Zaner Precious Metals Commentary
Wednesday, March 4, 2026Gold and silver recover somewhat after Tuesday's sharp losses
OUTSIDE MARKET DEVELOPMENTS: The US-Israel war against Iran has entered its fifth day, with intensified airstrikes continuing overnight and into today. Defense Secretary Pete Hegseth stated that more U.S. forces are on the way to the region, as officials acknowledge the conflict could extend beyond initial projections.
A U.S. Navy fast-attack submarine sank an Iranian Navy frigate in the Indian Ocean off the southern coast of Sri Lanka, marking the first torpedo sinking of an enemy ship by a U.S. submarine since World War II. U.S. Defense Secretary Hegseth described it as a "quiet death" for the warship.
The U.S. military has reported six service members killed in action during Operation Epic Fury, primarily from Iranian retaliatory strikes, including a drone attack on a facility in Kuwait. Israeli casualties from Iranian retaliatory missile and drone strikes stand at at least 11 civilians, with hundreds injured and no confirmed IDF military fatalities reported so far. Iranian state media reports over 1,000 deaths from strikes, and losses from the torpedoed frigate could be over 200.
President Trump is not ruling out deploying ground forces, although he doesn't believe it will be necessary. ‘There will be no boots on the ground.’ I don’t say it," adding that he believes troops "probably don’t need" to be sent but would consider it "if they were necessary."
Oil prices have surged sharply due to the effective halt of tanker traffic through the Strait of Hormuz and fears of prolonged supply disruptions. Brent crude was up much as 16% for the week in early trading, reaching levels last seen in July 2024. Continued upward pressure is likely amid the ongoing conflict and threats to regional exports.
Higher energy prices will boost inflation, which prompted the trade to pared expectations for two Fed rate cuts this year, pushing the dollar index 14-week highs. The next 25 bps rate cut is now not fully priced until October. Fed funds futures imply 41 bps of total easing for the remainder of the year.
Today's U.S. economic releases showed mixed but generally softer labor market signals amid ongoing geopolitical tensions. While the war may soften interest in domestic fundamentals in the short-term, the market will still be paying attention to Friday's jobs report. Consensus for February nonfarm payrolls is +59k. The unemployment rate is expected to hold steady at 4.3%.
Risk appetite has rebounded as investors increasingly look past the war to focus on hopes for potential de-escalation.
The New York Times reported that Iran's Ministry of Intelligence made contact with the CIA through another country's spy agency, offering to discuss terms for ending the conflict. The U.S. is treating that overture with a significant degree of skeptisism thus far.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$103.75 (+2.04%)
5-Day Change: +$22.28 (+0.43%)
YTD Range: $4,310.83 - $5,595.02
52-Week Range: $2,882.53 - $5,595.02
Weighted Alpha: +82.05
Gold has been quite volatile so far this week. Initial gains on Monday saw five-week highs above $5,400. However, selling interest emerged on Tuesday as rising concerns about oil prices – and broad inflation – weighed on Fed easing expectations. The dollar followed yields higher and gold ended the day down more than 4%.
However, tests below the 20-day moving average could not be sustained and the $5,000 support zone can be considered intact. A modestly more favorable tone is evident midweek as the trade assesses the most recent war developements and the yellow metal is consolidating in the lower half of this week's more than $400 range.
While I do maintain that the underlying fundamentals remain supportive, short to near term conditions are likely to remain quite volatile. Bulls will be quick to take profits on rallies, and look for limited risk opportunities to buy on dips. I'm not catching any longer-term bearish vibes out there, but sellers will absolutely step in when the right opportunity presents itself.
The 20-day MA comes in at $5,068.27 today and remains important on a close basis. The more important level to watch os $5,000/$4,997.76. Below that, a minor level at $4,960.86 protects the convergence of the low from 17-Feb at $4,847.74 and the rising 50-day.
A rise into the upper half of this week's range (so far) above $5,208.30 (reinforced by today's high at $5,206.10) would return a measure of credence to the bullish scenario that favors a retest if the record high at $5,595.02 and a resumption of the dominant uptrend. Additional upside barriers are marked by Tuesday's high at $5,379.89 and Monday's high at $5,418.84.
SILVER
OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$4.161 (+5.07%)
5-Day Change: -$3.598 (-4.03%)
YTD Range: $64.140 - $121.630
52-Week Range: $28.565 - $121.630
Weighted Alpha: +177.12
Silver is consolidating amid broader risk-on sentiment and some degree of optimism that the U.S. and Israel have things well in hand when it comes to Iran. However, Tuesday's sharp drop stemming from inflation fears, expectations for delaying Fed rate cuts, and a stronger dollar, has the bull camp on edge.
The range for the week is more than $18, and it's only Wednesday. That's enough volatility to rattle the nerves of even the most ardent bull.
With the war raging, I do expect gold and the dollar to garner most of the haven interest. That means silver may continue to lag on rallies with scope for ongoing high levels of volatility from war headlines, interest rate and dollar dynamics, and technical action.
That being said, silver remains in a strong bull trend, up a massive 161% YoY, driven by strong supply/demand fundamentals. I'd be inclined to give a little more credence to buying strategies within the broad range, but I would keep a tight rein on risk.
The failure of silver to sustain gains into the upper half of the broad $121.630/$64.140 range is troubling, suggesting further tests below $80 could be in the offing. A short-term close back above $90 would temper that concern somewhat.
Monday's high at $96.393 now provides a key barrier ahead of the next retracement level at $99.699 (61.8%), and perhaps more importantly, $100. Penetration of the latter is needed to return confidence to the underlying uptrend and put the $121.630 record high back in play.
Even as I write this, I realize how far apart some of these levels are. What we are experiencing this year is absolutely unprecedented, and it will take the market (and me) some time to adjust to the profound structural change in the silver market.
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.
