Blog posts tagged with 'palladium'

Gold sets another new record, while silver eases from 5-month highs

OUTSIDE MARKET DEVELOPMENTS: Personal income jumped 0.8% in February on expectations of +0.4%. Spending came in below expectations at +0.4%.

PCE inflation was in line with expectations at +0.3% (2.5% y/y). Core PCE inflation was slightly warmer than expected at +0.4% (2.8% y/y).

These data will not materially change the Fed policy outlook. The implied Fed funds rate for December is currently 3.6925%, reflecting expectations for 68 bps in easing by year-end, with the first 25 bps cut not fully priced in until July.

That leaves markets to focus on rising trade tensions and ongoing geopolitical risks. Risk aversion remains elevated heading into the weekend, and all the major stock indexes are under pressure.

Bloomberg reports that the EU is preparing a term sheet of concessions to avoid U.S. reciprocal tariffs that are supposed to go into effect next week. If there's a bright spot on the trade front, this is it.

Perhaps not surprisingly, the final Michigan consumer confidence reading for March was revised down to a 28-month low of 57.0 from 57.9, versus 64.7 in February. Meanwhile, one-year inflation expectations were nudged up to a 32-month high of 5.0% from a preliminary print of 4.9% and 4.3% in February.

Personal Income +0.8% in February, above expectations of +0.4%, versus a revised +0.7% in January (was +0.7%).

PCE +0.4%, below expectations of +0.6%, versus a revised -0.3% in January (was -0.2%).

PCE Chain Price Index +0.3%, in line with expectations, versus +0.3% in January; 2.5% y/y, unchanged from January. Core +0.4%, above expectations of +0.3%, versus +0.3% in January; 2.8% y/y, up from 2.7% in January.

Michigan Consumer Sentiment (final) was revised down to 57.0 from 57.9, versus 64.7 in February. Inflation expectations were revised up to 5% (1-year) and 4.1% (5-year).


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$17.63 (+0.58%)
5-Day Change: +$50.66 (+1.68%)
YTD Range: $2,607.16 - $3,084.78
52-Week Range: $2,231.10 - $3,084.78
Weighted Alpha: +39.79

Gold surged to another round of new record highs, spurred by persistent worries about a developing trade war, rising inflation expectations, and a soft dollar. The yellow metal is poised for its fourth consecutive higher weekly close.



The targeted $3,100 level came within striking distance, but I wouldn't be surprised to see some profit taking ahead of the weekend. Gold has gained more than 2% this week and nearly 9% from the last significant corrective low at $2,835.23 (28-Feb).

The market has become quite overbought on a short-term basis. Additionally, reports that the EU may be preparing to concede on some of its tariffs on U.S. goods may ease trade tensions somewhat.

An intraday chart point at $3,069.52/18 marks first support. Thursday's low at $3,018.51 stands in front of the more important $3,002.89/$3,000.00 level.

Today's earlier high at $3,084.78 now protects the $3,100.00 target. Above the latter, the $3,149.84 Fibonacci level remains a valid objective.

Silver set a fresh five-month high of $34.543 in early U.S. trading before turning lower on the day. The white metal is still poised for a higher weekly close, its third out of the last four.



The white metal continues to be supported by hard-charging gold, red-hot copper, and a weak dollar. While the multi-decade high set last year in silver at $34.853 appears to be safe this week, the trend remains decisively favorable, and any setback is likely to be viewed as a buying opportunity.

An eventual breach of the $34.853 peak would initially shift focus to the $35.348 high from October 2012. However, the trade would certainly start buzzing about $40 and $50 silver at that point.

While such a move is not out of the question, it would almost assuredly be a wild ride. Silver can be notoriously volatile, and if we are to see $50 silver, speculators are likely to get thrashed along the way.

Ross Norman of Metals Daily has written an interesting "rant" on silver. "[T]he commentariat are claiming silver is about to “go parabolic”, “the elites are losing control” … “massive short covering is imminent” … yet they never stop to consider the consequences of all this hyperbole," warns Norman.

When this talk kicks up, the bullion banks are always portrayed as evil market manipulators with huge short positions in the futures market that must be broken to allow silver to find its fair market price. The reality is that the banks are short the futures to hedge their physical holdings.

"[T]hey are price neutral – it's a mechanism to borrow or lend metal to companies for financing or inventory management, such as refinery work-in-process or mine production," says Norman.

Zaner Metals provides hedging services for clients in the precious metals vertical. They are invariably short the market against their physical inventory, so not surprisingly, I concur with Mr. Norman's assessment.

That being said, I do see the long-term fundamentals for silver as quite favorable. I think we do see $50 again, but it may take five years (or more?) to get there with many a wild fluctuation in the interim. Buy and hold has always been my strategy for silver.


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 on tariff and downgrade concerns, pulling silver to 5-mo highs

OUTSIDE MARKET DEVELOPMENTS: Markets have rotated back to a more risk-averse stance after the White House announced a 25% tariff on all imported passenger vehicles, which will take effect on April 3. The new levy will apply to all cars, SUVs, minivans, cargo vans, light trucks, and key auto parts.

Automakers' shares led stocks lower, and global trade tensions ratcheted higher. Countries that export cars to the U.S. are all contemplating retaliation. “The only solution for the EU will be to raise its own tariffs on American products,” said French finance minister Eric Lombard.

Ongoing uncertainty and worries about an all-out global trade war have weighed on investor and consumer sentiment. The market optimism that emerged late last year when Donald Trump won the Presidency has all but evaporated.

Moody's has warned of a potential downgrade to America's AAA debt rating. "The potential negative credit impact of sustained high tariffs, unfunded tax cuts and significant tail risks to the economy have diminished prospects that these formidable strengths will continue to offset widening fiscal deficits and declining debt affordability," said the ratings agency.

Q4 GDP was revised up to +2.4% in the third report from 2.3% previously, while the chain price index cooled to 2.3% versus 2.4% in the second report. While the revisions were favorable, they weren't significant enough to alter Fed expectations. Prospects for a June rate cut actually dimmed slightly.

Markets will be paying close attention to tomorrow's release of February personal income and PCE data. The market is anticipating 0.3% increases in both the headline and core PCE chain price indexes, which are the Fed's favored measures of inflation.

The dollar index backed off recent three-week highs as the market digests the latest tariff news and the downgrade risk. Recent dollar gains are seen as corrective, although a breach of Monday's low at 103.84 is needed to return focus to the downtrend that has dominated since the first of the year.

Goods Trade Balance narrowed to -$147.9 bln in February, outside expectations of -$135.0 bln, versus a revised -$155.6 bln in January (was -$153.3 bln).

Q4 GDP (3rd Report) was raised to +2.4% on expectations of +2.3%, versus +2.3% previously and +3.1% in Q3.

Initial Jobless Claims fell 1k to 224k in the week ended 22-Mar, below expectations of 225k, versus 225k in the previous week. Continuing claims fell 25k to 1,856k in the 15-Mar week from 1,881k in the previous week.

Pending Home Sales Index rose 2% to 72.0 in February from 70.6 in January. The market was looking for a more modest 1.5% increase.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$32.10 (+1.06%)
5-Day Change: +$6.89 (+0.23%)
YTD Range: $2,607.16 - $3,056.51
52-Week Range: $2,188.17 - $3,056.51
Weighted Alpha: +37.76

Gold has reached new all-time highs, driven by the latest tariff news and heightened worries about a global trade war. Moody's warning of a potential U.S. debt downgrade has further boosted the haven appeal of the yellow metal.



The breach of last week's record high at $3,056.51 clears the way for a push to the $3,100 level. Additional credence has also been lent to the $3,149.84 Fibonacci objective and the longer-term target at $3,500.

On the heels of BofA's gold forecast upgrades mentioned in yesterday's commentary, Goldman Sachs has also boosted its outlook. Goldman now sees gold at $3,300 by year-end, a $200 increase from its previous forecast of $3,100.

Like BofA, Goldman cited stronger-than-expected central bank demand and solid inflows into gold ETFs.“Central banks — particularly in emerging markets — have increased gold purchases roughly fivefold since 2022, following the freezing of Russian reserves,” wrote Goldman analysts. “We view this as a structural shift in reserve management behavior, and we do not expect a near-term reversal.”

The significance of support centered on the $3,000 level has been reinforced by recent price action. The $3,136.08/$3,131.15 zone now provides a minor intervening barrier.

Silver is trading at five-month highs, helped by fresh record highs in gold and copper, and a softer dollar. These factors seem to be overriding the negative demand implications from auto industry tariffs.



The auto sector accounts for over 70 Moz of silver demand annually. Silver loading in cars has increased significantly in recent years, particularly as EVs have become more popular. EVs contain roughly twice as much silver as a conventional ICE vehicle.

The breach of last week's high at $34.208 bodes well for the expected retest of the more than 22-year high set in October at $34.853. Beyond that, the $35.348 high from October 2012 would be in play.

I'd like to see silver close above $34.00 today, so I'll call that first support. Secondary support is marked by the low from early U.S. trading at $33.779.


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 features Goods Trade Balance (-$135.0 bln expected), Q4 GDP (3rd Rpt), Initial Jobless Claims, Pending Home Sales Index.

3/26/2025

Gold and silver consolidate recent gains, but uptrends remain highlighted

OUTSIDE MARKET DEVELOPMENTS: The Trump administration's ever-changing positions on tariffs and trade continue to stoke market uncertainty. Concerns that these policies will weigh on economic growth and revive inflation have heightened risk aversion and contributed to market volatility.

Consumption is the major driving force behind the U.S. economy, and high levels of uncertainty have eroded consumer sentiment in recent months. The Conference Board Consumer Confidence Index tumbled 7.2 points in March to a four-year low of 92.9.

"Consumers’ expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low," said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board.

The Atlanta Fed's GDPNow forecast for Q1 remained in negative territory at -1.8% for the 18-Mar reading, and the blue chip consensus has fallen below +2.0%. An update is slated for today.

The NY Fed's NowCast continues to paint a rosier picture, with a 2.72% Q1 estimate on 21-Mar.

Prospects for a June Fed rate cut have risen lately. The implied Fed funds rate for December is currently 3.7475%, reflecting expectations for 63 bps in easing by year-end.

Minneapolis Fed President Kashkari believes there is more work to be done on inflation, but sees policy uncertainties complicating the Fed's job. Nonetheless, he still thinks the central bank "ought to be able to reduce interest rates further" in the next year or two.

Russia and Ukraine have reportedly agreed to a ceasefire in the Black Sea. "All parties have agreed to ensure safe navigation, eliminate the use of force, and prevent the use of commercial vessels for military purposes in the Black Sea," said Ukrainian Defense Minister Rustem Umerov.

A broader ceasefire and peace deal remain elusive. However, this limited agreement is arguably progress and dials down the temperature in the region somewhat.

MBA Mortgage Applications fell 2.0% in the 21-Mar week, versus -6.2% in the previous week. The 30-year mortgage rate ticked down to 6.71%.

Durable Orders unexpectedly rose 0.9% in February, well above expectations of -1.2%, versus a revised +3.3% in January (was +3.1%). Ex-trans rose 0.7%, and shipments were +1.2%.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$3.55 (+0.12%)
5-Day Change: -$21.19 (-0.70%)
YTD Range: $2,607.16 - $3,056.51
52-Week Range: $2,174.69 - $3,056.51
Weighted Alpha: +36.79

Gold is consolidating above $3,000 and within striking distance of last week's record high of $3,056.51. The yellow metal continues to be underpinned by haven interest stemming from tariff uncertainty and geopolitical risks.



Four sessions of corrective/consolidative price action have somewhat relieved the overbought condition that developed last week. While further tests of the downside can not be ruled out, the trade should continue to view setbacks as buying opportunities.

The market is certainly good as long as it's above $3,000. A minor secondary chart point is noted at $2,982.85/$2,980.54. More important support is marked by the previous high at $2,955.40, which is now bolstered by the 20-day moving average at $2,960.12.

A short-term breach of last week's high at $3,056.51 would lend additional credence to the bullish scenario that calls for a push to $3,100. Beyond that, the next Fibonacci objective at $3,149.84 attracts.

BofA has upgraded its 2025 gold forecast to $3,063 from $2,750 previously. They now see gold at $3,350 in 2026, a $725 increase over their previous forecast of $2,625!

The bank believes the yellow metal could climb to $3,500 in the next two years if investment demand increases by 10%. They also think central banks could increase gold reserves from current levels around 10% to 30%! That would provide a huge tailwind for gold that could take prices beyond $4,000 in my opinion.

Recent ETF inflows suggest investors do indeed have increased interest in gold. Global ETF inflows were 31.3 tonnes last week, with North American investors accounting for nearly all of that. It was the eighth consecutive weekly inflow.

ETF.com data revealed that flows into the GLD ETF reached $2 billion on Monday. "This rush into gold signals a broader shift in sentiment—investors are diversifying away from U.S. assets, concerned about rising geopolitical risks, trade tensions and central bank policies that may further weaken the dollar," wrote CFP Kent Thune on ETF.com. 

"As gold strengthens, a self-reinforcing cycle has emerged: A weaker U.S. dollar makes gold more attractive to global investors, driving up demand, which in turn pushes prices higher and further erodes confidence in the dollar," added Thune.

Silver set a new high for the week at $33.897 in early U.S. trading before retreating into the range. The white metal continues to be underpinned by Chinese stimulus and German spending expectations.



Soaring copper prices are providing additional lift to silver. The two markets are pretty tightly correlated, as silver is primarily a byproduct of copper mining.

Copper has reached record highs on worries about shortages and front-running ahead of impending tariffs. Additionally, Glencore declared force majeure on shipments from its Altonorte smelter in Chile due to a furnace issue.

A climb back above $34 would bode well for the continuation of the uptrend off the December lows. A breach of last week's high at $34.208 would bode well for the expected retest of the more than 22-year high set in October at $34.853. Beyond the latter, the $35.348 high from October 2012 would be in play.

Today's overseas low at $33.570 marks first support. More substantial supports at $32.904 (Monday's low) and $32.767 (Friday's low) appear well protected at this point. The 20-day MA is at $32.930 and bolsters the secondary support 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 and silver retreat from recent highs

OUTSIDE MARKET DEVELOPMENTS: The Fed is in a bit of a bind after the FOMC's SEP revealed slower growth projections and hotter projections for inflation. Suddenly the financial press is rife with headlines that mention 'stagflation'.

The FOMC policy statement noted, "uncertainty around the economic outlook has increased."  Fed Chairman Powell thinks inflation is on the rise "partly in response to tariffs."

“Tariffs, raise prices and reduce output. So that’s a stagflationary impulse, which is different from saying this is stagflation,” said Chicago Fed President Goolsbee this morning on CNBC. Goolsbee still believes rates will be lower than they are today over the next 12 to 18 months.

Fed funds futures are leaning toward a 25 bps rate cut in June, but it is not fully priced in. The implied Fed funds rate for year-end is 3.6475%, suggesting the market believes there will be nearly 75 bps in cuts between now and then.

It's a quadruple-witching Friday with nearly $5 trillion in options expiring today, including for gold ETFs. The market is expecting high volume and high volatility today. Weak earnings already have shares on defense amid elevated risk aversion.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$13.90 (-0.46%)
5-Day Change: +$26.44 (+0.89%)
YTD Range: $2,607.16 - $3,056.51
52-Week Range: $2,159.42 - $3,056.51
Weighted Alpha: +39.48

Gold is defensive at the end of the week on profit-taking ahead of the weekend and options expiration-related activity. The yellow metal is still trading higher on the week and a close above $2,985.00 would confirm a third straight higher weekly close.



The World Gold Council estimated earlier in the week that there were "roughly US$8bn in net delta-adjusted notional in options contracts from US gold ETFs that expire Friday 21 March, and US$16bn in options on futures that expire on 26 March."

Today's setback comes a day after gold reached its latest record high at $3,056.51. The $3,049.34 measuring objective was satisfied and modestly exceeded. The next upside targets are at $3,100.00 and $3,149.84 (261.8% retracement of the most recent corrective move).

The WGC's Taylor Burnette makes an interesting observation in the report linked above: "Gold has remained, on average, above previous multiples of US$500/oz for nine days before pulling back. At the same time, however, gold has rebounded above the same level in just a few days four out of five times."

At this point, gold has registered four consecutive closes above $3,000. Do we have several more days above $3,000 in the offing, or is time for a multi-day pullback? Today's close may offer some insight.

Burnette also notes that it has taken gold 1,700 days on average, to achieve previous US$500/oz increments. However, the move from $2,500 to $3,000 took just 210 days. While gold's ongoing rise makes that $500 increment an ever-shrinking percentage of the gold price, it's still reflective of strong momentum.

Safe-haven interest in gold is likely to remain elevated amid ongoing trade uncertainty and rising geopolitical risks. Central bank demand also seems likely to remain strong this year.

Worries about revived inflation – even as global monetary policy remains biased toward easing – provide further support to gold. The recent drop in the dollar index to five-month lows lends additional credence to the bullish scenario.

President Trump signed an Executive Order on Thursday to boost American mineral production, streamline permitting, and enhance national security. “Minerals” covered by the order include critical minerals, uranium, copper, potash, gold, and any other element, compound, or material as determined by the Chair of the NEDC, such as coal.

While the prospect of increased supply may be contributing to today's setback, the fact that gold was specifically mentioned by the White House is an acknowledgment of the yellow metal's strategic importance. I view this as bullish for the metals.

Keep an eye on support at $3,003.04/$3,000.00 today. A close below this level would shift focus to the next tiers of support at $2,982.85/80.54 and $2.955.40.

Silver is trading lower for a third straight session after this week's gains faltered above $34. The white metal appears poised for its first lower weekly close in three amid heightened risk-off sentiment.

 

Germany's plans to borrow and spend on defense and infrastructure cleared the final Parliamentary hurdle today. So we may be seeing a bit of "sell the fact" in silver today. I still see German spending and Chinese stimulus as broadly supportive to the commodities complex.

While silver wasn't specifically mentioned in the executive order about increasing U.S. mineral production, it almost assuredly is considered a critical element. Silver tends to be closely correlated with both copper and gold.

The dive back below $33 leaves the 20-day moving average at $32.698 vulnerable to a test. I suspect renewed buying interest will surface ahead of $32, leaving last week's low at $31.872 protected.

Fresh cycle highs above Tuesday's peak at $34.208 would bode well for the scenario that still calls for a retest of the 22-year high set in October at $34.853. Beyond that, the $35.348 high from October 2012 would be in play.


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 remains well bid awaiting Fed decision

OUTSIDE MARKET DEVELOPMENTS: The Fed will announce policy later today. Despite rising uncertainty associated with trade and tariffs, the FOMC is expected to leave interest rates unchanged.

This will leave the market to focus on the forward guidance, economic projections, and Powell's presser. Recent action in Fed funds futures suggests the market is positioned for a hawkish hold.

The BoJ held steady on rates in line with expectations. The central bank expressed concerns about "high uncertainties...including the evolving situation regarding trade and other policies."

The BoE will also likely be on hold when they announce policy on Thursday. Amid rising trade and geopolitical tensions, a dovish tilt seems likely.

President Trump said he had a "very good call” with Putin on Tuesday with Russia agreeing to halt attacks on Ukrainian energy and infrastructure targets, and a prisoner exchange. “The next thing would be a full ceasefire and a deal,” Trump said.

Trump and Ukrainian President Zelensky are speaking today. Zelensky has expressed his desire to reach a peace deal. 

Israel broke the ceasefire with Hamas on Tuesday, launching airstrikes against numerous targets throughout Gaza. President Trump and Israeli PM Netanyahu laid the blame on Hamas for their refusal to release the remaining hostages and return to the negotiating table.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$0.99 (+0.03%)
5-Day Change: +$95.28 (+3.25%)
YTD Range: $2,607.16 - $3,044.13
52-Week Range: $2,151.06 - $3,044.13
Weighted Alpha: +40.47

Gold set a new all-time high at $3,044.13 in overseas trading before adopting a consolidative intraday tone ahead of today's Fed decision. Safe-haven interest and a weak dollar remain broadly supportive.

 

Barring some dramatic shift in the Fed's bias, the outlook for gold will remain favorable with dips offering buying opportunities. A more hawkish tilt may present some short-term downside risk, particularly in light of the redeveloping overbought condition.

Today's London low at $3,025.84 marks initial support and protects the more important $3,003.04/$3,000.00 level. Below the latter, $2,982.85/80.54 stands in front of the old record high at $2.955.40.

On the upside, the next target is the measuring objective at $3,049.34. Beyond that, $3,100 and the $3,149,84 Fibonacci projection will attract.

Silver is trading lower after failing to sustain five-month highs above $34 on Tuesday. Ongoing global trade uncertainty is offsetting some of the optimism associated with German spending plans and Chinese stimulus.  



From a technical perspective, recent gains bode well for an eventual challenge of the more than 22-year high set last year at $34.853 (22-Oct). Beyond that, the $35.348 high from October 2012 would be in play.

Monday's low at $33.495 has contained the downside thus far, but further retracement can't be ruled out. If this support gives way, previous resistance at $33.340 protects the $33.000/$32.961 level.


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.