Blog posts tagged with 'palladium'

Gold poised for higher weekly close as tariffs on some bars stoke uncertainty 

OUTSIDE MARKET DEVELOPMENTS: Market sentiment remains tilted toward risk-on, despite persistent tariff uncertainties and mounting growth worries. Strong tech sector earnings appear to be carrying the day.

Sweeping tariffs went into effect on Thursday, and President Trump touted that "Billions of dollars in tariffs are now flowing into the United States of America!” Arguably, many of those dollars are coming from within America.

Tariff revenue increased in recent months, but it is believed that U.S. importers were absorbing those levies. In some instances, exporters were making concessions to defray the added costs.

Now that the new tariff regime is in place, concerns have arisen that the burden will be shifted to consumers, potentially stoking inflation. Ultimately, there are many options for covering the additional costs associated with tariffs, and I suspect the measures used will vary widely depending on circumstances.

Key goals of Trump's tariff strategy are to protect current U.S. manufacturers and revive U.S.-based production. He seeks to do this by having U.S. companies repatriate key functions and for foreign companies to build products for U.S. consumers in America. President Trump has gotten substantial commitments of more than $5 trillion to do just that.

President Trump hosted Apple CEO Tim Cook at the White House on Thursday, where an expansion of an already considerable investment was announced. “Today, we’re proud to increase our investments across the United States to $600 billion over four years and launch our new American Manufacturing Program,” said Cook.

Will the ends justify the means? Only time will tell.

Today's economic calendar is empty. The market is looking ahead to next week's U.S. inflation data. Median expectations are +0.2% for both CPI and PPI.

St. Louis Fed President Musalem (centrist) believes the inflationary impact of tariffs will be short-lived. However, Musalem thinks the central bank is still missing on the inflation half of the dual mandate, and therefore, continued patience on restarting the easing campaign is warranted.

Israel is now planning to take full control of Gaza City, garnering condemnation from many quarters. Hamas has vowed "fierce resistance." Hopes for a ceasefire have dimmed considerably.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$10.79 (-0.32%)
5-Day Change: +$30.42 (+0.90%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,417.83 - $3,495.89
Weighted Alpha: +38.19

Gold futures surged to record highs above $3,500 in after-hours trading on Thursday, spurred by new worries that 100 oz and kilo gold bars will be tariffed. Spot gold remained comparatively subdued, edging to a new two-week high above $3,400 before retreating.



Spot gold remains entrenched in its range, but appears poised for a second consecutive higher weekly close. Meanwhile, December futures surged to a record high $3,534.10, a $130.86 premium over the spot high of $3,403.42.

In a ruling triggered by a request from MTB, U.S. Customs and Border Protection reclassified 100-ounce and kilo gold bars as "semi-manufactured" gold, making Swiss bars subject to reciprocal tariffs of 39%. These are the bars most commonly used by COMEX.

While Switzerland is a prolific producer of 100-ounce and kilo bars, there are other sources available that may have more favorable tariffs.  COMEX can also use 400-ounce gold bars for delivery under the 4GC futures contract, facilitated by the ACE mechanism that reconciles the size mismatch between large bars COMEX contract sizes.

Right now, the ruling is creating a lot of uncertainty in the gold space. I'm sure the industry is seeking clarity from Customs and Border Protection, and this story will continue to evolve over the next several days, contributing to market volatility.

While spot gold remains confined to the range that has dominated since mid-May, today's probes above $3,400 bode well for tests of important resistances at $3,435.01 (23-Jul high) and $3,449.13 (16-Jun high). Penetration of the latter would bode well for a retest of the record highs. An eventual move to new all-time highs above $3,500 would boost confidence in the previously established $4,000 objective.

On the downside, the 20- and 50-day MAs at $3,355.53/50.18 are bolstered by the lows from this week's previous sessions. A breach of Monday's low at $3,347.21 would suggest potential for a retreat into the lower half of the range below $3,313.56.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.019 (+0.05%)
5-Day Change: +$1.301 (+3.51%)
YTD Range: $28.565 - $39.517
52-Week Range: $27.237 - $39.517
Weighted Alpha: +40.35

Silver remains generally well bid at the high end of this week's range. While uncertainty in the gold market and a modestly firmer dollar pose headwinds, the white metal appears poised to notch its first higher weekly close in four.



We could see some additional profit taking ahead of the close, but the bull camp won't be terribly concerned by that unless silver closes below $38. The 20-day MA provides additional support at $38.086.

Thursday's two-week high at $38.477 stands in front of the next tier of Fibonacci resistance at $38.826. Above the latter, the 14-year high at 39.517 (23-Jul) would be back in play, as would the longer-term objective at $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.

Gold edges higher, underpinned by haven interest and weaker dollar

OUTSIDE MARKET DEVELOPMENTS: President Trump's sweeping tariffs of up to 50% went into effect today against dozens of countries. However, news of broad exemptions on chips stoked risk appetite. Stocks rose, led by tech.

The ever-changing landscape of U.S. tariffs since April has created considerable uncertainty. Tariff front-running led to dislocations in trade, economic growth, and price data. Now that inventories have been built and most of the import taxes have been implemented, perhaps the true impacts of Trump's tariff regime will become apparent.

We've certainly seen positive effects:

Tariff revenue reached a record monthly high of $28 bln in July, bringing the fiscal year-to-date total to $150 bln. In just 10 months, gross tariff receipts have far exceeded the previous record high set in FY2022 at $108.2 bln.

According to the White House, President Trump secured as much as $5.1 trillion in promised investments in the U.S., stemming from his tariffs and threatened tariffs. While it remains unclear how much of that will come to fruition, it's an impressive number.

It is widely believed that exporters and importers have been absorbing the cost of tariffs over the past several months. This has kept inflation in check. While there are now considerable pre-tariff inventories to draw down, price risks should start revealing themselves in the months ahead.

If there are to be additional supply chain and labor market disruptions associated with tariffs, those too should become apparent in the coming months. The Trump administration's deportation agenda creates another level of uncertainty for the job market and growth.

Tariff uncertainty has kept the Fed cautious this year, much to President Trump's chagrin. Nonetheless, on the heels of July's weak employment report, the Fed suddenly appears poised to resume its easing campaign in September.

Atlanta Fed President Raphael Bostic (centrist, non-voter) worries that tariff effects will persist and therefore believes only one 25 bps rate cut is warranted this year. “This question about whether tariffs are a one-time thing, or whether they’re going to be more persistent in their effects and might even cause structural changes, I think is perhaps the most important question that we have today,” Bostic said.

The BoE cut rates today on a 5-4 split vote. The statement reiterated the BoE's "gradual and careful approach to the further withdrawal of monetary policy restraint."

U.S. special envoy Steve Witkoff reportedly had a "highly productive" meeting with Russian President Putin and will now brief Ukrainian and NATO leaders. Trump and Putin may meet as soon as next week for a face-to-face discussion on achieving a ceasefire in Ukraine. The prospect of a Trump/Putin meeting dials back the recent uptick in geopolitical tensions and is contributing to today's rise in risk appetite.

Productivity (prelim) rebounded 2.4% in Q2, above expectations of +2.0%, versus a revised -1.8% in Q1 (was -1.5%). ULC (prelim) rose 1.6% in Q2, in line with expectations, versus a revised +6.9% in Q1 (was +$6.6%).

Initial Jobless Claims jumped 7k to 226k in the week ended 2-Aug, above expectations of 222k, versus a revised 219k in the previous week (was 218k). Continuing claims rose 38k to 1,974k in the 26-Jul week from a revised 1,936k in the previous week (was 1,946k).

Wholesale Sales rose 0.3% in June, above expectations of +0.2%, versus a revised -0.4% in May (was -0.3%). Inventories rose 0.1%, versus -0.3% in May.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$4.12 (+0.12%)
5-Day Change: +$86.91 (+2.79%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,381.66 - $3,495.89
Weighted Alpha: +37.29

Gold edged to a new two-week high as trade uncertainty and geopolitical risks continue to underpin the yellow metal within the range. The rebound in Fed easing expectations has weighed on the dollar this week, providing some additional lift.



The yellow metal has been unable to test back above $3,400 thus far, leaving important resistances at $3,435.01 (23-Jul high) and $3,449.13 (16-Jun high) protected. It would take a breach of the latter to clear the way for a run at new all-time highs above $3,500 and return confidence to the $4,000 objective.

On the downside, the 20- and 50-day MAs at $3,353.24/47.94 are bolstered by the lows from the previous three sessions. Monday's low at $3,347.21 is important, as new lows for the week would suggest potential for a retreat into the lower half of the range below $3,313.56.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.573 (+1.51%)
5-Day Change: +$1.575 (+4.21%)
YTD Range: $28.565 - $39.517
52-Week Range: $26.524 - $39.517
Weighted Alpha: +40.18

Silver is trading higher for a fifth straight session and set a new two-week high at $38.477. While the white metal has backed off that high as overbought pressures built, more than 61.8% of the recent decline has now retraced, suggesting the corrective low is in place.



Look for setbacks to attract buying interest around the 20-day moving average. I'd like to see a close above the 2-day at $38.080 today.

Today's earlier high now provides an intervening barrier ahead of the next tier of Fibonacci resistance at $38.836 (78.6% retracement). A breach of this level would clear the way for a retest of the 14-year high set on 23-Jul at  $39.517. Above that, $40 would attract.

Initial supports are marked by today's overseas low at $37.836 and Wednesday's low at $37.696. These protect the more important $37.382/337 zone, where the halfway back point of the recent bounce corresponds closely with Tuesday'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.

Gold easier within the range, but underpinned by haven interest

OUTSIDE MARKET DEVELOPMENTS: Recent soft economic data and signs of cracks in the labor market have swung market expectations decisively in favor of a September rate cut. Fed funds futures put the probability at 91.4%, up from 46.7% a week ago and 64.0% a month ago. The trade is currently pricing 57 bps of easing by year-end.

The rise in rate cut expectations since Friday's weak jobs report knocked the dollar index off the nine-week high set last week at 100.26. Just over half of the recent corrective rally in the dollar has already been retraced, and the 20-day moving average is under pressure.



President Trump is poised to name a replacement for Fed Governor Adriana Kugler, who announced last week that she would step down this week. “I have a couple of people in mind,” said Trump. “I’ll be announcing that probably over the next couple of days.”

Former Fed Governor Kevin Warsh and Kevin Hassett, the current chair of the President’s Council of Economic Advisors, are thought to be front-runners for the open position. Either could be tapped down the road to replace Jerome Powell as chairman.

"I’d say Kevin and Kevin, both Kevins are very good,” Trump hinted. If I were a betting man, I'd put my money on Hassett.

Hassett has been more consistently dovish. Warsh, on the other hand, has tilted toward hawkish views in the past. Only recently have his comments on monetary policy been more aligned with Trump.

While a non-voting member of the FOMC this rotation, Minneapolis Fed President Neel Kashkari told CNBC this morning that the central bank is increasingly supportive of a resumption of the easing cycle. "In the near term, it may become appropriate to start adjusting the federal-funds rate,” he said.

Kashkari is a moderate hawk, but acknowledged that "the economy is slowing." He also noted ongoing uncertainty associated with tariffs. He said we may not know the “ultimate effects of tariffs” for "quarters or a year or more.”

Trump tacked on an additional 25% tariff on India that will go into effect in 21 days, as a penalty for its purchases of Russian oil. This is in addition to the 25% tariff that begins tomorrow.

Trump is also threatening to ratchet pharmaceutical tariffs higher to as much as 250%. "We want pharmaceuticals made in our country," Trump told CNBC.

The Russian and Chinese navies are conducting anti-submarine warfare exercises in the Sea of Japan, days after President Trump said he had deployed two nuclear submarines closer to Russia. That move was precipitated by Russian saber-rattling.

U.S. special envoy met with Putin today. The Kremlin said that the meeting was "constructive." Russia faces additional sanctions and tariffs if a ceasefire with Ukraine is not reached by Friday.

MBA Mortgage Applications rose 3.1% in the week ended 1-Aug, versus -3.8% in the previous week. The 30-year mortgage rate 


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$17.72 (-0.52%)
5-Day Change: +$94.15 (+2.87%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,381.66 - $3,495.89
Weighted Alpha: +36.85

Gold moderated from yesterday's two-week high as special envoy Steve Witkoff arrived in Moscow with the hopes of negotiating a ceasefire between Russia and Ukraine before President Trump's Friday deadline. However, the yellow metal remains confined within its range, awaiting fresh inputs.



However, several factors continue to underpin gold. Ongoing trade and fiscal uncertainty, persistent geopolitical risks, and rising concerns about growth risks are supporting haven interest. Revived Fed easing expectations are also weighing on the dollar.

With gold in the upper half of that range, and above the 20- and 50-day moving averages, the technical bias tilts to the upside and short-term tests back above $3,400. Formidable chart resistances at $3,435.01 (23-Jul high) and $3,449.13 (16-Jun high) must be cleared to confirm potential back to the record highs around $3,500. An eventual move to new all-time highs would revive confidence in the previously established $4,000 objective.

Bloomberg reports that bullion held in Shanghai Futures Exchange warehouses has nearly doubled in the past month to reach an all-time high. “So many people were piling into futures that prices shot up above physical gold. That created an opportunity for others to step in and deliver gold into the system,” said John Reade of the World Gold Council. It's another sign of resilient demand for gold investments in China, according to Bloomberg.

On the downside, the 20- and 50-day MAs at $3,350.18/46.58 are bolstered by Monday's low at $3,347.21. A breach of this zone would set up a softer tone within the range, highlighting the midpoint of the broader range at $3,313.56.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.035 (-0.09%)
5-Day Change: +$0.689 (+1.86%)
YTD Range: $28.565 - $39.517
52-Week Range: $26.524 - $39.517
Weighted Alpha: +37.79

Silver has edged to a new high for the week, helped by resilient gold, and rising rate cut expectations that have weighed on the dollar. However, resistance at the $38 zone has contained the upside thus far.



A climb above $38 would shift focus to the next tiers of Fibonacci resistance at $38.283 and $38.826. Above the latter, potential back to the 14-year high at 39.517 (23-Jul) would be confirmed. Further out, $40 remains a valid target.

Supply/demand dynamics remain broadly supportive. Industrial demand for silver is expected to remain strong, so fluctuations in investment demand will be the source of uncertainty. While YTD gains of more than 30% to reach 14-year highs are certainly appealing to investors, one could argue that the white metal is overextended. Silver's volatility can also scare away investors.

Today's intraday low at $37.698 marks first support and protects Tuesday's low at $37.337. Monday's low at $36.700 is now below the 50-day MA and is the more important level. New lows for the week from here would be troubling for the bull camp.


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 rebounds within range as weak jobs data revives hopes for rate cuts, dollar falls

OUTSIDE MARKET DEVELOPMENTS: President Trump signed an executive order Thursday evening that raises tariffs on dozens of countries. Although today is the deadline, the new tariffs will not take effect until August 7, reportedly to allow time to update the tariff schedule.

Trump indicated that he is open to more deals even now that the deadline has passed. "It doesn’t mean that somebody doesn’t come along in four weeks and say we can make some kind of a deal," he said.

Weaker-than-expected U.S. jobs data have raised concerns that cracks in the labor market are starting to form. Nonfarm payrolls came in at 73k, below expectations of 102k. The unemployment rate ticked up to 4.2%.

However, back-month revisions of -258k and weakness in the household survey data were troubling. The survey reflected a decline of 260k workers, with the participation rate slipping to 62.2%, the lowest since November 2022. The reversal in immigration flows was likely a contributing factor.

Some manufacturing sector weakness was also revealed in today's data dump. Manufacturing PMI fell into contraction for the first time this year, and ISM hit a nine-month low. The jobs report showed an 11k contraction in manufacturing jobs.

The trade quickly priced in a 25 bps rate cut for September, and 50 bps of easing by year-end is back in play. The dollar index plunged more than 1.5% from a nine-month high in European trading. Yields and stocks are broadly lower, as risk-off sentiment prevails.

Persistent tariff uncertainty is certainly contributing to risk aversion amid ongoing speculation about retaliation risks and inflation implications as the higher levies get deployed. The market now shifts attention to the August 12 deadline for China to finalize a deal.

Nonfarm Payrolls +73k in July, below expectations of +102k, versus a revised 14k in June (was +147k). The unemployment rate rose to 4.2%, versus 4.1% in June. Hourly earnings +0.3%, in line with expectations, versus +0.2% in June. Workweek ticked up to 34.2 hours.

S&P Manufacturing PMI was revised up to 49.8 for July, versus a 49.5 preliminary read and 52.9 in June.  The update confirms the first move into contraction territory this year.

Manufacturing ISM fell 1 point to a nine-month low of 48.0 in July, below expectations of 49.5, versus 49.0 in June. Prices declined to 64.8 from 69.7 in June.

Construction Spending fell -0.4% in June, below expectations of +0.1%, versus a revised -0.4% in May (was -0.3%).

Michigan Sentiment Final was revised down to 61.7, versus a 61.8 preliminary print and 60.7 in June. 


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$8.60 (+0.09%)
5-Day Change: -$5.47 (-0.16%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,369.10 - $3,495.89
Weighted Alpha: +34.84

Gold surged back into the upper half of the well-defined range, setting new highs for the week. The yellow metal is being spurred by the NFP miss, revived expectations of rate cuts in H2, and retreats in yields and the dollar. 



An uptick in trade uncertainty contributed to risk-off sentiment, boosting haven interest just a day after gold notched its first lower monthly close (albeit minimal) of the year. A close above $3,337.01 is needed to avoid a third consecutive lower weekly close.

The fact that the 100-day moving average and the $3,256.02 low from 30-Jun successfully contained losses earlier in the week bodes well for the longer-term bullish scenario. Today's rebound back above the midpoint of the range, Monday's high, and the 20- and 50-day moving averages offer further encouragement to the bull camp.

I'd like to see a close above those moving averages at $3,340.51/42.29 to confirm scope for renewed probes above $3,400. Minor intervening chart points are noted at $3,352.57 (midpoint of range-within-the-range), $3,372.59 (25-Jul high), and $3,392.11 (24-Jul high).

If incoming data reinforce the notion that the labor market is weakening, we could see rate cut expectations for year-end build to 75 bps. That would reinvigorate selling interest in the dollar and provide some lift for gold, putting record highs around $3,500 back in play.

Bottom line, gold remains well contained within the range, and the range-within-the-range, just now in the upper half of the former and right at the midpoint of the latter. It doesn't strike me that a breakout in either direction is imminent.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.222 (-0.60%)
5-Day Change: -$1.196 (-3.13%)
YTD Range: $28.565 - $39.517
52-Week Range: $26.524 - $39.517
Weighted Alpha: +30.50

Silver has caught a bit of a bid, helped by new highs for the week in gold and a weaker dollar. However, price action remains confined to yesterday's range, and a third straight lower weekly close appears to be on tap.



Tests below the 50-day moving average at $36.538 have attracted buying interest over the past two sessions, leaving the $36.257 Fibonacci level intact. However, indications of manufacturing sector weakness and this week's copper rout pose headwinds.

A close above $37 today would ease short-term pressure on the downside. However, the 20-day MA at $37.861 and the halfway back point of the recent correction at $37.902, call it $38, must be regained to reinvigorate the bulls. 


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.