has that power and is not afraid to use it.

While the dollar index fell to a five-week low, Fed funds futures moved minimally. The market is still pricing in steady Fed policy until mid-year.

The BoJ raised the policy rate by 25 bps to 0.5%, as was widely expected. That's still a relatively low rate, but it is the highest Japan has seen since 2008. Governor Ueda signaled that further hikes are in the offing.

The Monetary Authority of Singapore eased for the first time in nearly five years, amid moderating inflation and heightened trade concerns. 

S&P Global Flash Manufacturing PMI rose to 50.1 in January, above expectations of 49.7, versus 49.4 in December. It's the first foray into expansion territory since last June.

S&P Global Flash Services PMI tumbled to a nine-month low of 52.8 in January, below expectations of 56.5, versus 56.8 in December. Despite the setback, the services sector has been in expansion for nearly two years.

Existing Home Sales rose to 4.240M in December, above expectations of 4.165M, versus 4.150 in November. While home sales accelerated in Q4'24, the market continues to be weighed by tight supply and high mortgage rates.

Michigan Sentiment (final) was revised down to 71.1 in January, below expectations of 73.5, versus a preliminary read of 73.2 and an eight-month high of 74.0 in December.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$22.02 (+0.80%)
5-Day Change: +$78.30 (+2.90%)
YTD Range: $2,607.16 - $2,782.51
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +35.54

Gold has approached the $2,789.68 record high after President Trump's "demand" for lower interest rates pushed yields and the dollar lower. The President's bellicose tone has also stoked safe-haven interest in the yellow metal.

 

Gold has traded higher in four of five sessions this week and appears poised for a weekly gain of more than 2.5%. It will be the fourth consecutive weekly gain.

While gold has yet to punch through to new all-time highs, the wind appears to be at the market's back. An eventual breach of $2,789.68 would shift focus to the $2,857.21 Fibonacci target initially. Beyond that, the $2,936 measuring objective, and the $3,000 psychological barrier attract.

The World Gold Council released its latest Gold as a Strategic Asset report. The report highlights gold's positive impact as a component of a well-diversified portfolio. 

"Gold’s traditional role as a safe-haven asset means it comes into its own during times of high risk. But its dual appeal as an investment and a consumer good means it can generate positive returns in good times too. This dynamic is likely to continue, reflecting ongoing political and economic uncertainty, and economic concerns surrounding equity and bond markets."

Improved investor interest was reflected in last week's surge in ETF inflows. I suspect we'll see positive ETF inflows this week as well.

The weaker dollar may also spark increased demand in Asia ahead of the Lunar New Year, which falls on 29-Jan. Gold is considered an auspicious gift in much of Asia, conveying a wish for luck and wealth in the new year.

On the downside, former resistance at $2,719.75/$2,714.94 marks first support. Below that, today's intraday low at $2,690.08 protects the more important $2,666.04/$2,657.28 zone where the 20-day moving average corresponds closely with Thursday's low.

Silver rebounded from yesterday's sell-off spurred by fresh gains in gold, a weaker dollar, and President Trump's softer tone on trade with China. While the white metal ticked briefly above $31, those gains could not be sustained.



While silver is poised for a weekly gain of more than 1%, convincing penetrations of the 100-day moving average at $30.965 and $31.00 are needed to set a more favorable tone. An additional tier of resistance is marked by the 20-week moving average at 31.108.

I continue to think that fresh record highs in gold will drag silver decisively above $31. However, $32 must be regained to truly reinvigorate the bull camp.

The Chinese National Energy Administration reported a record surge of 45.2% in total installed solar capacity in 2024 to 887 GW. China Daily reported that global consultancy Rystad Energy "expects China's solar sector to continue breaking records in the coming years."

That's good news for silver bulls, even as President Trump walks back renewable energy mandates in the U.S.

Initial support is found at $30.442/$30.398 where today's low corresponds with the 50-day moving average. A breach of this level would leave the market vulnerable back to key chart/MA support around $30.


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 consolidates recent gains while silver pressures the weekly low

OUTSIDE MARKET DEVELOPMENTS: President Trump is scheduled to appear virtually at the World Economic Forum today at 11:00 am EST. The annual meeting held in Davos Switzerland began on inauguration day and undoubtedly President Trump has been a hot topic of discussion.

The speech should be entertaining, and reportedly a question and answer session will follow. When asked about Trump, Botswana's President Duma Boko summed him up nicely: "He engages in what we would regard as robust diplomacy." I think it was meant as a compliment.

Boko went on to suggest that Trump's rhetoric should not be taken literally, but should be taken seriously. "He will take pragmatic decisions," he said.

The EU is already signaling a willingness to address its trade imbalance with the U.S. to ward off tariffs that would adversely impact the Continent's already flagging economy. European Commission EVP Valdis Dombrovskis said he is open to discussing increased energy and weapons purchases.

The ECB, BoE, and BoC all appear poised for further rate cuts at their next meetings amid heightened growth risks. Meanwhile, the Fed is widely expected to hold steady when the FOMC meets next week.

Norges Bank held steady today but signaled a cut is probably on tap for March. The BoJ is expected to hike its policy rate by 25 bps tomorrow to 0.5%. 

Fed funds futures continue to suggest the next Fed rate cut won't happen until June or July. However, there are increased rumblings that the Fed's next move could be a hike if Trump's trade policies re-stoke inflation. "I think rate hikes are possible," said BNY CEO Robin Vince at the WEF.

The dollar has retreated from its highest levels in over two years this week, but interest rate differentials will continue to underpin the greenback. The underlying trend remains bullish.

Initial Jobless Claims rose 6k to 223k in the week ended 18-Jan, above expectations of 215k, versus 217k in the previous week. Continuing jobless claims surged 46k to a three-year high of 1,899k in the 11-Jan week from 1,853k in the previous week.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$4.05 (-0.15%)
5-Day Change: +$25.73 (+0.95%)
YTD Range: $2,607.16 - $2,763.00
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +32.79

Gold has eased from Wednesday's 12-week high, but even this modest setback has attracted some buying interest. While the well-defined $2,789.68/$2,541.42 range is intact, further attacks on the upside are favored amid persistent uncertainty associated with President Trump's agenda.



An eventual move to new all-time highs would clear the way for an upside extension to a Fibonacci target at $2,857.21. Beyond that, the $2936 measuring objective and the long-standing $3,000 target attract.

From a technical perspective, the 20-day moving average has bounced smartly off the 100-day. It appears that the 50-day is going to hold above the 100-day as well.

ETF inflows were solid last week, and I think further inflows this week will be confirmed as well. This is also true of net speculative long positions in the futures market.

Ross Norman of Metals Daily says the massive flow of physical gold from London to New York and the attendant surge in lease rates triggered short-covering, which contributed to gold's recent rally. "The possibility that gold and silver imports might incur a significant additional cost, New York dealers are asking for physical delivery," said Norman in a post.

Norman believes that if gold tariffs don't materialize, "then likely that metal will come home to London over the next few months." But what if the Trump administration doesn't provide clarity on tariffs, or tariffs are imposed? I think that would prompt London bullion banks to go to the market to rebuild loco London stocks.

The developing overbought condition noted earlier in the week is still seen as a potentially limiting factor. While the dollar has been under modest pressure this week, the underlying trend remains bullish and a headwind for gold.

Today's earlier low of $2,738.11 now defines initial support. More important supports are at $2,705.15/$2,700.00 and $2.690.08 (Monday's low).

Silver tumbled in early U.S. trading to pressure the low for the week at $30.141 as global growth risks and tariff uncertainty continue to weigh on industrial metals. The failure to climb back above $31 this week leaves the downside vulnerable.


 
The white metal is back below the 50-day moving average and a convincing breach of $31.141 would clear the way for tests of the 20-day and 200-day MAs which are both at $30.047 today. A move below $30 would bring the  $28.802/783 double bottom back in focus.

The highs from the last two weeks at $30.945 and $30.956 reinforces the significance of the 31-handle. A trade above $31 is needed to set a more neutral near-term tone and $32 must be cleared to revive interest in the long-term uptrend.


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.

Good morning. The precious metals are mostly lower in early U.S. trading.

U.S. calendar features Initial Jobless Claims, Chicago Fed Index, EIA Data.

Gold moves within 1% of record territory, but silver holds below $31

OUTSIDE MARKET DEVELOPMENTS: 

President Trump will remain in the spotlight – and a hot topic at the World Economic Forum in Davos – as his policy agenda is set in motion. Trump's priorities this week have been border security, immigration, energy, reducing the size of government, and trade. 

The President seemed to temper some tariff threats since his inauguration but amplify others. The latest tariff number associated with China is 10%, much more modest than the 60% figure floated during the campaign.

The Canadian dollar and Mexican peso were hit hard by Trump's pledge to impose sweeping 25% tariffs on Canada and Mexico on February 1. Outgoing Canadian Prime Minister Trudeau seemed confident that a deal would be reached, yet there are rumblings of retaliatory tariffs.

“If the American economy is going to see the boom that Donald Trump is predicting they are going to need more energy, more steel and aluminum more critical minerals, more of the things that Canada sells to the United States every single day,” reminded Trudeau.

Mexican President Sheinbaum noted that the America First Trade Policy memorandum signed on Monday references a free trade agreement signed during Trump's first term. That agreement remains in effect and has clear processes for addressing disputes.

Trump also has the EU in his sights warning that they are "very, very bad to us. So they’re going to be in for tariffs." The EU's commissioner for the economy said, “If there is a need to defend our economic interests, we will be responding in a proportionate way.”

The ongoing rhetoric and inconsistent messaging continue to stoke uncertainty and worries about a trade war. Nonetheless, risk appetite remains elevated.

MBA Mortgage Applications rose a scant 0.1% in the week ended 17-Jan, following a 33.3% surge in the previous week. The 30-year year mortgage rate slipped to 7.02%, from 7.09%. It was the first decline in six weeks.

Leading Indicators fell 0.1% in December, in line with expectations, versus a positive revised +0.4% in November (was +0.3%). "Low consumer confidence about future business conditions, still relatively weak manufacturing orders, an increase in initial claims for unemployment, and a decline in building permits contributed to the decline," according to The Conference Board. The LEI's trend since the 2021 high belies the notion of U.S. economic resilience.

GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$11.80 (+0.43%)
5-Day Change: +$60.38 (+2.24%)
YTD Range: $2,607.16 - $2,763.00
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +33.89

Gold extended to set a 12-week high at $2,763.00 in overseas trade, helped by a defensive dollar. Suddenly the yellow metal is less than 1% off its all-time high.



Assuming a higher close today, gold will have posted gains in 15 of the past 23 sessions going back to 19-Dec. While the market is becoming overbought, there's all the significant resistances standing in front of the record high have been negated.

There continues to be market chatter about the massive inflows into Comex vaults. "Gold inventories on COMEX have swelled by more than 6 moz since the beginning of December, including additions of 676 koz last Wednesday which was the largest one-day addition of all time. Implied lease rates for very short-term gold lending are also very high, implying that liquidity on a less than one-month delivery is very tight," wrote Heraeus in a note.

Tight liquidity in market centers that sent ounces to the U.S. should continue to underpin the price. If those centers ultimately look to rebuild their stocks by buying on the open market, that could send gold to $3,000 and beyond.

Once new highs have been established, the next upside target would be $2,857.21 based on a Fibonacci projection. Further out, the $2,936 measuring objective off the symmetrical triangle breakout comes into play.

Setbacks into the range are likey to be viewed as buying opportunities. Today's Asian low at $2,742.63 should keep the more important $2,700 zone at bay.

Silver remains narrowly confined below $31, shrugging off the latest round of gains in gold. Trade worries are a headwind, but gold's strength and the soft dollar are providing some underpinning.

 

Last week's high at $30.892 corresponds closely with the 100-day moving avrerage at $30.916, preventing a move above $31. It's likely that there are some stops above $31, so a conving penetation could trigger gains back to $32.

That actually becomes the favored scenario upon new record highs in gold. A move above $32 would revive conficence in the underlying uptrend, but the December highs at $32.255/306 are seen as a formidble barrier.

Failure to clear $31 in short order would leave the white metal vulnerable back to the $30.141/$30.00 zone.


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.

Good morning. The precious metals are mostly higher in early U.S. trading.

U.S. calendar MBA Mortgage Applications, Leading Indicators.

Gold jumps to 11-week highs, while silver edges back toward $31

OUTSIDE MARKET DEVELOPMENTS: With an empty economic calendar today, markets are keeping a wary eye on Trump 2.0. President Trump signed dozens of executive orders on Monday and more are in the offing today.

Trump's second term begins with the U.S. economy on sound footing, certainly compared to other major economies. The President's "America first" agenda has arguably stoked some level of additional optimism and hence risk appetite. However, there's also a fair amount of uncertainty associated with Trump's policies, driving some hedging of bets.

The trade is particularly keen to discern the inflationary implications of Trump's trade policies and weigh that against the potentially disinflationary impact of his energy policies. Oil prices fell more than 1% on Monday and are off another 1% today.

Trump indicated he would not impose tariffs immediately but would direct federal agencies to first study existing trade policies before making decisions. While he did target Canada and Mexico for 25% tariffs beginning 01-Feb, this may primarily be to illicit help in controlling the borders.

Trade policies that seek to make the U.S. less dependent on imports are undoubtedly prompting our trading partners to find ways to be less dependent on U.S. consumers. That's a heavy lift to be sure, but it may ultimately accelerate the ongoing de-dollarization trend.

Less trade with the U.S., fewer dollars in foreign hands, and less overseas demand for Treasuries. That could provide an additional lift to interest rates.

Post-inauguration focus is shifting to next week's FOMC meeting and PCE data. Fed funds futures currently suggest the next rate cut won't happen until June. That may change when the Fed's favored measure of inflation comes out on 31-Jan.

Russian President Putin said he's open to discussions with President Trump on Ukraine. "We are also open to dialogue with the new US administration on the Ukrainian conflict," Putin said. "I want to emphasize that its goal should not be a brief truce... but a lasting peace," he added.

In the Middle East, the ceasefire between Israel and Hamas is holding. The exchange of hostages and prisoners is ongoing.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$16.46 (+0.61%)
5-Day Change: +$49.45 (+1.85%)
YTD Range: $2,607.16 - $2,731.03
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +31.89

Gold has risen to 11-week highs helped by yields and the dollar which continue to trade off their recent highs. The yellow metal is trading higher for a fourth straight week. While overall risk appetite remains elevated, uncertainty about the implications of the Trump administration's policies is driving some haven interest.



The convincing breach of $2,723.79/$2,724.09 cleared the way for a challenge of the $2,736.55 Fibonacci level (78.6% retrace of the decline from  2,789.68 to $2,541.42). Today's penetration of the latter clears the way for a retest of the all-time high at $2,789.68.

The breakout of the symmetrical triangle pattern bodes well for the eventual attainment of the $3,000 objective. An intervening measuring objective is noted at $2.936.

The threat of tariffs has been straining the gold supply chain since last month. The potential for tariffs has led to millions of ounces of gold being transferred from London to CME warehouses. I've seen figures as high as 6Moz.  

Citing an "RBC expert," Umicore reports that "London vaults are emptier than they have been in living memory." That same expert noted the largest single-day Comex inflow in history.

The resulting liquidity squeeze in London has led to gold lease rates reaching levels not seen in decades. Such dislocations tend to be short-lived.

However, with little left in London's coffers and ongoing uncertainty about tariffs, the current conditions could persist for some time. If the millions of ounces already transferred to Comex are here to stay, the bullion banks may turn to the market to rebuild London stocks, providing additional bullish impetus.

The 14-day RSI is currently at three-month highs and the developing overbought condition could keep the high end of the range protected initially. However, setbacks are likely to be viewed as buying opportunities.

Silver is trading higher for a second day, buoyed by 11-week highs in gold and a soft dollar. Optimism about the U.S. economy stemming from President Trump's 'America first' agenda is counterbalanced by growth risks elsewhere in the world and heightened trade worries.



Resistance at $30.892/$31.00 remains intact thus far. This area is highlighted by the 100-day moving average and last week's highs. I've been maintaining for some time, that $31 must be regained to set a more neutral tone and $32 needs to be cleared to revive interest in the underlying bull trend.

The $32 level would become increasingly attractive with fresh record highs in gold.

Like with gold, large physical silver transfers from London to Comex have been seen to avoid potential tariffs. Estimates suggest those flows are in excess of 20Moz.

As I suggested in today's gold commentary the transferred ounces to the U.S. may be here to stay. If London seeks to rebuild stocks, it could provide a significant tailwind for the market.

Failure to sustain gains above the 50-day moving average at $30.392, would leave silver vulnerable to further tests below the 200-day at $30.025. Key support is well defined by the double bottom at $28.802/783.


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 higher in thin holiday trade, awaiting Trump's return to the White House 

OUTSIDE MARKET DEVELOPMENTS: U.S. markets are closed today in observance of the Martin Luther King Jr. holiday. Today is also inauguration day.

This week, the market's focus will be on Donald Trump's return to the White House and his initial actions on the border, immigration, and trade. However, risk-on sentiment prevails.

Treasury Secretary Janet Yellen sent a letter to congressional leaders on Friday saying "extraordinary measures" will be deployed on Tuesday this week to prevent the debt ceiling from being reached. Trump has expressed interest in eliminating the debt ceiling. The national debt is currently a staggering $36.4 trillion.

The ceasefire between Israel and Hamas went into effect yesterday. The exchange of hostages and prisoners has begun.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$5.52 (+0.20%)
5-Day Change: +$44.60 (+1.67%)
YTD Range: $2,607.16 - $2,724.09
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +30.65

Gold is trading modestly higher in thin holiday trading. Liquidity will diminish after the London close but trading should be active when Tuesday's Asian session begins this afternoon and the market starts to digest the early hours of the Trump administration.


 
The yellow metal set a ten-week high at $2,724.09 on Friday. A more convincing breach of the previous high at $2,723.79 (12-Dec) would bode well for a test of the $2,736.55 Fibonacci level (78.6% retrace of the decline from  2,789.68 to $2,541.42). 

Global ETFs saw net inflows of 19 tonnes last week, led by strong interest from European investors (15.9 tonnes). It was the largest net inflow in 13 weeks.

The CFTC's COT report for the week ended 17-Jan revealed an increase of 24.5k to 279.4k contracts, versus  254.9k in the previous week. That's a 12-week high in net speculative long positioning.

The increase in investor interest bodes well for a challenge of the all-time and range high at $2,789.68.  Further out, there is a measuring objective at $2.936, and $3,000 remains attractive as well.

The overseas low at $2,690.08 marks initial support. Secondary support at $2,657.28/$2,656.10 protects the more important convergence of the 20-, 50-, and 100-day moving averages at  $2,6454.23/$2,644.58/$2,642.22.

Silver is trading higher in thin holiday trade, but action is confined to the lower half of Friday's range. The inability of silver to sustain gains above the 100-day moving average and regain $31 last week leaves the downside vulnerable.



Global growth risks remain the greatest headwind for industrial metals such as silver. A retreat below the 200-day moving average at $30.011 would leave the $28.802/783 double bottom vulnerable to a retest.

Last week's COT report showed net speculative long positioning rose 5.2k to an eight-week high of 46.1k contracts, versus 40.9k. It was the biggest jump in net spec longs since the week of 25-Oct'24.

CFTC Silver speculative net positions

Silver must regain $31 to set a more neutral near-term tone. Last week's high at $30.956 reinforced this level. Today's overseas high at $30.565 provides an additional intervening barrier.


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.

1/17/2025

Gold consolidates above $2,700, while silver retreats from in front of $31

OUTSIDE MARKET DEVELOPMENTS: Israel and Hamas reportedly have finalized the ceasefire and hostage release deal. This dials back geopolitical risks in the region, but have no illusions, this is not a peace deal.

Geopolitical tensions overall remain high in the Middle East with Israeli hawks worried that the ceasefire will allow Hamas to regroup. Iran and its various proxies, along with the political upheaval in Syria, are seen as destabilizing.

The war between Russia and Ukraine intensified this week with Ukraine firing more U.S. and UK-supplied advanced missiles into Russia. The Kremlin retaliated with its own "massive" missile and drone attacks that targeted Ukrainian infrastructure.

China continues to act aggressively toward its neighbors in the South China Sea. A Philippine security official said this week that Chinese aggression is "pushing us to the wall."

President-elect Trump said he spoke with President Xi of China earlier today and covered many topics. While China's antagonism of Taiwan, the Philippines, Japan, South Korea, and others was not specifically mentioned, Trump said that he and Xi "will do everything possible to make the World more peaceful and safe!"

Time will tell if Trump can work with world leaders to further mitigate geopolitical tensions. I feel like there's some optimism on that front.

China claims it met its 5% growth target in 2024, led by exports. The threat of tariffs prompted many U.S. companies to accelerate their purchases of Chinese goods to build inventory. However, the ongoing property crisis leaves domestic demand weak and many Chinese feel worse off.

The IMF nudged up its 2025 global growth rate projection to 3.3% from 3.2% based largely on bullish expectations for the U.S. economy. They forecast the U.S. economy will grow at a 2.7% pace, +0.5% from their previous forecast.

The BoJ is widely expected to raise rates next week. This expectation has added some weight to the dollar.

This week's focus was on U.S. inflation data and the implications for Fed policy. The data were mixed, but the market assessed that inflation is sufficiently benign to allow for 50 bps in additional easing this year. Fed funds futures suggest that the next cut likely won't happen until June.

Next week's highlight is going to be Trump's inauguration on Monday and his initial raft of executive orders. Inauguration Day corresponds with the Martin Luther King Jr. Day holiday. U.S. markets and banks will be closed.

Housing Starts surged 15.8% to 1.499M in December, above expectations of 1.320M, versus a positive revised  1.294M in November (was 1.289M). Permits slipped 0.7% to 1.483M. Completions eased 3.6% to 1.544M.

Industrial Production rose 0.9% in December, above expectations of +0.3%, versus a positive revised +0.2% (was -0.1%). Cap utilization accelerated to 77.6%, above expectations of 77.0%, versus 77.0% in November,


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$5.59 (-0.21%)
5-Day Change: +$18.62 (+0.69%)
YTD Range: $2,607.16 - $2,724.09
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +30.60

Gold has retreated from Thursday's ten-week highs, consolidating gains registered earlier in the week. Nonetheless, the yellow metal is poised for a third consecutive higher weekly close and is up nearly 4% year-to-date.



Gold was helped this week by revived rate cut expectations, which knocked yields and the dollar off their recent highs. Ultimately, a ten-week high was established at $2,724.09.

A more convincing breach of the previous high at $2,723.79 (12-Dec) would bode well for a short-term challenge of the all-time and range high at $2,789.68. The $2,736.55 Fibonacci level offers an intervening barrier.

Further out, there is a measuring objective off the symmetrical triangle breakout at $2.936. Beyond that, I still think we could see $3,000 before the end of Q1.

Gold outperformed all major asset classes in 2024 at +27.2%. Its closest competitor was U.S. large-cap shares at +23.3%. While BitCoin rose 120.8% last year, its market cap and total number of investors remain relatively small.

It would be good to see confirmation of revived ETF inflows and an increase in net spec long positioning on Monday. For now though, that $2,789.68/$2,541.42 range remains intact.

Initial support at $2,700.00/$2,697.07 has contained the downside thus far. Additional support tiers are noted at $2,691.47 and $2,657.28/$2,656.10. The convergence of the 20-, 50-, and 100-day moving averages at  $2,648.53/$2,644.55/$2,640.35 is considered a key area.

Silver was unable to regain the $31 level this week, leaving the short to near-term tone vulnerable. The white metal retreated from Thursday's five-week high and appears that the string of higher weekly closes will end at two.



I have maintained for some time now that silver must regain the 31-handle to set a more neutral tone. More importantly, it has been my view that a move back above $32 was needed to provide confidence to the bull camp.

Apparently, the bulls were not heartened by China attaining its growth goal in 2024, nor the IMF's upgrade to U.S. growth expectations for this year.

Silver appears poised to close back below the 50-day moving average today ($30.431), which would leave the 200-day at $30.00 vulnerable to a test. Penetration of the latter would shift focus to this week's low from Monday at $29.553. Key support is defined by the $28.802/783 double bottom.


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

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