Blog posts tagged with 'gold'

Gold sets another round of record highs, spurred by geopolitical tensions, labor market weakness

OUTSIDE MARKET DEVELOPMENTS: The focus this week is on inflation data and the implications for next week's FOMC meeting. The market consensus is for 0.3% month-on-month gains in both PPI (Wednesday) and CPI (Thursday).

Prospects for a September rate cut have increased in response to a second consecutive month of weak jobs data, highlighting growth risks. The BLS guidance released today reinforced the notion of labor market weakness by suggesting that job growth for the 12-month period through March was likely overstated by 911k.

At this point, at least a 25 bps cut at the September FOMC meeting seems all but assured, and there is a 10% chance of a 50 bps cut. Fed funds futures are pricing in 66 bps of easing by year-end.

If PPI and CPI show signs of accelerating inflation, the trade may walk back their dovish expectations somewhat for the remainder of the year. "Price stability remains the primary concern," said Atlanta Fed President Raphael Bostic last week.

Russia hit Kyiv on Sunday with the largest drone and missile strike of the war amid dimming hopes for a ceasefire and an eventual peace deal. President Trump confirmed on Monday that he is ready to deploy the "second phase" of sanctions against Russia.

Israel has confirmed that it targeted Hamas's political leadership in the Qatari capital of Doha. The attack has already been condemned by the UN and several Middle Eastern nations.

Meanwhile, Israel has ordered the total evacuation of Gaza City. "I say to the residents of Gaza, take this opportunity and listen to me carefully: you have been warned — get out of there!" said Israeli Prime Minister Benjamin Netanyahu. Israel seems increasingly committed to the complete destruction of Hamas, making a ceasefire unlikely.

NFIB Small Business Optimism Index rose 0.5 points in August to a seven-month high of 100.8, below expectations of 100.0, versus 100.3 in July. “Optimism increased slightly in August with more owners reporting stronger sales expectations and improved earnings," said NFIB Chief Economist Bill Dunkelberg

BLS Payrolls Guidance -911k, the largest revision on record, versus -818k in Mar'24.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$16.36 (+0.45%)
5-Day Change: +$121.18 (+3.43%)
YTD Range: $2,607.16 - $3,659.10
52-Week Range: $2,500.63 - $3,659.10
Weighted Alpha: +44.02

Gold 

Gold has pushed to another round of new all-time highs, spurred by safe-haven interest. Heightened geopolitical tensions, rising growth risks stemming from signs of labor market weakness, Fed easing bets, and a seven-week low in the dollar index are helping to perpetuate the rally. The yellow metal has set record highs for three sessions in a row, five of the last six.



Investors are contributing to the rally, as evidenced by solid ETF inflows over the past two weeks. Global ETFs saw net inflows of 35.3 tonnes in the 29-Aug week and 36.5 tonnes in the 5-Sep week, the strongest since April.

Sights are on the $3,700 psychological barrier next. Above that, a Fibonacci objective at $3,730.44 and the measuring objective off the triangle breakout at $3,743 attract.

Today's early U.S. low at $3,627.49 marks initial support. The $3,608.89/$3,600.00 zone provides a secondary barrier ahead of the low for the week at $3,580.13.

Gold is quite overextended at this point, so there is potential for corrective setbacks. Hot inflation numbers later this week could temper Fed easing expectations, triggering profit-taking. However, retreats into the range are likely to be viewed as buying opportunities. 


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.122 (-0.30%)
5-Day Change: +$0.260 (+0.64%)
YTD Range: $28.565 - $41.664
52-Week Range: $28.080 - $41.664
Weighted Alpha: +40.28

Silver is underperforming today, weighed by heightened growth risks, but remains confined to Monday's range. However, expectations of a Fed rate cut next week, strength in gold, and a soft dollar underpin the white metal.



Silver reached a 14-year high at $41.664 on Monday, registering a slight penetration of a key retracement level at $41.610 (78.6% retracement of the decline from the 2011 high at $49.752 to $11.703). Another new cycle high would lend considerable confidence to the bullish scenario that favors an eventual challenge of the $50 zone.

Intervening targets are noted at $42.00, $43.352 (Sep'24 high), and $44.167 (Aug'24 high). Like gold, recent gains in silver have created overbought conditions. However, the supply/demand dynamics remain broadly supportive.

Monday's low at $40.547 marks first support. Last Thursday's low at $40.413 should help protect the $40 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 trades at new record highs above $3,600 as cooling labor market spurs haven demand

Outside Market Developments: The much-anticipated jobs report reflects ongoing cooling in the labor market, amid uncertainty on tariffs and the fiscal situation. Only 22k new payrolls were recorded in August, and there were back-month revisions totaling -21k. June was revised down to -18k, the first negative NFP print since the pandemic.

Weakness in the jobs data has likely sealed the deal for at least a 25-bps rate cut on September 17-Sep. There is now a 10% probability for a 50 bps cut.

Market focus now shifts to next week's inflation data. Median expectations are +0.3% m/m for both August CPI and PPI. At this point, we'd have to see a significant acceleration in inflation to raise doubts about a September rate cut. That seems unlikely.

I've suggested in recent commentary that some FOMC members may be inclined to assert the Fed's independence at the next meeting in the face of significant White House pressure to ease. I still think there is some risk, but less so in light of today's jobs data and the absence of any pre-blackout Fedspeak to temper dovish market expectations.

Nonfarm Payrolls rose 22k in August, well below expectations of +83k, versus a revised +79k in July (was +72k). The unemployment rate ticked up to 4.3% from 4.2% in July. Hourly earnings rose 0.3%, in line with expectations. The average workweek was unchanged at 34.2 hours.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$6.04 (+0.17%)
5-Day Change: +$150.94 (+4.38%)
YTD Range: $2,607.16 - $3,598.89
52-Week Range: $2,487.06 - $3,598.89
Weighted Alpha: +44.81

Gold surged to new record highs above $3,600 after a second month of weak jobs data spurred haven interest. The yellow metal is poised for a third straight higher weekly close.



Signs of further labor market cooling boosted September rate cut expectations, weighing on yields and the dollar. This provided additional lift for gold.

The $3,601.32 Fibonacci objective was satisfied and slightly exceeded. The next levels to watch on the upside are $3,700 (psychological), $3,730.44 (Fibonacci), and $3,743 (measuring objective).

Minor support at $3,578.40/73.70 protects the intraday low at $3,540.30. Thursday's corrective low at $3,512.35 will be an important level to watch in the week ahead.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.069 (+0.17%)
5-Day Change: +$1.346 (+3.39%)
YTD Range: $28.565 - $41.459
52-Week Range: $27.732 - $41.459
Weighted Alpha: +50.28

Silver is trading higher, buoyed by fresh all-time highs in gold, more dovish Fed expectations, and a softer dollar. The white metal is underperforming, as the weaker jobs picture suggests potential for diminished industrial demand. Nonetheless, silver is still up more than 3% this week and will record a third straight higher weekly close.



Important resistance at $41.513/$41.610 was approached on Wednesday, but was left intact. This area must be cleared to lend credence to the extended bullish scenario and put record highs around $50 in play.

Today's intraday low at $40.558 stands in front of Thursday's corrective low at $40.413. Additional support is noted at $40.148 down to $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 Nonfarm Payrolls.

Payrolls increased by a mere 22k in August, below expectations of +83k. The unemployment rate edged up to 4.3%.

Gold and silver pull back from recent highs, awaiting tomorrow's jobs report

OUTSIDE MARKET DEVELOPMENTS: Further signs of a cooling labor market continue to stoke expectations of a rate cut this month. The probability for a 25 bps cut at the next FOMC meeting has risen to 97.4%, versus 86.4% a week ago.

The ADP Employment Report indicated private payrolls grew by just 54,000 in August, below the expected 75,000. Initial jobless claims rose to 237,000 last week, above the forecast of 230,000. Challenger layoffs rose 23,900 to 86,000. These data suggest downside risk for tomorrow's nonfarm payrolls report.

The revisions to Q2 productivity and ULCs suggest improved efficiency and reduced inflationary pressure from labor costs.

Markets remain on edge over tariff uncertainties. A federal appeals court ruled last week that most of Trump's global tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), are illegal. The ruling is stayed until October 14, giving the Trump administration time to appeal to the Supreme Court.

Challenger Layoffs rose 23.9k to 86k in August, versus 62.1k in July.

ADP Employment Survey showed private payrolls rose 54k in August, below expectations of 75k, versus a revised 106k in July (was 104k).

Initial Jobless Claims increased 8k to 237k in the week ended 30-Aug, above expectations of 230k, versus 229k in the previous week. Continuing claims eased to 1,940k in the 23-Aug week, versus a revised 1,944k in the previous week (was 1,954k).

Q2 Productivity was revised up to +3.3%, above expectations of +2.6%, versus a preliminary reading of +2.4% and -1.8% in Q1. ULC was revised down to +1.0%, below expectations of +1.4%, versus a preliminary reading of +1.6% and +6.9% in Q1.

Trade Deficit widened to -$78.3 bln in July, inside expectations of -$78.6 bln, versus a revised -$59.1 bln in June (was -$60.2 bln).

S&P Global Services PMI was revised down to 54.5 for August, versus a preliminary print of 55.4 and 55.7 in July.

Services ISM rose 1.9 points to a six-month high of 52.0 in August, above expectations of 51.0, versus 50.1 in July.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$18.32 (-0.51%)
5-Day Change: +$131.18 (+3.84%)
YTD Range: $2,607.16 - $3,578.40
52-Week Range: $2,487.06 - $3,578.40
Weighted Alpha: +42.04

Gold 

Gold turned modestly corrective in overseas trading after setting a fresh record high of $3,578.40 on Wednesday. The yellow metal had notched seven straight sessions of gains, and today may mark the eighth if a close above $3,559.26 is recorded. 



Intraday dowticks met renewed buying interest ahead of the $3,508.20/$3,500.00 zone, leaving the downside well protected. More substantial supports are noted at $3,470.62 (Tuesday's low) and $3,437.31 (Monday's low). The rising 20-day moving average is at $3.398.37.

Tariff uncertainties, geopolitical risks, rate cut bets, heightened worries about inflation and the fiscal situation are all contributing to haven interest. The recent rise in yields and a firmer dollar pose modest headwinds.

Amid ongoing White House pressure on the Fed to resume its easing campaign, Goldman Sachs has warned that a politicized central bank could have dire consequences for the broader market and drive gold toward $5,000. “A scenario where Fed independence is damaged would likely lead to higher inflation, lower stock and long-dated bond prices, and an erosion of the dollar’s reserve-currency status,” Goldman analysts said in a note.

“In contrast, gold is a store of value that doesn’t rely on institutional trust,” they added. It would take just a small allocation shift from Treasuries to gold to drive the price significantly higher.

My next upside target is $3,601.32 based on a Fibonacci objective. Above that, a measuring objective off the symmetrical triangle breakout suggests potential to $3,743. This week's gains also bolster confidence in the long-standing target of $4000.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.239 (-0.58%)
5-Day Change: +$1.860 (+4.76%)
YTD Range: $28.565 - $41.459
52-Week Range: $27.732 - $41.459
Weighted Alpha: +49.41

Silver has pulled back from Wednesday's 14-year high at $41.459, consolidating the last five days of gains. Setbacks are likely to attract buying interest as signs of weakness in the labor market bode well for a rate cut later this month.



With haven interest driving gold to all-time highs this week, the white metal is often viewed as a less expensive alternative. Silver is still more than 20% below its record high.

Yesterday's gains stalled just shy of targeted Fibonacci levels at $41.513 and $41.610. An eventual breach of the latter would lend considerable credence to the bullish scenario that calls for a run at the record highs around $50.

Today's intraday low at $40.413 protects more important supports at $40.148 (Tuesday's low) and $39.574 (Monday's low).  The rising 20-day moving average is well protected below $39 through the end of the 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 surges to record highs as silver reaches 14-year highs near $41

Outside Market Developments: U.S. markets begin September with sentiment tilted toward a risk-off stance. 
Tariff uncertainties, Fed rate cut expectations, sticky inflation, and upcoming economic data are all contributing to diminished risk appetite.

A federal appeals court ruled on Friday that most of the Trump administration's tariffs are illegal. The levees remain in place as the White House looks to the Supreme Court to settle the matter. If SCOTUS agrees to hear the case, initial arguments likely won't be heard until early 2026.

If SCOTUS refuses to hear the case or upholds the appeals court ruling, the $172.1.bln of tariff revenue collected thus far may have to be refunded. Treasuries are under pressure as the trade prices in heightened fiscal risks, and stocks are under pressure.

"[W]ith the help of the United States Supreme Court, we will use [tariffs] to the benefit of our Nation, and Make America Rich, Strong, and Powerful Again," wrote President Trump on TruthSocial. Negotiations with several key trading partners are ongoing, although the appeals court ruling throws a new wrinkle into the talks, stoking uncertainty.

The S&P Global Manufacturing PMI composite index reached a new high for the year in August, although other data today were less than encouraging to the narrative of a resilient U.S. economy. There were also troubling signs of reviving inflation within the PMI data. "Tariffs caused sharply higher costs that led to the steepest rise in average selling prices in three years," according to S&P.

"Companies have passed tariff-related cost increases through to customers in increasing numbers. The resulting rise in selling prices for goods and services suggests that consumer price inflation will rise further above the Federal Reserve's 2% target in the coming months."

At this point, Fed funds futures continue to reflect a market belief that the Fed is poised to resume its easing campaign this month, having been on pause since the beginning of the year. That could change if further signs of accelerating inflation become evident. PPI and CPI for August will be released next week, and median expectations for both are for modestly warmer readings.

The trade is currently focused on Friday's jobs report. More weak jobs data could seal the deal on a 25 bps rate cut in September. While the pre-FOMC blackout period is underway, I still see some risk that the Fed asserts its independence by holding steady. Upcoming data may provide them cover to do just that.

Before the next FOMC meeting, President Trump will try to get Stephen Milar confirmed to the Fed governor seat vacated by Adriana Kugler's resignation. Meanwhile, Governor Lisa Cook remains in her position, pending a hearing today in U.S. district court, where she could be granted injunctive relief.

S&P Global Manufacturing PMI was revised down to 53.0 in August from a preliminary reading of 53.3, versus 49.8 in July.  That's still the highest print since May 2022.

Manufacturing ISM rebounded 0.7 points in August to 48.7 on expectations of 48.8, versus 48.0 in July. Prices moderated to 63.7, versus 64.8 in July.

Construction Spending fell 0.1% in July, inside expectations of -0.2%, versus -0.4% in June.

RCM/TIPP Economic Optimism Index retreated 2.2 points to 48.7 for September, well below expectations of 51.8, versus 50.9 in August. “Concerns about inflation and the impact of tariffs remain high, with food prices standing out as the leading economic worry,” according to the report.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$9.45 (+0.27%)
5-Day Change: +$87.93 (+2.59%)
YTD Range: $2,607.16 - $3,508.20
52-Week Range: $2,474.08 - $3,508.20
Weighted Alpha: +38.38

Gold has extended to new all-time highs above $3,500, spurred by heightened tariff uncertainties, inflation worries, rumors about President Trump's health, and a technical breakout. The yellow metal is trading higher for a sixth straight session and is now up nearly 35% year-to-date, shrugging off higher yields and a stronger dollar.



Late-August/early-September is also when gold typically sees a seasonal increase in volatility as the summer doldrums wind down. The symmetrical triangle that formed over the summer months was viewed as a continuation pattern, favoring an eventual upside breakout of the range. 

Sights are now on the $3,601.32 Fibonacci objective. Above that, a measuring objective off the symmetrical triangle breakout suggests potential to $3,743. Considerable credence has also been returned to the long-standing target of $4000.

Former resistance at the $3,508.20/$3,500.00 zone now marks initial support, and should keep today's overseas low at $3,470.62 at bay. The yellow metal has really pulled away from the 20-day moving average, which is well protected at $3,380.77.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.213 (-0.52%)
5-Day Change: +$1.707 (+4.42%)
YTD Range: $28.565 - $40.849
52-Week Range: $27.732 - $40.849
Weighted Alpha: +46.43

Silver has extended to fresh 14-year highs near $41, after cracking the $40 threshold on Monday. The technicals and fundamentals remain broadly supportive.



The breach of the $40.396 Fibonacci objective bolsters confidence in the scenario that calls for a challenge of the $41.513/$41.610 zone. Above that, record highs near $50 would very much be in play. The $43.352 (Sep'11 high) and $44.167 (Aug'11 high) mark important intervening chart barriers.

Minor support at $40.885/754 protects today's early U.S. low at $40.148. Additional downside barriers are noted at $40 and $39.574 (Monday's low).


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.