Blog posts tagged with 'palladium'

Gold spent the week within the range, silver firms, but still appears poised for a lower weekly close

OUTSIDE MARKET DEVELOPMENTS: Market attention this week continued to be focused on tariff developments and geopolitical risks. However, economic and earnings data reveal a resilient U.S. economy with inflation in check, keeping market sentiment tilted toward risk-on.

On the heels of yesterday's retail sales beat for June, the preliminary read on consumer sentiment in July reached a five-month high of 61.8. Five-year inflation expectations hit a five-month low of 3.6% as tariff worries continue to moderate.

Estimates for Q2 GDP are mostly above 2%. The Atlanta Fed's GDP model currently projects 2.4%. However, some economists believe the massive Q1 net export subtraction associated with tariff front-running was reversed out in Q2, resulting in growth north of 4%. The BEA announces the Q2 advance report on July 30.

Fed Governor Waller continues to advocate for a July rate cut, although the market puts the prospect at just 4.7%. Waller was appointed by President Trump late in Trump's first term and is in the mix as a potential replacement for Jerome Powell as chair.

The market still sees October's FOMC meeting as the most likely timing for resumption of Fed easing. However, a 4% advance Q2 GDP print in a couple of weeks could certainly take September and October rate cuts off the table ... perhaps December too.

Housing Starts rose 0.058M to a 1.321M pace in June, above expectations of 1.300M, versus a revised 1.263M in May (was 1.256M). Permits rose to 1.397M from 1.394M. Completions fell to 1.314M from 1.540M.

Michigan Sentiment (Prelim) rose 1.1 points to a five-month high of 61.8 in July, above expectations of 61.5, versus 60.7 in June.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$12.00 (+0.36%)
5-Day Change: +$2.12 (+0.06%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,354.48 - $3,495.89
Weighted Alpha: +39.15

Gold heads into the weekend on an upbeat note, with help from a setback in the dollar. However, the yellow metal remains well contained within the narrowing range, and a close below $3,355.86 would notch the first lower weekly close in three.



The yellow metal is above the $3,311.51 midpoint of the broader range, and near the midpoint of the range-within-the-range at $3,352.57. Probes below the 20- and 50-day moving averages this week have attracted buying interest, preventing a retreat below $3,300.

More important supports are well defined at $3,284.61 (9-Jul low) and $3,256.02 (30-Jun low). The 100-day MA is at $3,231.98 and should rise to bolster the latter next week. The rising 20-week MA is at $3,238.19 and moving into this area, further fortifying the downside.

I still see risk for another run at the downside. I noted earlier in the week that gold ETF inflows slowed significantly last week as prices stagnated. As that stagnation continues, there may have been outflows this week as investors redeployed capital to more productive assets.

While gold has consolidated since mid-May, it's only about 5% off the record high set in April. Gold is less than 3% off its record high against the Indian rupee, which continues to weigh on jewelry demand.

Indian gold imports fell 40% YoY in June to a more than two-year low of 21 tonnes. India's gold imports in the first half of 2025 were also down 30% year-on-year at 204.1 tonnes, the lowest since H1'20, during the pandemic.

A breach of Monday's high at $3,374.11 is needed to mitigate the downside risk and clear the way for renewed tests above $3,400. Such a move would favor a retest of the 16-Jun high at $3,449.14. Above that, the record high at $3,500 would be back in play.

SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.193 (+0.51%)
5-Day Change: -$0.117 (-0.30%)
YTD Range: $28.565 - $39.119
52-Week Range: $26.524 - $39.119
Weighted Alpha: +35.99

Silver is trading higher for a third straight session but still appears on track for its first lower weekly close in three after Monday's rejection from above $39. Signs this week of a robust economy have sparked a bid in the industrial metals, with copper reaching a new high for the week. A softer dollar is helping the cause.



While Indian gold imports have fallen significantly due to record-high prices, Indian investors have taken a shine to silver. Imports nearly doubled to 197 tonnes in June from 109 tonnes a year ago. While that's off from the 544 tonnes imported in May, the overall trend appears positive.

Just over 50% of the decline from Monday's 14-year high at $39.119 has been retraced, bolstering confidence in the bullish scenario that calls for additional gains to $40 and $41.610. An eventual penetration of the latter would put the all-time highs around $50 in play.

On the downside, $38.092/000 marks first support. Wednesday's low at $37.557 is the more important level to watch in the week ahead. 


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 within the range amid heightened risk appetite and a firmer dollar

OUTSIDE MARKET DEVELOPMENTS: According to the New York Times, President Trump has drafted a letter to sack Fed Chairman Powell. The Fed Chair can only be terminated for cause, but recent questions about the $2.5 billion renovation of the Eccles Building could be laying the groundwork.

Trump acknowledged having discussions about replacing Powell, but deemed firing him as highly unlikely. “I don’t rule out anything, but I think it’s highly unlikely, unless he has to leave for fraud,” he said.

The market doesn't seem concerned at this point. Fed funds futures continue to price just under 50 bps in cuts by year-end, although today's generally favorable U.S. economic data tempered dovish expectations somewhat. 

Trump has said he believes the Fed funds rate is 300 bps too high. Presumably, Trump would pick a dove if he were to replace Powell.

The FOMC is pretty centrist at this point, with perhaps a slight hawkish tilt. A Trump-appointed dovish chair would still have to sway a majority of the committee.

Retail sales, Philly Fed Index, and initial jobless claims all beat expectations today. U.S. economic strength and a resilient labor market are stoking risk-on sentiment.

Dmitry Medvedev, deputy chair of Russia’s security council, said Moscow should consider preemptive strikes against countries supporting Ukraine. "We need to act accordingly. To respond in full. And if necessary, launch preemptive strikes," he said. 

Retail Sales rebounded 0.6% in June, above expectations of +0.1%, versus -0.9% in May. Ex-auto rose 0.5% on expectations of +0.3%, versus a revised -0.2% in May (was -0.3%).

Philadelphia Fed Index surged 19.9 points to a five-month high of 15.9 in July, well above expectations of -0.3, versus -4.0 in June. The employment component jumped 20.1 points to 10.3 from -9.8. Prices paid rose to 58.8 from 41.4, while prices received rose to 34.8 from 29.5.

Initial Jobless Claims fell 7k to a 13-week low of 221k in the week ended 12-Jul, below expectations of 230k, versus a revised 228k in the previous week (was 227k). Continuing claims edged up to 1,956k in the 5-Jul week, versus 1,954k in the previous week.

Import Price Index rose 0.1% in June, below expectations of +0.2%, versus a revised +0.4% in May (was unch). Ex-petro unch.

Export Price Index rose 0.5% in June on expectations of +0.1%, versus a revised -0.6% in May (was -0.9%).

Business Inventories were unch in May, in line with expectations, versus unch in April.

NAHB Housing Market Index ticked up to 33 in July, in line with expectations, versus 32 in June. “The passage of the One Big Beautiful Bill Act provided a number of important wins for households, home builders and small businesses,” said NAHB Chairman Buddy Hughes.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$21.54 (-0.64%)
5-Day Change: -$1.38 (-0.04%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,354.48 - $3,495.89
Weighted Alpha: +37.09

Gold retreated to approach the midpoint of the range at $3,311.51, as encouraging economic data stoked risk appetite and the dollar rebounded from Wednesday's losses to set fresh three-week highs.



Gold got a bit of an intraday boost when a key member of Russia's security council said Moscow should consider preemptive strikes against the West for their support of Ukraine. That would be a major escalation of the conflict and could draw NATO into the war.

Gold remains confined to its range, just above the midpoint of the range that has dominated since May, and just below the midpoint of the secondary range from June. Today's inability to sustain losses below the 20- and 50-day moving averages keeps a slight technical tilt to the upside.

Fresh highs for the week above $3,374.11 are needed to clear the way for a move back above $3,400. Penetration of the 16-Jun high at $3,449.14 would put the record high from April at $3,500 back in play.

If today's intraday rebound fades and gold closes below the 20- ($3,332.24) and 50-day ($3,324.27) MAs, it would suggest potential to $3,300, and possibly as low as $3,284.61 (9-Jul low) or $3,256.02 (30-Jun low). The $3,311.73/51 level provides intervening support.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.145 (-0.38%)
5-Day Change: +$0.860 (+2.32%)
YTD Range: $28.565 - $39.119
52-Week Range: $26.524 - $39.119
Weighted Alpha: +33.81

Silver continues to consolidate recent gains to 14-year highs above $39. The white metal is trading higher today, buoyed by good U.S. economic data and heightened risk appetite. A firm dollar poses a bit of a headwind.



The retreat from Monday's high at $39.119 is seen as corrective. The overbought condition that had developed has been relieved somewhat, and bulls are testing the upside. Scope remains for an upside extension to $40 with a secondary objective at $41.610 (78.6% retracement of the entire decline from $49.752 to $11.703).

Citi upped its three-month forecast for silver from $38 to $40. “We expect silver availability to tighten on consecutive years of deficit, sticky stockholders requiring higher prices to sell, and robust investment demand,” the Citi analysts wrote.

The analysts went on to say that it's "not just a catch-up trade to gold” but also a reflection of strong silver fundamentals. Fed rate cuts later in the year are also expected to help drive the rally, they added.

On the downside, Wednesday's low at $37.557 reinforces support marked by the previous cycle high at $37.288. Below that, the $37.198/$36.956 zone protects the 20-day moving average at $36.830.


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 lower in early U.S. trading.

U.S. calendar features Retail Sales (+0.1% expected), Philly Fed Index, Import/Export Price Indexes, Initial Jobless Claims, Business Inventories, NAHB Housing Mkt Index, TIC Data.

FedSpeak due from Kugler, Daly, Cook, & Waller.

Gold firms as cool PPI boosts rate cut expectations and weighs on the dollar

OUTSIDE MARKET DEVELOPMENTS: Producer inflation unexpectedly cooled in June, with headline PPI dropping to 2.3% y/y from 2.7% in May. Core PPI tumbled to 2.6% y/y from 3.2% in May.

Drilling a little deeper, goods prices did rise 0.3%, but that inflation was offset by a drop in transport and warehousing costs along with lower services prices. Nonetheless, one might reasonably expect that tariff-associated inflation would first be reflected in wholesale prices, but the trajectory since the beginning of the year has been downward.

The White House will make hay with the headline numbers, touting that tariffs have not led to higher inflation, despite warnings from President Trump's detractors. With inflation in check – at least for now – look for Trump to escalate pressure on Jerome Powell and the Fed to resume easing.

Most of yesterday's drop in rate cut expectations stemming from June CPI data have been reversed. While a July cut remains off the table, prospects for a 25 bps cut in September rebounded to 62.9% from 54.5% yesterday, versus 65.8% a week ago. Close to 50 bps in cuts are once again priced in for year-end, with the first 25 bps cut most likely to occur in October.

Yields and the dollar are under pressure. The dollar index has retreated from a three-week high set early in the U.S. session and appears poised to end its eleven-session win streak. Nearly half of the July rally has already been retraced. A breach of that retracement level and the 20-day MA at 97.69/64 would return credence to the longer-term downtrend.

Russia launched another massive drone and missile attack against Ukraine. The attack comes just a day after President Trump escalated pressure on Russia to end the war within 50 days or face massive tariffs.

MBA Mortgage Applications fell 10.0% in the week ended 11-Jul, versus +9.4% in the previous week. Purchases dropped 11.8%, while refis fell 7.4%. The 30-year mortgage rates rebounded to 6.82% from a 13-week low of 6.77%.

PPI was unch in June, below expectations of +0.2%, versus a revised +0.3% in May (was +0.1%); 2.3% y/y, down from a revised 2.7% in May (was 2.6%). Core was unch, below expectations of +0.2%, versus a revised +0.4% in May (was +0.1%); 2.6% y/y, down from a revised 3.2% in May (was 3.0%).

Industrial Production rose 0.3% in June, above expectations of +0.1%, versus a revised unch in May (was -0.2%). Cap use rose to 77.6% on expectations of 77.4%.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$9.42 (+0.28%)
5-Day Change: +$21.00 (+0.63%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,354.48 - $3,495.89
Weighted Alpha: +37.78

Gold rebounded to approach Monday's high for the week at $3,374.11, as cooler-than-expected PPI saw rate cut expectations rebound. This put pressure on yields and the dollar, providing additional lift for the yellow metal. Additionally, escalating trade tensions and the latest Russian attacks on Ukraine are underpinning safe-haven interest.



While firmer today, gold remains confined to the range that has dominated since mid-May. The midpoint of the broader range is at $3,311.51. The midpoint of the range-within-the-range is at $3,352.57. The 50-day MA is at $3,323.70 and the 20-day is at $3,334.02.

The above convergence of important levels heightens the significance of the symmetrical triangle apex at $3,327.24. This suggests a breakout could be close at hand. While my analysis continues to tilt in favor of an upside breakout, these stale prices are trying the patience of the bull camp.

Last week's ETF data illustrates this nicely. While global gold ETFs saw an eighth straight week of net inflows, it was a mere 1.8 tonnes. North American investors were net sellers for a second consecutive week.

This suggests to me that there is risk for a false downside breakout. A close below the 20- and 50-day MAs would heighten that risk. A retreat below $3,300 would leave more important supports at $3,284.61 (9-Jul low) and $3,256.02 (30-Jun low) vulnerable to tests.

On the other hand, fresh highs for the week above $3,374.11 will spark additional buying interest. However. $3,400 must be regained to clear the way for a retest of the 16-Jun high at $3,449.14. Above the latter, the record high at $3,500 would be back in play.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.362 (+0.99%)
5-Day Change: +$1.491 (+4.10%)
YTD Range: $28.565 - $39.119
52-Week Range: $26.524 - $39.119
Weighted Alpha: +33.86

Silver rebounded from a new low for the week, buoyed by encouraging inflation data and the corresponding drop in yields and the dollar. The white metal is still trading lower on the week after failing to sustain 14-year highs above $39, but other industrial metals are providing underpinning.



Copper remains well bid near record highs as a result of the recent tariff threat. Meanwhile, platinum is back on the bid after President Trump threatened to levy 100% tariffs on Russia if they don't end the war in Ukraine.

The U.S. gets 70% of its silver from Mexico and Canada. While silver is generally exempt from tariffs based on the US-Mexico-Canada Agreement, rising trade tensions and President Trump's unpredictability have elevated concerns. Canada and Mexico could also implement export controls on silver as a retaliatory measure.

Today's earlier low at $37.557 now protects the more important $37.288/244 level. The latter is marked by the previous cycle high and the halfway back point of the leg up from $35.369 (24-Jun low) to Monday's high $39.119.

The 61.8% retracement level of the aforementioned move and the 20-day MA are noted at $36.801/747. It would take a break of this zone to raise the prospect for a deeper correction, or at least another consolidative phase.

The halfway back point of the retreat from $39.119 peak comes in at $38.338. A breach of this would lend credence to the bullish scenario that targets $40 and $41.610.


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 edges lower as warmer inflation weighs on rate cut expectations, boosts dollar

OUTSIDE MARKET DEVELOPMENTS: Consumer inflation picked up in June, although it was largely in line with expectations. Headline CPI accelerated to 2.7% from 2.4% in May, while core CPI edged up to 2.9% from 2.8%.

U.S. yields are mostly higher as expectations for Fed easing later in the year ebb. This has pushed the dollar index to three-week highs.

Treasury Secretary Bessent noted on X that at least core inflation has come in at or below expectations since the Trump term began.

Speaking on Bloomberg TV earlier today, Bessent acknowledged that the process has begun to find a replacement for Jerome Powell. While Powell's term as Fed Chair doesn't end until May 2026, his position on the Board of Governors extends until January 2028.

Bessent reaffirmed that the White House is “not looking to fire” Powell, despite President Trump's regular denigration. However, Trump would like to see Powell resign once his term as chair expires.

“There’s been a lot of talk of a shadow Fed chair causing confusion in advance of his or her nomination, and I can tell you, I think it would be very confusing for the market for a former Fed chair to stay on," Bessent said.

Market attention remains fixed on tariff developments after this week's escalations, but risk appetite remains elevated. That suggests the trade remains optimistic that deals will be struck, and/or worries about tariff-driven inflation are waning.

Fiscal worries associated with the OBBB also seem to be waning. Custom duty collections hit a record $27.2 bln in June, surpassing the previous records from May ($22.3 bln) and April ($16.5 bln). The total for the fiscal year reached a record high $113 bln, an increase of 86% versus the same period last fiscal year. 

The tariff revenue helped produce a surprise $27 bln budget surplus for the month. It was the first monthly budget surplus since September that wasn't associated with an April tax revenue influx.

The September 2024 surplus may have been the result of a shift in the timing of outlays that artificially boosted the fiscal position in September. The next monthly surplus (not an April) was in January 2022.

CPI rose 0.3% in June, in line with expectations, versus +0.1% in May; 2.7% y/y, up from 2.4% in May. Core +0.2%, below expectations of +0.3%, versus +0.1% in May; 2.9% y/y, versus 2.8% in May. 

Empire State Index rebounded 22 points to a five-month high of 5.5 in July, above expectations of -8.5, versus -16.0 in June. "The prices paid index rose nine points to 56.0, pointing to a pickup in input price increases, while the prices received index held steady at 25.7, suggesting that selling price increases remained moderate," according to the NY Fed report.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$18.63 (+0.56%)
5-Day Change: +$50.47 (+1.53%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,354.48 - $3,495.89
Weighted Alpha: +38.75

Gold eased back toward the midpoint of the range after this morning's warmer inflation reading tempered rate cut expectations and boosted yields and the dollar. I consider the CPI data as largely benign and therefore not the catalyst for a range breakout we needed.



PPI comes out tomorrow, and import/export prices on Thursday. I'm not expecting anything disruptive in either case, suggesting the range is likely to hold.

The chart pattern that has emerged over the past couple of months is indicative of a symmetrical triangle, which is a continuation pattern. The technician in me continues to favor an eventual upside breakout.

The World Gold Council's Mid-Year Outlook seems to come to a similar conclusion, suggesting "gold may move sideways with some possible upside – increasing an additional 0%-5% in the second half." However, the WGC notes that increased safe-haven demand could push gold up an additional 10-15% from here if "economic and financial conditions deteriorate, exacerbating stagflationary pressures and geoeconomic tensions."

"On the flipside, widespread and sustained conflict resolution – something that appears unlikely in the current environment – would see gold give back 12%-17% of this year’s gains," according to the report.

Resilient risk-on sentiment and buoyant gold suggest the market may have a slightly different take. Regardless of shifts in risk appetite, central banks are likely to continue buying gold as reserve diversification. That has contributed to the heightened awareness of gold as portfolio diversification among individual investors.

A climb above $3,400 is needed to reinvigorate the bull camp, but Monday's high at $3,374.11 stands in the way. More importantly, penetration of the 16-Jun high at $3,449.14 is needed to put the record high at $3,500 back in play.

However, the consolidative tone is trying the patience of the bulls. This may prompt some short-term liquidations, which could drive gold back to the lower limit of the range-within-the-range at $3,256.02 (30-Jun low). Intervening support is marked by triangle support around $3,300 and last week's low at $3,284.61.

The 100-day (~$3,218) and 20-week (~$3,237) moving averages have climbed above $3,200, which should help keep the low end of the primary range at $3,127.12 at bay. Dips within the range should continue to be viewed as buying opportunities.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.170 (+0.46%)
5-Day Change: +$1.512 (+4.01%)
YTD Range: $28.565 - $39.119
52-Week Range: $26.524 - $39.119
Weighted Alpha: +35.74

Silver is trading lower on the week after failing to sustain yesterday's surge to 14-year highs above $39. The market was certainly overextended at the highs yesterday, so it was not surprising to see a pullback. Softer gold and a firmer dollar are adding some additional weight today.



The latest Trump tariff threats played a role in silver's recent price surge, although there hasn't been any official indication that the white metal's exempt status will be changed. That probably factored into selling interest above $39. I continue to believe threatened copper tariffs will be walked back.

Even with the retreat, silver is still up 30% YTD, modestly outpacing gold's performance so far this year. Strong industrial and investment demand, along with a persistent supply deficit, remain broadly supportive for silver.

Yesterday's breach of the $38.750 Fibonacci objective bodes well for a push to $40. Beyond the latter, the next Fibonacci target is $41.610 (78.6% retracement of the entire decline from $49.752 to $11.703).

Thus far, losses have stalled shy of the previous cycle high at $37.288. Below that, the $37.198/$36.956 zone protects the 20-day moving average at $36.693. 


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 sets two-week highs on rising trade tensions, as silver surges to 14-year highs

OUTSIDE MARKET DEVELOPMENTS: Trade tensions are back on the upswing after President Trump announced 35% tariffs on Canadian imports would go into effect on August 1. ″[Canada] has many Tariff, and Non-Tariff, Policies and Trade Barriers, which cause unsustainable Trade Deficits against the United States ... The Trade Deficit is a major threat to our Economy and, indeed, our National Security,” according to the letter sent to Canadian PM Mark Carney.

Trump also believes Canada is not doing enough to halt the flow of fentanyl. He went on to warn Canada not to retaliate. “If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 35% that we charge,” he wrote.

The S&P 500 and NASDAQ have retreated from Thursday's record highs as diminished risk appetite prompts profit taking ahead of the weekend. Gains in the DJIA this week stalled ahead of 45,000, leaving the Nov/Jan double top at 45,0054/071 intact.

The Administration also escalated pressure on the Fed and Chairman Powell this week. “The president is extremely troubled by your management of the Federal Reserve system,” wrote Russel Vought, the director of the Office of Management and Budget, in a letter to Powell.

With inflation in check despite trade uncertainties, and the economy and labor market resilient, Trump believes the Fed funds rate is 300 bps too high. However, markets are signalling a far less dovish reality, with Fed funds futures pricing just under 50 bps in cuts by year-end.

There's quite a bit of FedSpeak on tap next week, and the Beige Book comes out on Tuesday. Arguably, the two most dovish FOMC members are Governor Waller and Chicago Fed President Goolsbee, but nobody is even close to being on board with what President Trump is asking for.

"I think we're too tight, and we could consider cutting the policy rate in July," Waller said on Thursday. Fed funds futures suggest there's just a 6.7% chance of a 25 bps cut at the July 29-30 FOMC meeting.

After this week's thin economic calendar, the market is eagerly looking ahead to next week's inflation data. Expectations suggest both CPI and PPI will remain subdued with scope for modest downticks in annualized inflation rates.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$21.66 (+0.65%)
5-Day Change: +$13.59 (+0.41%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,354.48 - $3,495.89
Weighted Alpha: +38.82

Gold is setting new highs for the week, as heightened trade tensions spurred safe-haven demand. While the yellow metal appears poised for a second straight higher weekly close, gains above last week's high at $3,364.27 have been limited.

 

A more convincing breach of that level would bode well for a move back above $3,400. Penetration of the 16-Jun high at $3,449.14 would put the record high at $3,500 back in play.

The dollar index is trading higher for a ninth consecutive session, providing a headwind for gold. However, momentum on dollar upticks has been lackluster, and I still see the gains as corrective.

I also believe the recent consolidation in gold is a mere pause in the long-term uptrend. Price action since mid-May has formed a symmetrical triangle. An eventual upside breakout would project gold to new record highs.

When asked about a bear case for gold, the World Gold Council's Ray Jia thinks the yellow metal could face short- to mid-term pressure if:  

• Geopolitical or trade risks ease – cooling risk and uncertainty, or
• The dollar strengthens and yields rise – higher opportunity costs, or
• Gold investment demand (central bank purchases, or ETF buying, or retail bullion demand) slows – weakening momentum.

While hopes for a ceasefire in Gaza remain elevated, meaningful progress toward a ceasefire and peace deal in Ukraine has been elusive. President Trump seems pretty committed to creating a path to peace for both conflicts.

Despite recent upticks, the dollar index set a more than three-year low just last week. Meanwhile, global central banks remain tilted toward easing, and the Fed is widely expected to resume rate cuts later this year.

Central bank gold demand remains robust amid U.S. fiscal worries and ongoing de-dollarization. There is no indication that it will change anytime soon.

Global ETFs saw H1 inflows of $38 bln (322 tonnes), the strongest first half performance since H1'20, driven by geopolitical risks, trade war worries, and dovish central bank policies. Total global AUM hit a record $383 bln with holdings at 3,616 tonnes, the highest in 34 months.

On the downside, the important 30-Jun low at $3,256.02 (30-Jun low) is now well protected by tiers of support at $3,323.20 (today's low), and Wednesday's low at $3,284.61.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.519 (+1.40%)
5-Day Change: +$0.748 (+2.03%)
YTD Range: $28.565 - $37.682
52-Week Range: $26.524 - $37.682
Weighted Alpha: +28.70

Silver has surged to 14-year highs above $38, shrugging off any headwind provided by a firmer dollar. The white metal is being spurred by firmer gold prices and this week's record highs in copper.

 

I have maintained that the supply and demand fundamentals remain broadly supportive. The proliferation of computers and cell phones over the past decade drove a 78% surge in silver demand for electronics from 272 Moz in 2015 to 486 Moz in 2024. Solar demand surged 289% over the same period.

Meanwhile, demand has exceeded available supply since 2021. This year's deficit is expected to be 149 Moz, marking the fifth consecutive year of supply deficit. 

The Silver Institute notes that silver ETPs saw inflows of 95 Moz in H1, surpassing the total for all of last year. Total global holdings reached 1.13 Boz, within striking distance of the COVID-era high at 1.21 Boz.

Clearly, investors are taking a heightened interest in silver both as a strategic investment and a safe-haven alternative to gold. Silver tends to perform well during periods of uncertainty, high inflation, and currency depreciation.

The long-standing Fibonacci objective at $38.750 is within striking distance. Above that, the $40 level attracts. Beyond the latter, the next Fibonacci target is at $41.610.

Former resistance at $37.288/198 now marks first support, and protects today's overseas low at $36.956. The 20-day moving average has been an important support over the past week and comes in at  $36.556 today.

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.