Blog posts of '2025' 'January'

1/16/2025

Gold and silver rally to 5-week highs on the modest revival of rate-cut expectations

OUTSIDE MARKET DEVELOPMENTS: Israel is claiming that Hamas is already trying to renege on parts of the ceasefire deal. Israel has delayed a cabinet vote on the agreement, suggesting the deal is in jeopardy. Meanwhile, Israel struck targets in Gaza overnight.

Hopes for the ceasefire somewhat dialed down global geopolitical tensions. However, "massive" exchanges of missiles and drone attacks between Russia and Ukraine this week were an offsetting factor.

President-elect Trump's cabinet picks continue to be grilled on Capitol Hill. Given the GOP majority in the Senate, Trump's team is expected to be confirmed.

Firefighters continue to battle two large wildfires in California. Moderating winds provide some hope that the teams will make some progress on containment.

This week's U.S. inflation data were benign enough to garner a modest uptick in Fed rate cut expectations for H1. While Fed funds futures suggest that won't happen until May or June, yields and the dollar have retreated from their recent highs.

Economic weakness elsewhere in the world suggests further easing from other central banks is likely. As a result, interest rate differentials will continue to underpin the dollar.

Retail Sales rose 0.4% in December, below expectations of +0.6%, versus an upward revised +0.8% in November. Ex-auto +0.4% on expectations of +0.5%, versus +0.2% in November.

Initial Jobless Claims rose 217k in the week ended 11-Jan, above expectations of +214k, versus an upward revised +203k in the previous week. Continuing jobless claims fell 18k in the 4-Jan week to 1,859k from 1,877k in the previous week.

Import Price Index +0.1% in December, above expectations of -0.3%, versus +0.1% in  November.

Export Price Index +0.3 in December, above expectations of +0.1%, versus unch in November.

Philly Fed Index surged 55.2 points to a 45-month high of 44.3 in January, well above expectations of -9.0, versus an upward revised -10.9 in December (was -16.4). It was the largest monthly gain since June 2020. The prices paid index rose 5 points to a 25-month high of 31.9.

Business Inventories rose 0.1% in November, in line with expectations, versus unch in October.

NAHB Housing Market Index ticked up to 47 in January from 46 in December.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$10.00 (+0.37%)
5-Day Change: +$41.33 (+1.55%)
YTD Range: $2,607.16 - $2,712.04
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +30.86

Gold is trading above $2,700 for the first time in over a month.  The yellow metal is higher for a third straight session after benign U.S. inflation data revived H1 rate cut hopes.



Yields and the dollar continue to trade off their recent highs providing some lift for gold. This week's upside extension constitutes a convincing breakout of the symmetrical triangle pattern, which lends credence to the previously established measuring objective at $2,933.76.

The December high at $2,723.70 has been approached but remains intact thus far. A breach of this level would bode well for a short-term challenge of the $2,789.68 record high. However, for now, the $2,789.68/$2,541.42 range that was established in October and November remains intact.

Initial support is at $2,700.00/$2,697.07 and protects the overseas low $2,691.47. Additional chart support at $2,657.28/$2,656.10 stands in front of the convergence of the 20-, 50-, and 100-day moving averages at  $2,643.76/$2,638.40.

Silver is up for a third straight session, buoyed by a softer dollar. The white metal is trading at five-week highs and pressuring the 100-day moving average.



The $28.802/783 double bottom is a bullish chart feature, and yesterday's close above the 50-day MA offered further encouragement to the bull camp. I maintain that a rise above $31 is needed to relieve pressure on the downside, and $32 must be regained to return a measure of credence to the underlying uptrend.

On the bearish side of the equation is the fact that silver remains below the 100-day MA at this point and the 50-day MA crossed below the 100-day last week. These mixed technical signals warrant continued caution.


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.

1/15/2025

Gold firms to new highs for the week, silver to four-week highs on softer dollar

OUTSIDE MARKET DEVELOPMENTS: Israel and Hamas have reportedly agreed to a ceasefire and hostage release deal according to the AP. An Israeli official confirmed the deal, but there has not been word from the PMs office yet. 

Russia launched a "massive" missile and drone attack against critical infrastructure in Ukraine, causing the power grid to be taken down. This was in response to a Ukrainian missile and drone attack on Tuesday that struck targets within Russia.

The Russian attack prompted Poland – a NATO member – to place its air defenses in the "highest state of readiness." Fighter jets were reportedly scrambled as Russia struck targets in Ukraine close to the Polish border.

There have been some indications that Putin is eager to talk with President-elect Trump soon after his inauguration. The Trump campaign had said finding a negotiated solution to the Ukraine conflict was a diplomatic priority.

German GDP fell 0.2% in 2024. That's the second year in a row that Europe's largest economy has contracted. With the machinery and auto sectors continuing to struggle and potential Trump tariffs looming, the prospects for this year aren't any better.

As goes Germany, so goes the rest of Europe. Growth risks should keep the ECB under pressure to continue easing. Banque de France Governor Villeroy said today that he thought the neutral rate was 2%, suggesting another 100 bps of cuts could be seen by summer. 

Today's headline CPI beat somewhat offsets yesterday's PPI miss. Annualized CPI rose to 2.9% in December, the highest since July. Revived hopes for an H1 Fed rate cut that emerged on Tuesday have been pared somewhat today, prompting a rebound in the dollar from new lows for the week.

MBA Mortgage Applications surged 33.3% in the week ended 10-Jan despite high mortgage rates. It was the first positive print in five weeks. 30-year mortgage rates rose for a fifth straight week to a 36-week high of 7.09%. Perhaps buyers and refinancers have simply resolved that mortgage rates aren't coming down any time soon.

CPI rose 0.4% in December, above expectations of +0.3%, versus +0.3% in November; 2.9% y/y, versus 2.7% y/y in November. Core +0.2% in December, below expectations of +0.3%, versus +0.3%; 3.2% y/y, versus 3.3% in November.

Empire State Index tumbled 12.8 points to a six-month low of -12.6 in January, below expectations of -1.4, versus 0.2% in December. "Both input and selling price increases picked up. Firms grew more optimistic that conditions would improve in the months ahead," said the NY Fed.

The Beige Book for the January FOMC meeting comes out this afternoon.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$9.44 (+0.35%)
5-Day Change: +$25.92 (+0.97%)
YTD Range: $2,607.16 - $2,697.10
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +29.24

Gold eked out a new high for the week, helped by a modest improvement in the prospects for a Fed rate cut in H1. The dollar index fell to a new low for the week providing some lift for the yellow metal.

 

While the $2,789.68/$2,541.42 range remains intact, I'm mildly encouraged by the fact that gold is holding above the midpoint of the range as well as the 20-, 50-, and 100-day moving averages. A breach of Friday's high at $2,697.10 should allow for tests above $2,700.

A short-term penetration of the December high at $2,723.70 would clear the way for a challenge of the all-time high at $2,789.68. Above the latter, $3,000 would be back in play.

In the latest monthly Gold Compass, Incrementum makes note of gold's stellar performance in 2024. "For the year, gold soared by 27% in USD terms and 35.6% in EUR, fueled by economic uncertainties, inflation fears, and central banks' gold accumulation." 

Incrementum has a price projection of $4,821 for 2030. They also note that gold's market capitalization is approaching $20 trillion and the comparison with BitCoin makes for an interesting chart.

Today's intraday low at $2,670.32 provides a new tier of support ahead of more substantial chart support at $2,657.28/$2,656.10. These levels protect the convergence of the 20-, 50-, and 100-day moving averages at $2,644.22/$2,636.44.

Silver has jumped to a four-week high with the breach of resistance at $30.59. The probe above the 50-day moving average is mildly encouraging, suggesting scope for a test of the 100-day at $30.841.



Amid persistent global growth risks, it seems that gains are technical in nature. The small double-bottom at $28.802/783 remains the dominant technical feature, but $31 must still be regained to ease pressure on the downside. More significantly, a move back above $32 is needed to truly reinvigorate the bull camp.

A failure to register a close above the 50-day MA at $30.485 would leave silver vulnerable to a move back below $30. A breach of Fibonacci/chart support at $29.473/442 would set up another run at the $28.802/783 cycle lows.


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.

1/14/2025

Gold and silver stabilize after yesterday's retreats

OUTSIDE MARKET DEVELOPMENTS: Optimism about a potential ceasefire for hostages deal between Israel and Hamas is contributing to improved risk appetite this morning. Qatari mediators said that Hamas has accepted a draft agreement.

The deal must now be agreed to by Netanyahu and his security cabinet. Israel conducted strikes within Gaza overnight, killing 31.

Offsetting the potential de-escalation in the Middle East; Ukraine fired U.S. and British-supplied missiles into Russia today. While Russia claimed all were shot down, the defense ministry vowed the attacks "will not go unanswered."

Bloomberg reports that the Trump team is exploring a gradual phasing-in of threatened tariffs. The plan proposes 2%-5% monthly increases as a means to mitigate inflation risks. This story seemingly has reduced market angst centered on President-elect Trump's trade policies.

China appears to be announcing new accommodations daily. The latest will allow institutional investors to access PBoC funding for stock purchases. China's yuan-denominated loan program continues to expand as well.

Yields and the dollar have eased today and stocks are mostly better on risk-on sentiment. Weaker-than-expected producer inflation in December has helped the cause. However, recent evidence of a strong U.S. economy has raised worries of revived inflation and led to scaled-back Fed rate cut expectations.

NFIB Small Business Optimism Index rose 3.4 points to a six-year high of 105.1 in December, versus 101.7 in November. “Small business owners feel more certain and hopeful about the economic agenda of the new administration. Expectations for economic growth, lower inflation, and positive business conditions have increased in anticipation of pro-business policies and legislation in the new year,” said NFIB Chief Economist Bill Dunkelberg.

PPI rose 0.2% in December, below expectations of +0.4%, versus +0.4% in November; 3.3% y/y versus 3.0% in November. Core was unchanged, below expectations of +0.3%, versus +0.2% in November; 3.5% y/y, up from 3.4% in November.

RCM/TIPP Economic Optimism Index fell 3.9% to 51.9 in January, a retreat from a 40-month high of 54.0 in December. RCM notes that "fears of inflation and a slowdown persist."


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$5.78 (+0.22%)
5-Day Change: +$18.45 (+0.70%)
YTD Range: $2,607.16 - $2,697.10
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +27.87

Gold has stabilized after starting the week on its back foot.  The yellow metal is hovering around the midpoint of the $2,789.68/$2,541.42 range amid mixed geopolitical signals and a softer dollar.



However, the elevated yield environment should continue to underpin the dollar and pose a headwind for gold. The dollar index set a more than two-year high of 110.18 yesterday.

Umicore reports rising physical demand in Asia ahead of the Lunar New Year holiday. Gold is considered an auspicious gift throughout much of Asia that signifies wealth, prosperity, and good fortune for the new year. The Lunar New Year falls on January 29.

Global central banks were net buyers of gold in 2024 for a fifteenth consecutive year. While we await finalized data for December, it appears China was a buyer for a second straight month after a six-month pause that ended in November. Standard Chartered Bank notes that gold as a share of total reserves is the highest it has been since 1996. I expect official sector interest in gold to remain robust in 2025.

Chart support at $2,656.10 (9-Jan low) has been reinforced by yesterday's low at $2,657.28. More substantial support is marked by the 7-Jan low at $2,633.26 and the convergence of the 20-, 50-, and 100-day moving averages.

On the upside, the overseas high at $2.674.46 protects Friday's high at $2,697.10, which in turn provides an intervening barrier ahead of the December high at $2,723.70. The latter must be exceeded to clear the way for a challenge of the all-time high at $2,789.68. 

Silver has recouped some of yesterday's losses, but has been unable to regain the 200-day moving average thus far. This leaves the downside vulnerable to further tests of the downside.



The inability of the white metal to clear the trendline on the upside, the 50-day moving average's drop below the 100-day, and the 20-day below the 200-day, are all bearish technical signals. A breach of Fibonacci/chart support at $29.473/442 would set up another run at the $28.802/783 lows.

Those cycle lows are still seen as a small double bottom, but $31 must be regained to return some credence to that chart pattern. Last week's high at $30.59 marks intervening resistance.


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.

1/13/2025

Gold and silver slide on dimmed rate cut hopes and strong dollar

OUTSIDE MARKET DEVELOPMENTS: Friday's payrolls beat further eroded Fed rate cut expectations for 2025 amid rising concerns about revived inflation. Fed funds futures now suggest the Fed is on hold through May. June is close to a 50/50 proposition.

Late last week the U.S. and UK announced harsh new sanctions directed at Russia's energy industry. Oil prices have surged to four-month highs above $81. Natural gas prices reached two-year highs last week, just as the northern hemisphere enters the heart of winter.

Worries that the policies of the incoming Trump administration will further stoke inflation persist. Trump has pledged sweeping tariffs that could launch a global trade war.

Key U.S. inflation data are out this week. Median expectations for December PPI (tomorrow) are +0.4%. Expectations for CPI (Wednesday) are +0.3%. The annualized rate for both are likely to rise. Import and export prices will be released on Thursday. 

The 10-year yield remains well bid just below 5%. Elevated long yields are contributing to the uptrend in the dollar. The dollar index has traded with a 110 handle for the first time since Nov'22.

The PBoC has announced new measures to defend the yuan as the Chinese currency approached record lows ahead of Trump's inauguration. The central bank is also pivoting toward providing support for Chinese consumers in an effort to ward off disinflation and boost growth.

California is bracing for another day of high winds and heightened fire danger. The death toll from the LA fires has reached 24.

Today's economic calendar has just the December Treasury Budget. The market is expecting a deficit of -$30 bln.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$13.46 (-0.50%)
5-Day Change: +$27.11 (+1.03%)
YTD Range: $2,607.16 - $2,697.10
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +27.60

Gold has dipped back into the lower half of the $2,789.68/$2,541.42 range after last week's gains faltered just shy of the $2,700 level. The yellow metal is being weighed by dimmed Fed rate cut expectations, strong yields, and new two-year highs in the dollar. Ongoing political uncertainty and geopolitical risks are likely to limit the downside. 

Umicore suggests Trump's tariff threats prompted the trade to ship physical gold to the U.S. in December to cover short positions here. "This led to a liquidity shortage, higher EFP and therefore extremely high leasing rates on the market in London and Zurich," according to Umicore's daily report.

This further explains gold's resilience in the face of yield and dollar strength into year-end 2024. Ongoing central bank demand is another significant supportive factor.

Global ETFs saw 6 tonnes of inflows in the week ended 10-Jan. It was the first net inflow in three weeks with buying by North American and European investors exceeding the 3.9 tonnes of outflows from Asia.

The CFTC reported that net speculative long positions in gold futures edged lower by 0.3k to 247.3k contracts in the 06-Jan week, versus 247.6k in the previous week. It was the third straight weekly decline in spec long positioning.

CFTC Gold speculative net positions   

Minor chart support at $2,656.10 (9-Jan low) has contained the downside thus far. The 20-, 50-, and 100-day moving averages are converging modestly lower near the 7-Jan low at $2,633.26. Last week's low at $2,621.42 looks to be pretty well protected at this point.

On the upside, Friday's high at $2,697.10 now provides a good intervening barrier ahead of the December high at $2,723.70. The latter is the key to unlocking a challenge of the all-time high at $2,789.68. An eventual upside breakout of the range remains favored.

SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$0.54 (-1.78%)
5-Day Change: -$0.318 (-1.06%)
YTD Range: $28.946 - $30.590
52-Week Range: $21.945 - $34.853
Weighted Alpha: +22.43

Silver was unable to sustain last week's gains above $30 after upticks stalled ahead of the 50-day moving average. When the 50-day dropped below the 100-day last week, it was a troubling technical signal for the bull camp.



Today's plunge back below the 200-day moving average suggests further vulnerability. More than 50% of the rally off the $28.802/$28.783 double-bottom has already been reatraced. The 61.8% retracement level of that rally comes in at $29.473 and corresponds closely with last week's low at $29.442.

The CFTC's COT report for the 6-Jan week showed that net long positioning fell 2.3k to 37.9k contracts, versus 40.2k in the previous week. It was the fourth consecutive weekly decline.

CFTC Silver speculative net positions

I continue to believe that $31 must be regained to set a more neutral tone within the range. More importantly, silver needs to recapture the 32-handle to reinvigorate the bull camp. Both of those levels now appear well protected with Friday's high at $30.59 marking intervening resistance.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
Tornado Precious Metals Solutions by Zaner
312-549-9986 Direct/Text
[email protected]
www.ZanerPreciousMetals.com
www.TornadoBullion.com
X: @GrantOnGold
X: @ZanerMetals
Facebook: @ZanerPreciousMetals

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.

1/10/2025

Gold and silver poised for solid weekly gains, despite higher yields and a strong dollar

I'm on the road at the FUN Show in Orlando, so today's commentary will be brief.

OUTSIDE MARKET DEVELOPMENTS: U.S. nonfarm payrolls bested expectations by more than 100k jobs. Labor market strength intensifies concerns of revived inflation and bolsters expectations that the Fed will be much less aggressive with rate cuts in 2025.

Nonfarm payrolls rose 256k in December, above expectations of +150k, versus a revised +212k in November (was +227k). The unemployment rate ticked down to 4.1% on expectations for a steady reading of 4.2%.

Hourly earnings rose 0.3%, in line with expectations, versus +0.4% in November. The average workweek was steady at 34.3 hours.

Markets are increasingly convinced that the Fed is on hold through H1 with a 25 bps cut now not fully priced in until September. Prospects for a March hold rose to 70.1% this morning, versus 56.2% yesterday and 30.3% a month ago.

Shifting Fed expectations have kept long yields elevated near the 2023 cycle highs. The 10-year yield reached a 15-month high just shy of 5%.

The strong yield environment is underpinning the greenback. The dollar index surged to new 26-month highs, just shy of 110. I see potential to reach the 111.53 Fibonacci level next.

The preliminary Michigan sentiment reading for January comes out later this morning. Median expectations at 74.0, unchanged from December.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$10.94 (+0.41%)
5-Day Change: +$37.38 (+1.42%)
YTD Range: $2,607.16 - $2,682.77
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +28.17

Gold initially sold off on the NFP beat, weighed by dimming rate cut expectations for H1, strong yields, and a strong dollar. However, political and geopolitical uncertainties continue to overwhelm the headwinds.



The yellow metal not only recovered all the post-NFP losses but went on to set new four-week highs. Gold is on track for its second straight weekly gain and the largest in seven.

The upper boundary of the symmetrical triangle pattern is under attack at $2,685.50. A convincing breach of this level and $2,691.13 high (13-Dec) would establish a measuring objective at $2,933.76. Store that away for now, as gold remains well-contained within the $2,789.68/$2,541.42 range.

Tests above $2,700 will meet solid chart resistance defined by the 12-Dec high at $2,723.70. Above that, the all-time high at $2,789.68 would be back in play.

Today's post-NFP low at $2,671.27 reinforced the overseas low at $2,669.46. I had been watching the 50-day moving average this week as an important support on a close basis. That indicator is now considered fairly well protected with an additional tier of support noted at $2,656.10 (9-Jan low).

Silver rebounded from early losses triggered by stronger-than-expected jobs growth in December, which elevated yields and the dollar. The white metal jumped to fresh three-week highs and appears on track for an eighth straight higher close, and the second consecutive higher weekly close.



The 50- ($30.635) and 100-day ($30.827) moving averages remain intact at this point, keeping chart resistance at $31.00/088 at bay. The trendline off the October peak at $34.853 comes in at $30.664.

I believe the $32 level must be regained to fully reengage the bull camp. Given the developing overbought condition and ongoing uncertainty about the industrial demand prospects for silver, such a move is likely to prove difficult in the short-term.

However, the performance of silver has exceeded my expectations this week. Perhaps there is a growing belief that Chinese stimulus measures are going to finally provide the desired boost to the world's second-largest economy. 

The fact that the 20-day moving average fell below the 200-day this week remains a troubling technical feature. A retreat below $30 from here would leave Monday's low at $29.442 vulnerable to a retest. Below the latter, the $28.802/783 lows would be back in play.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
Tornado Precious Metals Solutions by Zaner
312-549-9986 Direct/Text
[email protected]
www.ZanerPreciousMetals.com
www.TornadoBullion.com
X: @GrantOnGold
X: @ZanerMetals
Facebook: @ZanerPreciousMetals

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.