Blog posts tagged with 'gold'

Good morning. The precious metals are mostly lower in early U.S. trading.

U.S. calendar features Initial Jobless Claims, Chicago Fed Index, EIA Data.

Gold moves within 1% of record territory, but silver holds below $31

OUTSIDE MARKET DEVELOPMENTS: 

President Trump will remain in the spotlight – and a hot topic at the World Economic Forum in Davos – as his policy agenda is set in motion. Trump's priorities this week have been border security, immigration, energy, reducing the size of government, and trade. 

The President seemed to temper some tariff threats since his inauguration but amplify others. The latest tariff number associated with China is 10%, much more modest than the 60% figure floated during the campaign.

The Canadian dollar and Mexican peso were hit hard by Trump's pledge to impose sweeping 25% tariffs on Canada and Mexico on February 1. Outgoing Canadian Prime Minister Trudeau seemed confident that a deal would be reached, yet there are rumblings of retaliatory tariffs.

“If the American economy is going to see the boom that Donald Trump is predicting they are going to need more energy, more steel and aluminum more critical minerals, more of the things that Canada sells to the United States every single day,” reminded Trudeau.

Mexican President Sheinbaum noted that the America First Trade Policy memorandum signed on Monday references a free trade agreement signed during Trump's first term. That agreement remains in effect and has clear processes for addressing disputes.

Trump also has the EU in his sights warning that they are "very, very bad to us. So they’re going to be in for tariffs." The EU's commissioner for the economy said, “If there is a need to defend our economic interests, we will be responding in a proportionate way.”

The ongoing rhetoric and inconsistent messaging continue to stoke uncertainty and worries about a trade war. Nonetheless, risk appetite remains elevated.

MBA Mortgage Applications rose a scant 0.1% in the week ended 17-Jan, following a 33.3% surge in the previous week. The 30-year year mortgage rate slipped to 7.02%, from 7.09%. It was the first decline in six weeks.

Leading Indicators fell 0.1% in December, in line with expectations, versus a positive revised +0.4% in November (was +0.3%). "Low consumer confidence about future business conditions, still relatively weak manufacturing orders, an increase in initial claims for unemployment, and a decline in building permits contributed to the decline," according to The Conference Board. The LEI's trend since the 2021 high belies the notion of U.S. economic resilience.

GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$11.80 (+0.43%)
5-Day Change: +$60.38 (+2.24%)
YTD Range: $2,607.16 - $2,763.00
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +33.89

Gold extended to set a 12-week high at $2,763.00 in overseas trade, helped by a defensive dollar. Suddenly the yellow metal is less than 1% off its all-time high.



Assuming a higher close today, gold will have posted gains in 15 of the past 23 sessions going back to 19-Dec. While the market is becoming overbought, there's all the significant resistances standing in front of the record high have been negated.

There continues to be market chatter about the massive inflows into Comex vaults. "Gold inventories on COMEX have swelled by more than 6 moz since the beginning of December, including additions of 676 koz last Wednesday which was the largest one-day addition of all time. Implied lease rates for very short-term gold lending are also very high, implying that liquidity on a less than one-month delivery is very tight," wrote Heraeus in a note.

Tight liquidity in market centers that sent ounces to the U.S. should continue to underpin the price. If those centers ultimately look to rebuild their stocks by buying on the open market, that could send gold to $3,000 and beyond.

Once new highs have been established, the next upside target would be $2,857.21 based on a Fibonacci projection. Further out, the $2,936 measuring objective off the symmetrical triangle breakout comes into play.

Setbacks into the range are likey to be viewed as buying opportunities. Today's Asian low at $2,742.63 should keep the more important $2,700 zone at bay.

Silver remains narrowly confined below $31, shrugging off the latest round of gains in gold. Trade worries are a headwind, but gold's strength and the soft dollar are providing some underpinning.

 

Last week's high at $30.892 corresponds closely with the 100-day moving avrerage at $30.916, preventing a move above $31. It's likely that there are some stops above $31, so a conving penetation could trigger gains back to $32.

That actually becomes the favored scenario upon new record highs in gold. A move above $32 would revive conficence in the underlying uptrend, but the December highs at $32.255/306 are seen as a formidble barrier.

Failure to clear $31 in short order would leave the white metal vulnerable back to the $30.141/$30.00 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.

Good morning. The precious metals are mostly higher in early U.S. trading.

U.S. calendar MBA Mortgage Applications, Leading Indicators.

Gold jumps to 11-week highs, while silver edges back toward $31

OUTSIDE MARKET DEVELOPMENTS: With an empty economic calendar today, markets are keeping a wary eye on Trump 2.0. President Trump signed dozens of executive orders on Monday and more are in the offing today.

Trump's second term begins with the U.S. economy on sound footing, certainly compared to other major economies. The President's "America first" agenda has arguably stoked some level of additional optimism and hence risk appetite. However, there's also a fair amount of uncertainty associated with Trump's policies, driving some hedging of bets.

The trade is particularly keen to discern the inflationary implications of Trump's trade policies and weigh that against the potentially disinflationary impact of his energy policies. Oil prices fell more than 1% on Monday and are off another 1% today.

Trump indicated he would not impose tariffs immediately but would direct federal agencies to first study existing trade policies before making decisions. While he did target Canada and Mexico for 25% tariffs beginning 01-Feb, this may primarily be to illicit help in controlling the borders.

Trade policies that seek to make the U.S. less dependent on imports are undoubtedly prompting our trading partners to find ways to be less dependent on U.S. consumers. That's a heavy lift to be sure, but it may ultimately accelerate the ongoing de-dollarization trend.

Less trade with the U.S., fewer dollars in foreign hands, and less overseas demand for Treasuries. That could provide an additional lift to interest rates.

Post-inauguration focus is shifting to next week's FOMC meeting and PCE data. Fed funds futures currently suggest the next rate cut won't happen until June. That may change when the Fed's favored measure of inflation comes out on 31-Jan.

Russian President Putin said he's open to discussions with President Trump on Ukraine. "We are also open to dialogue with the new US administration on the Ukrainian conflict," Putin said. "I want to emphasize that its goal should not be a brief truce... but a lasting peace," he added.

In the Middle East, the ceasefire between Israel and Hamas is holding. The exchange of hostages and prisoners is ongoing.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$16.46 (+0.61%)
5-Day Change: +$49.45 (+1.85%)
YTD Range: $2,607.16 - $2,731.03
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +31.89

Gold has risen to 11-week highs helped by yields and the dollar which continue to trade off their recent highs. The yellow metal is trading higher for a fourth straight week. While overall risk appetite remains elevated, uncertainty about the implications of the Trump administration's policies is driving some haven interest.



The convincing breach of $2,723.79/$2,724.09 cleared the way for a challenge of the $2,736.55 Fibonacci level (78.6% retrace of the decline from  2,789.68 to $2,541.42). Today's penetration of the latter clears the way for a retest of the all-time high at $2,789.68.

The breakout of the symmetrical triangle pattern bodes well for the eventual attainment of the $3,000 objective. An intervening measuring objective is noted at $2.936.

The threat of tariffs has been straining the gold supply chain since last month. The potential for tariffs has led to millions of ounces of gold being transferred from London to CME warehouses. I've seen figures as high as 6Moz.  

Citing an "RBC expert," Umicore reports that "London vaults are emptier than they have been in living memory." That same expert noted the largest single-day Comex inflow in history.

The resulting liquidity squeeze in London has led to gold lease rates reaching levels not seen in decades. Such dislocations tend to be short-lived.

However, with little left in London's coffers and ongoing uncertainty about tariffs, the current conditions could persist for some time. If the millions of ounces already transferred to Comex are here to stay, the bullion banks may turn to the market to rebuild London stocks, providing additional bullish impetus.

The 14-day RSI is currently at three-month highs and the developing overbought condition could keep the high end of the range protected initially. However, setbacks are likely to be viewed as buying opportunities.

Silver is trading higher for a second day, buoyed by 11-week highs in gold and a soft dollar. Optimism about the U.S. economy stemming from President Trump's 'America first' agenda is counterbalanced by growth risks elsewhere in the world and heightened trade worries.



Resistance at $30.892/$31.00 remains intact thus far. This area is highlighted by the 100-day moving average and last week's highs. I've been maintaining for some time, that $31 must be regained to set a more neutral tone and $32 needs to be cleared to revive interest in the underlying bull trend.

The $32 level would become increasingly attractive with fresh record highs in gold.

Like with gold, large physical silver transfers from London to Comex have been seen to avoid potential tariffs. Estimates suggest those flows are in excess of 20Moz.

As I suggested in today's gold commentary the transferred ounces to the U.S. may be here to stay. If London seeks to rebuild stocks, it could provide a significant tailwind for the market.

Failure to sustain gains above the 50-day moving average at $30.392, would leave silver vulnerable to further tests below the 200-day at $30.025. Key support is well defined by the double bottom at $28.802/783.


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 and silver higher in thin holiday trade, awaiting Trump's return to the White House 

OUTSIDE MARKET DEVELOPMENTS: U.S. markets are closed today in observance of the Martin Luther King Jr. holiday. Today is also inauguration day.

This week, the market's focus will be on Donald Trump's return to the White House and his initial actions on the border, immigration, and trade. However, risk-on sentiment prevails.

Treasury Secretary Janet Yellen sent a letter to congressional leaders on Friday saying "extraordinary measures" will be deployed on Tuesday this week to prevent the debt ceiling from being reached. Trump has expressed interest in eliminating the debt ceiling. The national debt is currently a staggering $36.4 trillion.

The ceasefire between Israel and Hamas went into effect yesterday. The exchange of hostages and prisoners has begun.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$5.52 (+0.20%)
5-Day Change: +$44.60 (+1.67%)
YTD Range: $2,607.16 - $2,724.09
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +30.65

Gold is trading modestly higher in thin holiday trading. Liquidity will diminish after the London close but trading should be active when Tuesday's Asian session begins this afternoon and the market starts to digest the early hours of the Trump administration.


 
The yellow metal set a ten-week high at $2,724.09 on Friday. A more convincing breach of the previous high at $2,723.79 (12-Dec) would bode well for a test of the $2,736.55 Fibonacci level (78.6% retrace of the decline from  2,789.68 to $2,541.42). 

Global ETFs saw net inflows of 19 tonnes last week, led by strong interest from European investors (15.9 tonnes). It was the largest net inflow in 13 weeks.

The CFTC's COT report for the week ended 17-Jan revealed an increase of 24.5k to 279.4k contracts, versus  254.9k in the previous week. That's a 12-week high in net speculative long positioning.

The increase in investor interest bodes well for a challenge of the all-time and range high at $2,789.68.  Further out, there is a measuring objective at $2.936, and $3,000 remains attractive as well.

The overseas low at $2,690.08 marks initial support. Secondary support at $2,657.28/$2,656.10 protects the more important convergence of the 20-, 50-, and 100-day moving averages at  $2,6454.23/$2,644.58/$2,642.22.

Silver is trading higher in thin holiday trade, but action is confined to the lower half of Friday's range. The inability of silver to sustain gains above the 100-day moving average and regain $31 last week leaves the downside vulnerable.



Global growth risks remain the greatest headwind for industrial metals such as silver. A retreat below the 200-day moving average at $30.011 would leave the $28.802/783 double bottom vulnerable to a retest.

Last week's COT report showed net speculative long positioning rose 5.2k to an eight-week high of 46.1k contracts, versus 40.9k. It was the biggest jump in net spec longs since the week of 25-Oct'24.

CFTC Silver speculative net positions

Silver must regain $31 to set a more neutral near-term tone. Last week's high at $30.956 reinforced this level. Today's overseas high at $30.565 provides an additional intervening barrier.


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.

1/17/2025

Gold consolidates above $2,700, while silver retreats from in front of $31

OUTSIDE MARKET DEVELOPMENTS: Israel and Hamas reportedly have finalized the ceasefire and hostage release deal. This dials back geopolitical risks in the region, but have no illusions, this is not a peace deal.

Geopolitical tensions overall remain high in the Middle East with Israeli hawks worried that the ceasefire will allow Hamas to regroup. Iran and its various proxies, along with the political upheaval in Syria, are seen as destabilizing.

The war between Russia and Ukraine intensified this week with Ukraine firing more U.S. and UK-supplied advanced missiles into Russia. The Kremlin retaliated with its own "massive" missile and drone attacks that targeted Ukrainian infrastructure.

China continues to act aggressively toward its neighbors in the South China Sea. A Philippine security official said this week that Chinese aggression is "pushing us to the wall."

President-elect Trump said he spoke with President Xi of China earlier today and covered many topics. While China's antagonism of Taiwan, the Philippines, Japan, South Korea, and others was not specifically mentioned, Trump said that he and Xi "will do everything possible to make the World more peaceful and safe!"

Time will tell if Trump can work with world leaders to further mitigate geopolitical tensions. I feel like there's some optimism on that front.

China claims it met its 5% growth target in 2024, led by exports. The threat of tariffs prompted many U.S. companies to accelerate their purchases of Chinese goods to build inventory. However, the ongoing property crisis leaves domestic demand weak and many Chinese feel worse off.

The IMF nudged up its 2025 global growth rate projection to 3.3% from 3.2% based largely on bullish expectations for the U.S. economy. They forecast the U.S. economy will grow at a 2.7% pace, +0.5% from their previous forecast.

The BoJ is widely expected to raise rates next week. This expectation has added some weight to the dollar.

This week's focus was on U.S. inflation data and the implications for Fed policy. The data were mixed, but the market assessed that inflation is sufficiently benign to allow for 50 bps in additional easing this year. Fed funds futures suggest that the next cut likely won't happen until June.

Next week's highlight is going to be Trump's inauguration on Monday and his initial raft of executive orders. Inauguration Day corresponds with the Martin Luther King Jr. Day holiday. U.S. markets and banks will be closed.

Housing Starts surged 15.8% to 1.499M in December, above expectations of 1.320M, versus a positive revised  1.294M in November (was 1.289M). Permits slipped 0.7% to 1.483M. Completions eased 3.6% to 1.544M.

Industrial Production rose 0.9% in December, above expectations of +0.3%, versus a positive revised +0.2% (was -0.1%). Cap utilization accelerated to 77.6%, above expectations of 77.0%, versus 77.0% in November,


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$5.59 (-0.21%)
5-Day Change: +$18.62 (+0.69%)
YTD Range: $2,607.16 - $2,724.09
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +30.60

Gold has retreated from Thursday's ten-week highs, consolidating gains registered earlier in the week. Nonetheless, the yellow metal is poised for a third consecutive higher weekly close and is up nearly 4% year-to-date.



Gold was helped this week by revived rate cut expectations, which knocked yields and the dollar off their recent highs. Ultimately, a ten-week high was established at $2,724.09.

A more convincing breach of the previous high at $2,723.79 (12-Dec) would bode well for a short-term challenge of the all-time and range high at $2,789.68. The $2,736.55 Fibonacci level offers an intervening barrier.

Further out, there is a measuring objective off the symmetrical triangle breakout at $2.936. Beyond that, I still think we could see $3,000 before the end of Q1.

Gold outperformed all major asset classes in 2024 at +27.2%. Its closest competitor was U.S. large-cap shares at +23.3%. While BitCoin rose 120.8% last year, its market cap and total number of investors remain relatively small.

It would be good to see confirmation of revived ETF inflows and an increase in net spec long positioning on Monday. For now though, that $2,789.68/$2,541.42 range remains intact.

Initial support at $2,700.00/$2,697.07 has contained the downside thus far. Additional support tiers are noted at $2,691.47 and $2,657.28/$2,656.10. The convergence of the 20-, 50-, and 100-day moving averages at  $2,648.53/$2,644.55/$2,640.35 is considered a key area.

Silver was unable to regain the $31 level this week, leaving the short to near-term tone vulnerable. The white metal retreated from Thursday's five-week high and appears that the string of higher weekly closes will end at two.



I have maintained for some time now that silver must regain the 31-handle to set a more neutral tone. More importantly, it has been my view that a move back above $32 was needed to provide confidence to the bull camp.

Apparently, the bulls were not heartened by China attaining its growth goal in 2024, nor the IMF's upgrade to U.S. growth expectations for this year.

Silver appears poised to close back below the 50-day moving average today ($30.431), which would leave the 200-day at $30.00 vulnerable to a test. Penetration of the latter would shift focus to this week's low from Monday at $29.553. Key support is defined by the $28.802/783 double bottom.


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.

1/16/2025

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.