Blog posts of '2025' 'February'

Gold surges to new record on heightened inflation and trade worries, silver retreats below $32

OUTSIDE MARKET DEVELOPMENTS: While January payrolls missed expectations, there were significant back-month revisions and the unemployment rate ticked down to 4%. The market has broadly interpreted the jobs data as solid and reflective of a robust U.S. economy.

Fed funds futures have pushed the likelihood of the next Fed rate cut to September. The implied Fed funds rate for December is 3.975%, suggesting the market now believes there will be just one rate cut this year.

The more hawkish Fed outlook, a surprising drop in consumer sentiment, and a surge in inflation fears are all contributing to risk-off sentiment. All the major U.S. stock indexes are under pressure and the VIX is up more than 3%.

The University of Michigan's year-ahead inflation expectations surged to a 15-month high of 4.3% in February from 3.3% in January due to tariff worries. "This is only the fifth time in 14 years we have seen such a large one-month rise (one percentage point or more) in year-ahead inflation expectations," according to survey director Janet Hsu.

It was the second straight "unusually large" increase amid ceaseless reporting on what's going to cost more as a result of Trump's trade policies. It's not surprising that consumers are rattled.

Despite the delay of tariffs on Mexico and Canada, worries about a potential trade war remain high. Tariffs on China have been implemented and they have responded with tariffs of their own. Europe is worried that they are now in the crosshairs, as is every country that carries a trade surplus with the U.S.

Nonfarm Payrolls rose 143k in January, below expectations of +165k, versus an upward revised +307k in December (was +256k).  The unemployment rate ticked down to 4% on expectations of 4.1%, versus 4.1% in December. Hourly earnings rose 0.5%, above expectations of +0.3%, versus +0.3% in December. The average workweek fell to 34.1 hours, the lowest since March 2020. Weather and the LA fires may have contributed to the drop.

Michigan Sentiment (prelim) unexpectedly tumbled to a seven-month low of 67.8 in February, below expectations of 71.5, versus 71.1 in January. One-year inflation expectations rose a full percentage point to a 15-month high of 4.3%.

Wholesale Sales rose 1.0% in December, above expectations of +0.7%, versus a positive revised +0.9% in November (was +0.6%). Inventories fell 0.5% in line with expectations, versus -0.1% in November. The inventory-sales ratio dropped to 30-month 1.31. The net impact on Q4 GDP should be positive.

GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$11.29 (+0.40%)
5-Day Change: +$64.46 (+2.30%)
YTD Range: $2,607.16 - $2,880.41
52-Week Range: $1,986.16 - $2,880.41
Weighted Alpha: +39.78

Gold surged to a new record high in early U.S. trading on Friday, buoyed by ongoing haven interest and increased inflation worries. It was the seventh record high out of the last eight sessions. The yellow metal also appears poised for its sixth consecutive higher weekly close.



The yellow metal is also garnering support from news released today that showed China's PBoC added gold to reserves in January. It was the third straight monthly increase, fortifying the belief that a new buying trend is underway after last year's six-month pause.

Additionally, China's National Financial Regulatory Administration announced a pilot program that would allow insurance funds to invest in gold. Increased institutional demand provides yet another tailwind for gold and could stoke more broad-based buying – including jewelry – in the world's largest gold-consuming nation, regardless of record-high prices.

Furthermore, despite more hawkish Fed expectations and a retreat in Treasuries, the dollar remains fairly subdued. While the dollar index is higher on the day, it remains in the lower half of this week's range.

At Thursday's policy decision presser, BoE Deputy Governor Ramsden responded to a question about the gold outflow from the central bank's vaults. He acknowledged that all of the available delivery slots are booked, and any new requests will have to wait longer. However, he classified the process as “very orderly.”

Ramsden noted that as gold is a physical asset there are "real logistical constraints," including security constraints. "The stuff is also quite heavy," he said, which got a chuckle from the press corp.

Upside targets at $2.936.00 (measuring) $2,943.10 (Fibonacci), and $3,000 (psychological) remain valid. Today's intraday and all-time high at $2,885.75 provides an intervening barrier.

The intraday retreat from today's record high is seen as profit-taking ahead of the weekend.  First support at $2,855.32 protects more substantial support marked by the lows from Wednesday and Thursday at $2,740.60/$2,739.69. Below the latter, the $2,800 zone and the old highs at $2,789.68/$2,784.96 are highlighted.

Silver eked out a new high for the week at $32.590 before succumbing to intraday selling pressure. While the white metal still seems like to notch a third straight higher weekly close, it appears like a second consecutive lower daily close is in the offing.



Global trade and growth worries continue to be a headwind for silver, which derives the majority of demand from industry. A close below $32 to end the week would be a concern for the bull camp, suggesting potential back to Tuesday's low at $31.40. Below that, the 100-day moving average at $31.166 and Monday's low at $30.763 would be back in play.

Ongoing strength in gold perhaps generated some spillover haven buying in silver this week, but that was overwhelmed today by souring consumer sentiment. The $32.530/590 level now provides a good upside barrier ahead of the $32.657/700 chart point and the next Fibonacci level at $33.554.

I'd like to see the 100-day moving average hold on the downside and $32 regained on a close basis to reinstill some degree of confidence in the bullish scenario that emerged this week.


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 corrects after five-session win streak, silver attracts buying interest on dips below $32

OUTSIDE MARKET DEVELOPMENTS: White House spokesperson Karoline Leavitt indicated that Chinese President Xi tried to engage President Trump in trade negotiations earlier this week. "I will speak to him at the appropriate time. I'm in no rush," said Trump.

With tariffs on Canada and Mexico on hold for a month, there are concerns that Trump will turn his attention to Europe next. "We are ready to engage immediately and we hope that through this early engagement, we can avoid the measures which would bring a lot of disturbance to the most important trade and investment relationship on this planet," said EU trade chief Maros Sefcovic.

World leaders are decrying President Trump's audacious proposal to "take over" and redevelop the Gaza Strip. The White House is already walking back the plan, but some think Trump was merely goading regional stakeholders to proffer their own ideas.

The BoE cut the bank rate by 25 bps to 4.5% in a widely expected move. The vote to ease was unanimous, but two committee members wanted a larger 50 bps cut.

“We expect to be able to cut bank rate further as the disinflation process continues. But we will have to judge meeting by meeting how far and how fast,” said BoE Governor Bailey. The expectation of further cuts prompted cable to retreat from four-week highs.

Challenger Layoffs rebounded 11k to 49.8k in January, versus 28.8k in December. "January was relatively quiet in terms of job cut announcements. However, we’ve already seen major announcements in the early days of February, so it seems this quiet is unlikely to last,” said Andrew Challenger.

Productivity (prelim) moderated to a 1.2% pace in Q4, below expectations of 1.8%, versus an upward revised 2.3% in Q3 (was 2.2%). ULCs jumped 3.3%, above expectations of +3.3%, versus +0.8% in Q3.

Initial Jobless Claims rose to 219k in the week ended 1-Feb, above expectations of 214k, versus a revised 208k in the previous week. Continuing Jobless Claims increased to 1,886k in the 25-Jan week, above expectations of 1,870k, versus a revised 1,850k in the previous week.

FedSpeak is due from Waller and Logan this afternoon.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$0.99 (-0.03%)
5-Day Change: +$68.33 (+2.45%)
YTD Range: $2,607.16 - $2,880.41
52-Week Range: $1,986.16 - $2,880.41
Weighted Alpha: +39.63

Gold has come under modest corrective pressure. It seems likely that the yellow metal will notch its first lower close in over a week. However, gold still appears to be on track for a sixth straight higher weekly close.



Wednesday's low was slightly exceeded, but price action has been largely confined to yesterday's range. After five successive days of record highs, a period of correction or consolidation would be welcomed by the bull camp as it would relieve the short-term overbought condition.

Upside targets at $2.936.00 (measuring) and $3,000 (psychological) remain valid. The all-time high from yesterday at $2,880.41 provides an intervening barrier.

On the downside, yesterday's low at $2,840.60 was reinforced by today's intraday low at $2,839.69. More substantial support is marked by the $2,808.92/2800.00 zone. Dips are likely to continue attracting buying interest.

The gold market continues to be roiled by the flow of metal from global trading centers to Comex vaults in America. What started as an attempt to preposition physical metal in the U.S. to avoid potential tariffs, turned into an arbitrage opportunity that’s taken on a life of its own.

Futures market premiums over spot are just too appealing to pass up. “There are challenges when the US is operating at this kind of premium, but it is something that the market is managing well,” said Ruth Crowell, CEO of the LBMA.

Comex inventories have risen 88% since November according to the FT, while London has been drained. "There is more gold in the U.S. than there should be under normal circumstance, and there is less gold in London than there should be," said John Reade of the World Gold Council.

"Dealers are quoting prices for gold at the BOE at discounts of more than $5 an ounce below spot in London," according to Bloomberg. Amid reports that it's taking up to eight weeks to get gold out of the BoE vault, dealers are inclined to sell those claims at a discount to spot to get gold in hand now. At this point, I think it's more about capitalizing on the higher U.S. price than dodging tariffs.

The turmoil has caused significant dislocation in lease rates and OTC market carry charges. In these market conditions, hedgers suddenly faced with having to pay a carry on short positions may choose to go un or under-hedged, adding additional impetus to the uptrend.

A word of caution though: The market is really out of balance right now. If the contango moderates to the point where it no longer makes sense to ship gold to the U.S. this thing could start to unwind with potentially volatile results.

Silver probed repeatedly back below $32 intraday, but those downticks could not be sustained. While still lower on the day, the white metal is trading comfortably above $32 and appears likely to register a third consecutive higher weekly close.



Silver staged an unsuccessful challenge of the $32.534 Fibonacci level on Wednesday, resulting in a 13-week high of $32.530. A short-term breach of $32.530/534 would clear the way for tests of $33.00 and then the next Fibonacci level at $33.554 (78.6% retracement). Penetration of the latter would put the cycle high from October at $34.853 back in play.

Today's intraday low at $31.816 now provides a good intervening barrier ahead of secondary supports at $31.40 (Tuesday's low) and the 100-day moving average at $31.148. It would take a retreat below the $31.00 zone to take the wind out of the bulls' sails. Ongoing uncertainty on the trade front and global growth risks are the fundamental factors posing downside risks.


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 hits record highs for a fifth straight day, silver at its highest since November

OUTSIDE MARKET DEVELOPMENTS: Ongoing uncertainty on the trade front continues to drive speculation about inflation. My news feed is chock full of one article after another about what will cost more due to the Trump tariffs.

While President Trump delayed tariffs on Canada and Mexico after some progress on border security issues, the drama is far from over. Canadian PM Trudeau has called a trade summit on Friday with the goal of building a "long-term prosperity agenda for Canada. One that is resilient, that breaks down barriers between provinces and territories, and that is diversified in global trade."

In seeking greater trade diversification, Trudeau seems to acknowledge that Canada had become too dependent on its neighbor to the south. Prior to the pause, Canada appeared ready to launch retaliatory tariffs, but with the reprieve comes the opportunity for both countries to seek an equitable trade deal.

Today's big ADP jobs survey beat creates upside risk for Friday's payrolls report and is suggestive of ongoing U.S. economic resilience. Fed funds futures continue to suggest midyear as the most likely timing for the next rate cut.

FedSpeak this week has centered on the "no hurry" to adjust policy messaging, amid ongoing uncertainty. "There is just a lot of uncertainty in the air," said Richmond Fed President Barkin (moderate hawk). However, with signs of economic growth and an expectation that inflation will ultimately continue to moderate, Barkin said he is leaning toward further cuts.

The dollar continues to ease from Monday's high after a measured response from China on tariffs. The PBoC chose not to devalue the yuan as an offset to U.S. tariffs, which also suggests some level of tolerance. 

Further weight was applied to the greenback after stronger-than-expected wage growth in Japan boosted prospects for more BoJ rate hikes, and lifting the yen. The USD-JPY rate slid more than 1% to an eight-week low of 152.119.

MBA Mortgage Applications rebounded 2.2% on stronger refinancing demand in the week ended 31-Jan, versus -2.0% in the previous week. The 30-year mortgage rate dipped back below 7%.

ADP Employment Survey +183k in January, above expectations of +142k, versus an upward revised +176k in December (was +122k). "We had a strong start to 2025 but it masked a dichotomy in the labor market. Consumer-facing industries drove hiring, while job growth was weaker in business services and production," said Nela Richardson, Chief Economist at ADP.

Trade Balance widened to a -$98.4 bln deficit in December, outside expectations of -$96.3 bln, versus a revised -$78.9 bln in November. It was the second largest deficit on record as imports surged 3.5% to $364.9 bln on tariff frontrunning.

S&P Global Services PMI edged up to 52.9 in January on expectations of 52.8, versus 52.8 in December.  "Service sector businesses reported a slowdown at the start of 2025, with activity levels growing at a reduced pace compared to the robust gains seen late last year," said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.

Services ISM fell to 52.8 in January, below expectations of 54.2, versus a revised 54.0 in December. Prices moderated from 64.4 to 60.4.

GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$26.26 (+0.92%)
5-Day Change: +$109.72 (+3.98%)
YTD Range: $2,607.16 - $2,880.41
52-Week Range: $1,986.16 - $2,880.41
Weighted Alpha: +40.09

Gold has now reached fresh record highs in five consecutive sessions. The yellow metal is being driven by ongoing trade uncertainties but received an additional boost over the last two days from a weaker dollar.



Arguably, concerns about an all-out trade war have moderated somewhat since the beginning of the week. Yen strength today is contributing to the weight on the dollar. The dollar index has retrace all of Monday's sharp gains and then some. The breach of support at 107.50 leaves last week's low at 106.97 vulnerable to a retest.

With the Fibonacci objective in gold at $2,857.21 exceeded, the $2936 measuring objective gains credence. The latter corresponds fairly closely with the next Fibonacci level at $2,943.10 (161.8% retrace of the decline from  $2,789.68 to $2,541.42).

The increase in upside momentum this week bodes well for attainment of the $3,000 psychological threshold. New corrective lows in the dollar should bring this level within reach.

Market dislocation associated with the movement of physical gold from global trading centers to Comex, both to avoid potential tariffs and to take advantage of the arbitrage opportunity presented, continues to roil the market. Liquidity issues in London and structural concerns about the LBMA – even if its just perception – add another level to the buying interest that could overshadow the developing overbought condition.

But has the pendulum swung too far? Ross Norman of MetalsDaily makes a good point: "[I]f 435 tonnes of kilobars are now in New York then surely the problem is as much about surpluses on one side of the Atlantic, as much as so-called 'shortages' on the other."

The last time we saw anything like this was during COVID. Ultimately that situation got unwound and the gold market returned to more-or-less normal operations. However, twice in five years may lead to erosion of trust in the paper claims on physical gold that have become such a big part of the market. 

Today's Asian low at $2,840.60 marks first support. Setbacks are likely to be viewed as buying opportunities with the $2,800 zone seen as well protected.

Silver remains well-bid above the $32 level, buoyed by yet another round of record highs and gold and a softer dollar. Some moderation of trade concerns may be helping the cause, but uncertainty prevails on that front.



The white metal has notched only one lower close (Friday) in the last seven sessions. Upside momentum has increased as confidence from the bull camp grows.

The $32.534 Fibonacci level has been pressured but remains intact thus far. A breach of this level would return additional credence to the longer-term uptrend, targeting $33.00 initially, and then the next Fibonacci tier at $33.554 (78.6% retracement).

The $32.00 level now defines first support and is reinforced by today's intraday low at $31.996. Secondary support is marked by Tuesday's low at $31.40.


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 higher in early U.S. trading.

U.S. calendar features MBA Mortgage Applications, ADP Employment Survey, Balance of Trade, Services PMI & ISM, EIA Data.

FedSpeak due from Barkin, Goolsbee & Bowman.

Gold hits record highs for a fourth straight day, as silver reaches 13-week highs above $32

OUTSIDE MARKET DEVELOPMENTS: News that tariffs against Mexico and Canada will be delayed has improved risk appetite. The two countries acquiesced to some demands on border enforcement, but President Trump also seeks to address trade imbalances moving forward.

China’s Ministry of Finance responded to U.S. tariffs by announcing retaliatory measures. The actions raise concerns about a potential trade war between the world's two largest economies.

While it appears Trump is using access to the U.S. consumer market as a cudgel to extract concessions from its trading partners, there are legitimate concerns that a cycle of tariffs and counter-tariffs could stoke inflation. That in turn could prompt more central banks to pause their easing campaigns.

The Fed is already on hold, despite pressure from the White House to ease further. There is "a ton of uncertainty in a ton of space," said Atlanta Fed President Bostic. Fed funds futures aren't pricing in another rate cut until July. and less than 50 bps in total through year-end.

Attention this week is also on U.S. jobs data. That culminates with January nonfarm payrolls on Friday. Median expectations are +165k jobs.

The Bank of England will announce policy on Thursday and is widely expected to cut by 25 bps to 4.5%. That would leave the BoE bank rate 175 bps higher than the ECB's refi rate. Given the worsening growth picture in the UK and the still restrictive policy, there is room for further easing.

Trade between the U.S. and UK is generally in balance, suggesting that they may be safe from tariffs. Nonetheless, the BoE is likely to strike a cautious tone in light of broader global trade uncertainties.

Factory Orders fell 0.9% in December, below expectations of -0.8%, versus a negative revised -0.8% in November (was -0.4%). Factory orders have contracted in four of the last five months.

JOLTS Job Openings fell 556k to 7,600k in December, below expectations of 8,000k, versus an upward revised 8,156k in November (was 8,098). Available jobs for unemployed job seekers are roughly in balance.

RCM/TIPP Economic Optimism Index edged up to 52.0 in February, below expectations of 53.0, versus 51.9 in January. “Americans' economic confidence improved slightly in February. However, fears of inflation and a slowdown persist," according to Real Clear Markets.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$1.23 (+0.04%)
5-Day Change: +$56.72 (+2.05%)
YTD Range: $2,607.16 - $2,828.55
52-Week Range: $1,986.16 - $2,828.55
Weighted Alpha: +36.84

Gold has reached new all-time highs for a fourth straight session as global trade uncertainty continues to drive safe-haven interest. That outweighs the headwinds of heightened risk appetite and an eight-session high in the dollar index.



The $2,857.21 Fibonacci target (127.2% retracement of the decline from $2,789.68 to $2,541.42) has come within striking distance. A breach of this level would clear the way for additional gains to the $2,936 measuring objective (triangle breakout) and the next 'big round number' at $3,000.

Last week's COT report showed that net speculative long positioning edged down to 299.4k contracts, versus the 17-week high of 300.8k in the previous week.

Gold futures continue to trade at a significant premium to the spot market perpetuating the arbitrage opportunity that is drawing gold to the U.S. Flows from London and Switzerland to Comex vaults have been the story in recent weeks but gold is also coming in from Asia and the Middle East. "The U.S. is like a gold magnet right now, pulling in gold from all over the world," said one expert in a Reuters article.

Arbitrage opportunities are typically fleeting, quickly getting offset as traders jump on the price dislocation. While Comex vaults are as full as they've been since the pandemic, futures premiums remain resilient.

ETF data flow data have not been published yet, but I'm expecting some of the North American outflows from the previous week to be recouped as gold set new record highs late last week.

The market is becoming overbought, with indicators reaching levels last seen in October. This could prompt some profit-taking given that gold is up 9% already this year. However, setbacks into the range are likely to be viewed as buying opportunities.

Today's intraday low at $2,808.92 marks first support. Below that, the previous highs at $2,789.68/84.96 come into play. 

Silver is trading above $32 for the first time since mid-December (13-week highs) buoyed by some optimism on trade stemming from forstalled tariffs against Mexico and Canada. The former is the world's largest producer of silver by a wide margin.



Since the push above $31, upside momentum has accelerated suggesting that the white metal may finally be playing some catch-up with gold. The inability of the gold/silver ratio to sustain gains above 90 bodes well for the catch-up scenario.

Now that silver has broken into the upper half of the $34.853/$28.783 range, a measure of credence has been returned to the longer-term uptrend. A close above $32 today would offer further encouragement to the bull camp. However, global growth risks are still seen as a headwind.

The COT report for last week showed a decrease in net speculative long positions of 3.1k to 44.4k contracts, versus 47.5k in the previous week. A more convincing breach of the 12-Dec high at $32.306 should draw more spec longs back into the market.

CFTC Silver speculative net positions

Such a move would highlight the 61.8% retracement level at $32.534. Beyond that, $33.554 (78.6% retracement) is the last significant Fibonacci level ahead of the $34.853 cycle high from October.

Keep an eye on $32 on a close basis. Secondary support is marked by the highs from late last week at $31.712/619.


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.