Blog posts of '2025' 'May'

Gold set to end May little changed amid competing fundamentals

OUTSIDE MARKET DEVELOPMENTS: The Court of International Trade's tariff reprieve was short-lived as an appeals court granted a stay. The CIT judgement is "temporarily stayed until further notice while this court considers the motions papers,” the appeals court ordered.

Meanwhile, President Trump has accused China of violating a preliminary trade agreement struck in Geneva earlier in the month, which had dialed back tensions between the world's two largest economies.

"...China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY," the President wrote on TruthSocial.

Trade tensions may be escalating, with geopolitical and fiscal risks still elevated. Markets head into month-end with a bias toward risk aversion, but U.S. shares are poised for monthly gains.

The U.S. trade balance narrowed dramatically in April to a 19-month low of -$87.6 bln from a record-wide -$162.3 bln in March. Goods exports rose 3.4%, while imports plunged a record -19.8% to $276.1 bln after importers front-ran tariffs in preceding months.

Personal income remained strong in April, providing ongoing support for disposable income and consumption. The PCE inflation ratcheted lower to 2.1% from 2.3% in March.

The Atlanta Fed's GDPNow estimate for Q2 growth was adjusted significantly higher to +3.84% from +2.18% previously. In light of today's data, I expect many analysts to raise their expectations for Q2 growth.

Despite the modest contraction in Q1 GDP, optimism of a growth rebound in Q2, and taming inflation leaves the Fed sidelined. Fed funds futures continue to suggest potential for a 25 bps rate cut in October and 50 bps in total cuts by year-end.

Goods Trade Balance narrowed sharply to -$87.6 bln in April, well inside expectations of -$141.5 bln, versus a revised -$162.3 bln in March (was -$162.0 bln).

Personal Income rose 0.8% in April, above expectations of +0.3%, versus a positive revised +0.7% in March (was +0.5%). PCE rose 0.2%, in line with expectations. The PCE chain price index rose 0.1% m/m, dropping the annualized pace of inflation to 2.1%. Core inflation fell to 2.5% y/y from 2.7% in March.

Chicago PMI fell 4.1 points to 40.5 in May, below expectations of 45.0, versus 44.6 in April. 

Michigan Sentiment was revised up 1.4 points to 52.2 for May, versus 50.8 preliminary read, unchanged from a 34-month low of 52.2 in April.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$22.46 (-0.68%)
5-Day Change: -$52.94 (-1.58%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,287.64 - $3,495.89
Weighted Alpha: +43.68

Gold heads into the end of the week and month-end, generally consolidative. The yellow metal is poised to end the week lower after trading within the confines of last week's range. Gold is essentially unchanged from April, with an inside month set to be confirmed.



While today's economic data moderated growth risks, trade tensions seem to be back on the rise. Geopolitical and fiscal worries remain elevated, and the mix of fundamental influences has kept gold within recent ranges.

From a technical perspective, price action since the record high was established in April still appears to be corrective within the long-term uptrend. A breach of last week's high at $3,365.41 would bode well for a move back above $3,400 with potential for fresh record highs and continuation of the dominant trend.

A close below the 20-day moving average at $3,290.84 would suggest modest vulnerability for the week ahead. Thursday's low at $3,251.28 will be bolstered by the 50-day MA by midweek. If this level gives way, potential would be for further retracement toward $3,206.90/$3200.00.

Silver continues to straddle the $33 level. While a weekly loss is likely, the white metal seems on track for a higher monthly close.



President Trump called out China for violating a preliminary trade agreement, hiking trade tensions once again. This provides a headwind for silver, keeping the gold/silver ratio elevated near 100.

I'm still watching the 20-day moving average at $32.957 and the 50-day $32.696 as short-term support. The low from 22-May at $32.694 bolsters the latter.

On the upside, a breach of the 22-May high at $33.690 is needed to clear the way for tests above $34. However, key highs at $34.543 and $34.853 are seen as formidable resistances.


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 firms on risk-off sentiment despite court decision on tariffs

OUTSIDE MARKET DEVELOPMENTS: A U.S. Court of International Trade struck down Donald Trump’s reciprocal tariffs and ordered his administration to stop collecting them. The court ruled that Trump's use of the International Emergency Economic Powers Act was unlawful.

“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” according to the three-judge panel. The White House immediately appealed the decision, leaving markets uncertain about the implications.

Even if the appeal is not decided in favor of the White House, I expect Trump to seek other means to exert pressure on U.S. trading partners. Sanctions, for example, are an option that could be even more disruptive to global markets. Going back to the status quo on trade strikes me as highly unlikely.

With tariffs on hold during the appeals process, the market's focus intensifies on fiscal, growth, and geopolitical risks. Risk appetite remains tilted toward risk-off.

Not surprisingly, the minutes from the May FOMC meeting showed that the committee continues to highlight uncertainty with risks perceived on both sides of the dual mandate. The Fed wants more clarity before moving on policy.

Prospects for rate cuts continue to fade. The first cut is not fully priced in until October, with 50 bps in easing projected by year-end.

Q1 GDP (2nd report) was revised up to -0.2%, inside expectations of -0.4%, versus an advance read of -0.3% and +2.4% in Q4'24. Personal consumption expenditures were adjusted down to 1.2% from 1.8%. The PCE price index was unchanged at 3.6%, while the core price index was revised down to 3.4% from 3.5%.

Initial Jobless Claims rose 14k to a five-week high of 240k in the week ended 24-May, above expectations of 230k, versus a revised 226k in the previous week (was 227k). Continuing claims surged 16k to 1919k in the 17-May week, versus an upwardly revised 1903k in the previous week  (was 1,893k).

Pending Home Sales Index fell  6.3% to 71.3 in April, below expectations of -0.9%, versus a 5.5% rise to 76.1 in March; -2.5% y/y. "At this critical stage of the housing market, it is all about mortgage rates. Despite an increase in housing inventory, we are not seeing higher home sales. Lower mortgage rates are essential to bring home buyers back into the housing market," said NAR Chief Economist Lawrence Yun.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$9.24 (+0.28%)
5-Day Change: +$17.33 (+0.53%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,287.64 - $3,495.89
Weighted Alpha: +44.07

Gold rebounded from overseas losses as markets rethought the implications of Trump's federal court loss on tariffs. The haven bid intensified amid increased uncertainty and a retreat in the dollar.



With Trump's tariff strategy still in the hands of the courts, in the form of an appeal, markets have plenty of other things to fret over. These include geopolitical and growth risks, and fiscal worries associated with the "Big Beautiful Bill" making its way through Congress.

Earlier losses were successfully contained by support at $3,250.00/$3,246.26, reinforcing this area and leaving the rising 50-day moving average at $3,228.27 well protected. The quick move back above $3,300 and breach of yesterday's high at $3,224.40 keeps the technical bias to the upside.

Scope is seen for a retest of last week's high at $3,365.41. Penetration of this level would bode well for a move back above $3,400 with potential for fresh record highs.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$0.433 (+1.31%)
5-Day Change: +$0.374 (+1.13%)
YTD Range: $28.565 - $34.543
52-Week Range: $26.524 - $34.853
Weighted Alpha: +11.71

Silver continues to track gold amid ongoing trade uncertainty, rebounding from an overseas dip to $32.763. The intraday tumble in the dollar helped propel the white metal back above $33. However, price action remains confined to last week's range, leaving the short-term tone consolidative.

 

A breach of last week's high at $33.690 would be an encouraging technical event, but the upside is thought to be limited as long as key resistances at $34.543 and $34.853 are intact.

A minor chart point at $32.694, bolstered by the 20- and 50-day moving averages, successfully contained today's overseas losses. Should this area give way, the 100-day MA at $32.296 would be the attraction.


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 Q1 GDP 2nd Report (-0.4% expected), Initial Jobless Claims, Pending Home Sales Index, EIA Data.

FedSpeak due from Barkin, Goolsbee, Kugler, Daly, & Logan.

Gold consolidates amid conflicting pressures

OUTSIDE MARKET DEVELOPMENTS: The rhetoric between Washington and Moscow seems to be intensifying. “What Vladimir Putin doesn’t realize is that if it weren’t for me, lots of really bad things would have already happened to Russia, and I mean REALLY BAD,” wrote President Trump on TruthSocial.

“I only know of one REALLY BAD thing — WWIII. I hope Trump understands this,” responded Dmitry Medvedev,  Deputy Chairman of the Security Council of Russia via X.

Nonetheless, risk appetite remains elevated on optimism that the U.S. and EU are moving toward a trade deal. On Tuesday, President Trump pushed back the imposition of 50% tariffs on the EU until July 9.

European Commission President Ursula von der Leyen posted on X over the weekend that the EU was “ready to advance talks swiftly and decisively.” That makes me wonder what they've been doing since Trump's tariff plans were first unveiled on April 2.

Trump has accused the EU of “slow walking.” His threat of 50% tariffs on Friday seems to have gotten things moving.

While tariff concerns have cooled recently, worries about America's fiscal situation are escalating as the "Big, Beautiful Bill" makes its way through Congress. The legislation does little to rein in debt in an environment of upward pressure on interest rates.

The minutes from the early-May FOMC meeting will be released later today. I don't expect any revelations. The Fed is on hold amid ongoing uncertainty about trade, growth, and inflation.

"All of this is occurring against a backdrop of an even more polarized political system, increased tension with foreign debt holders and less confidence in American security protections that promoted the dollar as the world’s safe haven," worried Peter Orszag, former director of the Office of Management and Budget and the Congressional Budget Office.

Even Elon Musk has expressed his displeasure, saying that increasing the budget deficit “undermines the work that the DOGE team is doing.”

“I think a bill can be big or it can be beautiful. But I don't know if it can be both,” quipped Musk in a CBS interview that will air on Sunday.

MBA Mortgage Applications fell 1.2% in the week ended 23-May, versus -5.1% in the previous week. A 7.1% drop in refis overshadowed a 2.7% rise in purchases. 30-year mortgage rates rose to an 18-week high of 6.98%.

Richmond Fed Index rebounded 4 points to -9 in May, from -13 in April. The index for future local business conditions rose notably from -37 to -6.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$12.27 (+0.37%)
5-Day Change: -$2.87 (-0.09%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,287.64 - $3,495.89
Weighted Alpha: +44.10

Gold remains soft amid reduced trade angst, heightened risk appetite, and a firm dollar. However, the downside is being limited by rising geopolitical tensions and concerns about the U.S. fiscal situation.



Price action remains confined to yesterday's range. The 20-day moving average at $3,289.06 bolsters the initial support zone.

Penetration of $3,289.06/87.50 would leave gold vulnerable to the $3.250.00/$3,246.26 zone, where minor chart support corresponds with the halfway back point of the recent rally. The rising 50-day moving average comes in at $3,222.96.

As long as gold remains above the 20-day, the short-term bias is to the upside. A breach of the 50% retracement level of this week's setback at $3,327.35 would bode well for the anticipated tests back above $3,400.

Silver is consolidating above $33, underpinned by trade optimism. However, upside progress has been limited by geopolitical risks, fiscal and growth worries, higher yields, and a firmer dollar.

 

Formidable resistances limit the upside. Last week's seven-week high at $33.690 stands in front of key highs at $34.543 and $34.853.

With the 20- and 50-day moving averages intact at $32.783/705, the downside is seen as limited as well. If this level gives way, the 100-day MA at $32.264 would be the initial attraction with potential for probes back below $32.


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 weighed by latest retreat from tariff threats, lower yields, firmer dollar

OUTSIDE MARKET DEVELOPMENTS: Days after threatening 50% tariffs on the EU, President Trump announced over the weekend that those tariffs are on hold until July 9 to allow for trade talks. Markets have swung once again from risk-off to risk-on.

However, diminished trade tensions are being offset to some degree by heightened geopolitical risks. Over the weekend, Russia conducted some of its largest drone and missile strikes of the war against Ukraine.

The attacks jeopardize ongoing ceasefire negotiations and prompted Trump to say that Putin had gone "absolutely crazy." The White House is said to be considering additional sanctions on Moscow.

German Chancellor Merz said there were "no longer" range restrictions on arms supplied to Ukraine. This suggests Germany will provide weapons to Ukraine with the ability to strike deep within Russia.

Meanwhile, Israel said that it plans to occupy 75% of Gaza within two months, pushing the Palestinian population into three small "safe" zones. The IDF's goal is to destroy Hamas's military wing and its remaining infrastructure.

Durable Orders fell 6.3% in April, inside expectations of -7.9%, versus a negative revised +7.6% in March (was +9.2%). It was the biggest drop since October, due in large part to a 17.1% plunge in transportation orders.  orders. Orders ex-trans rose 0.2%. Shipments +0.4%.

Case/Shiller Home Price Index rose 1.1% to 338.9 in March, versus a revised 336.2 in February. The annualized pace of appreciation slowed to 4.1% y/y from 4.5%.

FHFA Home Price Index slipped 0.1% in March. It was the first decline since January 2024. Annual appreciation decelerated to a 3.7% pace, versus 3.9% in February.

Consumer Confidence rebounded 12.3 points to 98.0 in May, well above expectations of 87.0, versus a revised 85.7 in April (was 86.0). It was the first gain in six months as tariff worries cooled.

Dallas Fed Index rebounded 20.5 points to -15.3 in May, versus -35.8 in April. It was the first gain in three months, although the index remained in negative territory for the fourth straight month. "Higher-than-usual price pressures continued in May, while wage growth remained slightly subdued," according to the report.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$48.28 (-1.44%)
5-Day Change: +$4.07 (+0.12%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,287.64 - $3,495.89
Weighted Alpha: +42.99

Gold starts the holiday-shortened week on defense, following President Trump's latest retreat from tariff threats. The yellow metal is being weighed by heightened risk appetite, lower yields, and a firmer dollar.



However, rising geopolitical tensions are providing some counterbalance to the dip in trade worries. Support at $3,288.09/87.50 (20-day MA, 22-May low) has contained the downside thus far, leaving the yellow metal in the upper half of last week's range.

Penetration of this level would leave gold vulnerable to further retracement to the $3.250.00/$3,246.26 zone, where minor chart support corresponds with the halfway back point of the recent rally. The rising 50-day moving average comes in at $3,217.85.

Global gold ETFs saw net inflows of 3.2 tonnes. It was the first weekly inflow in three with European buying of 6.7 tonnes offsetting modest outflows in North America and Asia.

The COT report for last week showed net speculative long positions rose 2.8k to 164.0k contracts, versus 161.2k in the previous week. It was the first uptick in spec long positioning in five weeks.

The magnitude of the gains last week returned considerable credence to the underlying uptrend. A close above the 20-day MA would keep the technical bias tilted toward the upside. A breach of the 50% retracement level of this week's setback at $3,327.35 would bode well for the anticipated tests back above $3,400.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$0.592 (-1.77%)
5-Day Change: -$0.170 (-0.51%)
YTD Range: $28.565 - $34.543
52-Week Range: $26.524 - $34.853
Weighted Alpha: +9.42

Silver retreated below $33, weighed by weakness in gold and a firmer dollar. However, trades with a 32 handle were short-lived, with the trade encouraged by the reduction in trade tensions.



Support marked by the convergence of the 20- and 50-day moving averages at $32.756/718 was left untested. Today's intraday low at $32.828 now provides an intervening downside barrier.

Nonetheless, gains above $33 remain suspect as they have consistently attracted selling interest. Last week's seven-week high at $33.690 stands in front of key resistances at $34.543 and $34.853.

The latest COT report showed that net speculative long positions rose 2.2k to 50.0k contracts last week, versus 47.8k in the previous week. It was the first weekly rise in three and drove net spec long positioning to a seven-week high.

While the range is intact, slight emphasis remains on buying into dips in anticipation of trade deals eventually getting struck. This will moderate global growth risks and underpin demand for the white metal.


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 poised for best weekly close in six on heightened trade, geopolitical, and fiscal worries

OUTSIDE MARKET DEVELOPMENTS: President Trump has recommended that tariffs on Europe be lifted to 50% after conceding via TruthSocial that trade talks with the EU "are going nowhere." These new tariffs could take effect on June 1.

"Their powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the U.S. of more than $250,000,000 a year, a number which is totally unacceptable," wrote the President.

Trump also threatened to impose tariffs of at least 25% on Apple if it doesn't start manufacturing iPhones in the United States. Apple CEO Tim Cook said on a recent earnings call that “the majority of iPhones sold in the US will have India as their country of origin.” Apple shares, along with the broader markets, are under pressure.

The escalation of trade tensions has swung sentiment back toward risk-off ahead of the long Memorial Day weekend. Treasuries are recovering some of their recent losses, and the dollar index has fallen to new lows for the week.

New Home Sales surged 10.9% to a 38-month high of 0.743M in April, above expectations of 0.698M, versus a downwardly revised 0.670M pace in March (was 0.724M). The median price rose 0.9% to $407,200. Home inventories retreated 0.6% to 504k, versus a 17-year high of 507k in March.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$33.84 (+1.03%)
5-Day Change: +$148.32 (+4.63%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,287.64 - $3,495.89
Weighted Alpha: +46.81

Gold has reached new two-week highs, and is on track for the best weekly close in six. Heightened trade, geopolitical, and fiscal concerns have revived the haven bid this week, with lower yields and a weaker dollar providing additional lift.



Trade data released this week revealed that Chinese gold imports surged to an 11-month high of 127.5MT in April. "The rise in imports is likely due to the People’s Bank of China allocating fresh quotas to some commercial banks in April, as the authority responds to strong demand from institutional and retail investors at the height of the trade war," according to Bloomberg.

Goldman Sachs suggested that arbitrage activity stemming from the premium offered on the Shanghai Gold Exchange versus the LBMA also contributed to the strong imports.

With more than 61.8% of the corrective decline now retraced, significant technical credence has been returned to the dominant uptrend. Tests back above $3,400 are now considered likely, with the next tier of Fibonacci resistance coming in at $3,416.97.

Penetration of the latter would bode well for a retest of the $3,500 zone. Beyond that, a Fibonacci projection highlights $3,596.20/$3,600.00.

Initial support is noted at $3,324.25/23.80. More substantial support is found just below $3,300, where the lows from the past three sessions correspond with the 20-day moving average.

Silver appears to be on track for its first weekly close above $33 in four weeks. While Thursday's seven-week high at $33.662 remains protected, this week's price action suggests more serious challenges of the upside in the week ahead seem increasingly likely.



The white metal is being bolstered by strength in gold and a weaker dollar, but heightened trade and growth worries do provide headwinds. The gold/silver ratio is back above 100 to end the week as silver continues to underperform.

The relative cheapness of silver is making it an increasingly appealing alternative to gold jewelry. A survey of jewelry retailers showed that 53% of respondents reported marginally increased sales in 2024 over the previous survey from 2022. 

The average store growth for silver jewelry sales was 20% in 2024, versus 14% in 2022. The gold/silver ratio was 76.09 at the end of 2022 and 90.77 at the end of 2024.

One might anticipate that a ratio above 100 this year will have a positive impact on silver jewelry demand. Jewelry accounts for roughly 17% of overall demand.

The $33.662 level is now the short-term barrier protecting more important highs at $34.543 and $34.853. Penetration of the latter is needed to truly reestablish the uptrend.

The $33.00/$32.955 level marks first support. Thursday's low at $32.694 corresponds with the 50- and 20-day moving averages and is the more important level to watch. Penetration would favor further consolidation back to the $32 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.

Gold eases from two-week high on rising yields and firmer dollar

OUTSIDE MARKET DEVELOPMENTS: President Trump's tax-cut bill cleared the House by the narrowest of margins early this morning. The legislation now moves to the Senate, which has already signalled its intention to make changes.

“Now, it’s time for our friends in the United States Senate to get to work, and send this Bill to my desk AS SOON AS POSSIBLE,” Trump wrote on TruthSocial. However, changes in the Senate will require a return to the House, and another test of the slim GOP majority.

The debate over the "big beautiful bill" has stoked concerns that the plan does little to rein in deficit spending, despite White House claims to the contrary. The CBO says the bill adds $3.5 trillion to the national debt through 2033. And the legislation includes a provision to raise the debt ceiling by $4 trillion.

This all comes days after Moody's cut the U.S. sovereign debt rating from AAA to Aa1. Amid lingering trade tensions, the market was already on edge. In addition, yesterday's $16 bln 20-year auction disappointed, and Treasury yields spiked. This reinforces worries that a "sell America" trade has some momentum.

The S&P Flash PMIs for the EU signalled contraction. While manufacturing improved, the reading remains below the 50 threshold. The services reading dropped to a 16-month low of 48.9. Additionally, the Bundesbank said it expects Europe's biggest economy to remain stagnant through Q2.

This weighed on the euro, which provided some support for the dollar. However, the dollar index remains lower on the week, and the magnitude of the downside retracement already seen returned a measure of credence to the five-month downtrend.

Initial Jobless Claims fell 2k to 227k in the week ended 17-May, below expectations of 230k, versus 229k in the previous week. Continuing claims rose 36k to 1,903k in the 10-May week, versus $1,867k in the previous week.

Chicago Fed National Activity Index fell to -0.25 in April from a revised 0.3 in March (was -0.3). "Three of the four broad categories of indicators used to construct the index decreased from March, and three categories made negative contributions in April," according to the report.

S&P Global Flash Manufacturing PMI rose to 52.3 in May, above expectations of 50.1, versus 50.2 in April. The report signals a fifth straight month of expansion.

S&P Global Flash Services PMI rose to 52.3 in May, above expectations of 50.8, versus 50.8 in April.

Existing Home Sales slipped to a 4.00M pace in April on expectations of 4.10M, versus 4.02M in March.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$25.16 (-0.76%)
5-Day Change: +$68.87 (+2.13%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,287.64 - $3,495.89
Weighted Alpha: +44.38

Gold retreated modestly from a two-week high of $3,343.51 in Asia. The yellow metal is being weighed by higher yields and a bit of a bounce in the dollar.



Nearly 61.8% of the one-month correction has been retraced. A breach of this important Fibonacci level at $3.355.02 is needed to clear the way for renewed tests above $3,400 and another run at the $3,500 zone. The overseas high at $3,343.51 now provides an intervening barrier.

Rising concerns about U.S. debt, heightened geopolitical tensions, and a lack of progress on trade have stoked haven demand this week. While a softer dollar is helping the cause, the rising yield environment is seen as a headwind.

The 20-day moving average that was violated on the way up yesterday is now serving as initial support at $3,297.70.  Minor congestion around $3,250 protects the halfway back point of the recent rally, which comes in at $3,235.31.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$0.652 (-1.95%)
5-Day Change: +$0.351 (+1.08%)
YTD Range: $28.565 - $34.543
52-Week Range: $26.524 - $34.853
Weighted Alpha: +9.98

Silver eked out a seven-week high just above $33.662 (25-Apr high) before retreating back below $33. The white metal was weighed by a setback in gold, a firmer dollar, and heightened EU growth risks.



Better-than-expected U.S. flash PMI readings for the U.S. offset some of the worries about Europe, and silver was able to subsequently regain the 33-handle. Nonetheless, I continue to view upticks above $33 as suspect as long as trade uncertainty prevails.

Resistance at $33.662/69 is reinforced, leaving key highs at $34.543 and $34.853 well protected. With the gold/silver still at historically high levels near 100, the upside for silver seems limited.

On the downside, let's call $33.00/$32.955 first support. The intraday low at $32.694 corresponds closely with the 50- and 20-day moving averages, making for a good downside barrier.


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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