Blog posts tagged with 'palladium'

Gold and silver reach new cycle highs, spurred by haven interest

Outside Market Developments: The U.S. government entered a partial shutdown at midnight after a fractious Congress failed to pass funding legislation for the new fiscal year. The impasse stemmed from partisan disputes, with Democrats rejecting a Republican continuing resolution over its lack of extensions for Affordable Care Act subsidies and other health benefits. Meanwhile, the Democrats argue that the GOP's claims that their version of the CR is "clean" are untrue.

AS many as 800,000 non-essential federal workers were furloughed without pay until funding can be restored. However, the Trump administration is seeking to terminate tens of thousands of those workers as a means to reduce the federal workforce and save billions of dollars.

While the shutdown stokes ongoing economic and fiscal uncertainty, these shutdowns tend not to last very long. Since 1990, they have averaged 8-14 days, although the 2018-2019 impasse lasted 35 days amid similar partisan healthcare disputes.

Historically, U.S. stocks on average have posted gains during past shutdowns, so perhaps not surprisingly, the market is tilted toward risk-on today. MarketWatch points out that it will be "business as usual for much of the country, including for federal workers deemed essential, and that any missed paychecks for Uncle Sam’s employees will come through once the shutdown ends." The potential for RIF firings this time around is a bit of a wildcard.

The trade continues to take its cues from rate cut expectations. Today's weak ADP employment survey and the downside risk for nonfarm payrolls (if they get reported) has another 25 bps cut essentially fully priced in for October. Fed funds futures currently imply 68 bps of easing by year-end.

The dollar index is trading lower for a fourth straight session, but price action remains confined to last week's range thus far. The DX set a more than three-year low on 17-Sep and has since been mildly corrective to consolidative.

President Trump's 20-point Gaza peace plan has been warmly received by a number of key stakeholders. While Hamas hasn't officially responded, the terrorist organization is unlikely to agree to the deal, as it would face disarmament and exclusion from governance moving forward.

MBA Mortgage Applications fell 12.7% in the week ended 26-Sep, versus +0.6% in the previous week. The 30-year mortgage rate rebounded to 6.46% from a 12-month low of 6.34% last week.

ADP Employment Survey showed private payrolls fell 32k in September, below expectations of +50k, versus a revised -3k in August (was +54k). "Despite the strong economic growth we saw in the second quarter, this month's release further validates what we've been seeing in the labor market, that U.S. employers have been cautious with hiring," said ADP's Chief Economist, Dr. Nela Richardson.

Construction Spending - DELAYED

S&P Global Manufacturing PMI was 52.0 in September, unchanged from the preliminary print, versus 53.0 in August. 

Manufacturing ISM rose 0.4 points to a seven-month high of 49.1 for September on expectations of 49.0, versus 48.7 in August. Prices eased to 61.9 from 63.7 in August.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$29.10 (+0.75%)
5-Day Change: +$140.38 (+3.76%)
YTD Range: $2,607.16 - $3,895.23
52-Week Range: $2,541.42 - $3,895.23
Weighted Alpha: +51.05

Gold notched a new record high of $3,895.23 in overseas trading before stabilizing somewhat. The government shutdown adds to pervasive uncertainty, stoking the haven bid.



It’s hard not to remain bullish. September saw the biggest monthly percentage gain since August 2011. Gold has posted gains in all but one month (July) so far this year. In fact, there haven’t been more than two consecutive lower monthly closes since late 2022.
 
Gold has also posted gains in seven of the last eight quarters. The yellow metal notched solid double-digit gains in Q1 and Q3 this year.

A move above $3,900 would bode well for the anticipated push to $4,000. Above the latter, the next Fibonacci objective off the last meaningful corrective phase comes in at $4,103.32.
 
While gold is quite overbought at this point, short-term setbacks are likely to be viewed as buying opportunities amid ongoing geopolitical, trade, and fiscal risks, easing expectations, sticky inflation, de-dollarization, and central bank demand.

Today's Asian low at $3,853.62 is being pressured. Fresh intraday lows and a lower close would suggest potential back to $3,800.00/$3,793.52.  More substantial support is marked by Mon day's low at $3,760.05.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.592 (+1.27%)
5-Day Change: +$3.471 (+7.90%)
YTD Range: $28.565 - $47.549
52-Week Range: $28.565 - $47.549
Weighted Alpha: +62.43

Silver has resumed its march higher after a brief pause on Tuesday, establishing a new 14-year high at $47.826. Haven flows seem to be overwhelming any growth risks stemming from the government shutdown. Today's good manufacturing sector data, relentless gold, heightened Fed easing expectations, and a weaker dollar provide additional tailwinds.

 

Silver rose more than 17% in September, its fifth consecutive monthly gain and the biggest since July 2020. The Q3 gain was 29.2%, the biggest since Q4 2010. 

Silver moved within striking distance of the targeted $47.973/$48.105 zone before moderating intraday. A short-term violation of this area would lend further confidence to the bullish scenario that calls for a challenge of record highs around $50. Weakness in the gold/silver spread suggests potential for ongoing silver outperformance.

Intraday support at $47.108 protects the low for the day at $46.631. Tuesday's low at $45.825 is the more important level to watch.


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 Case-Shiller Home Price Index, FHFA Home Price Index, Chicago PMI, Consumer Confidence, JOLTS Job Openings, Ag Prices.

FedSpeak due from Jefferson, Collins, Goolsbee, and Logan.

Gold and silver start the week with new record and 14-year highs, respectively

OUTSIDE MARKET DEVELOPMENTS: The U.S. federal government is on the brink of a partial shutdown starting October 1, with Congress deadlocked on a funding deal. The White House has directed agencies to prepare for permanent mass firings of federal workers in non-essential programs. Both parties seem more concerned about ensuring the other side gets the blame rather than striking a deal to fund the government.

Even if a CR is agreed upon, it would likely only fund the government for about seven weeks as negotiations on full-year appropriations continue. Any relief provided by a CR would be short-lived.

The focus at the end of the week will be on the September jobs report. However, BLS data processing and publication are deemed non-essential operations, so a government shutdown could delay the report.

Median expectations are +50k jobs, a continuation of recent weakness. The unemployment rate is expected to remain unchanged at 4.3%.

President Trump has proffered a 21-point peace plan for Gaza. Key elements reportedly include the surrender and disarmament of Hamas, the release of the remaining hostages, deployment of an international security force, and hints at a process that could lead to a Palestinian state. 

Israeli Prime Minister Netanyahu is meeting with Trump at the White House today to discuss the proposal. The plan includes some non-starters for both Israel and Hamas. 

Pending Home Sales Index rose 4% to 74.7 in August, well above expectations of +0.3%, versus -0.3% in July. "Lower mortgage rates are enabling more homebuyers to go under contract," said NAR Chief Economist Lawrence Yun.

Dallas Fed Index fell 6.9 points to a three-month low of -8.7 in September, versus -1.8 in August. 


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$58.06 (+1.54%)
5-Day Change: +$83.86 (+2.24%)
YTD Range: $2,607.16 - $3,833.43
52-Week Range: $2,541.42 - $3,833.43
Weighted Alpha: +48.60

GOLD

Gold begins the week on the bid, establishing fresh record highs. The yellow metal is being buoyed by haven interest associated with the risks of a government shutdown and a weaker dollar.



Geopolitical and trade tensions remain elevated. The market remains worried about inflation, but is also anticipating further rate cuts that could stoke that inflation, creating a bit of a perfect storm for gold.

Bloomberg reports that Switzerland has offered to invest in the U.S. gold-refining industry, in hopes of persuading the Trump administration to lower the recently imposed 39% import tariff. The plan could include building a new refinery and/or expanding existing processing capacity as a means to reduce the Swiss trade surplus with the United States.

Global gold ETFs saw net inflows of 27.2 tonnes last week, led once again by North American investors. It was the fifth straight week of inflows.

Today's convincing breach of the targeted $3,800 level lends credence to longer-term objectives at $4,000 and $5,000. The next big round number at $3,900 marks an intervening barrier.

The first tier of support is $3,807.12/$3,800.00. Below that, the previous high at $3,790.90 protects today's intraday low at $3,760.05.

While gold is quite overbought at this point and vulnerable to setbacks, the trade is likely to continue viewing downticks as buying opportunities. If Congress passes a CR before the government shuts down, corrective potential could be to the rising 20-day moving average at $3,667.51.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.903 (+1.96%)
5-Day Change: +$2.971 (+6.74%)
YTD Range: $28.565 - $47.172
52-Week Range: $28.565 - $47.172
Weighted Alpha: +60.83

Silver extended to the upside, reaching new 14-year highs. The white metal is now up more than 17% for September, spurred by solidly bullish supply/demand dynamics, a resilient U.S. economy, above-target inflation, dovish Fed expectations, a weaker dollar, and safe-haven spillover from record-high gold.



Based on all these factors, and a very bullish technical picture, record highs in silver above $50 are looking increasingly likely. The $47.973/$48.000 zone is the next upside target.

The gold/silver ratio has fallen to an 11-month low of 80.468, suggesting ongoing silver outperformance. The 78.6% retracement level comes in at 80.065. If that level is negated, potential would be back to last year's low at 72.675.

However, like gold, the silver market is very overbought at this point, having notched just six down days so far this month. Be cautious, because silver can be quite volatile when the bulls start booking profits.

The early U.S. low at $46.486 marks first support. Today's low was set in Asia at $45.955 is the more important level to watch. 


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 poised for sixth straight higher weekly closes

Outside Market Developments: Headline PCE inflation ticked up to 2.7% y/y in August, while core inflation was unchanged at 2.9%. With the Fed's favored measure of inflation still nearly a full percentage point above the Fed's 2% target, sticky inflation remains a market concern with implications for the Fed's policy path.

Personal income and expenditures beat expectations. On Thursday, it was reported that the U.S. economy grew at a revised 3.8% annualized rate in Q2, its fastest pace in nearly two years, driven by strong consumer spending and business investment. Durable orders beat expectations by a wide margin.

These data reflect a resilient and robust economy, with above-target but stable inflation. The market has modestly pared its dovish Fed expectations as a result.  Prospects for a 25 bps cut in October stand at 87.7%, with the probability of another in December at 63.6%.

No progress has been made this week on averting a partial government shutdown that would begin on October 1. A last-ditch Senate vote on September 29 is possible, but the chances of a CR are slim with both Democrats and Republicans unwilling to make concessions. Without a CR to fund the government, markets and federal operations face immediate turbulence.

Personal Income rose 0.4% in August, above expectations of +0.3%, versus +0.4% in July.

PCE rose 0.6% in August, above expectations of +0.5%, versus +0.5% in July.

PCE Chain Price Index rose 0.3% in August, in line with expectations, versus +0.2% un July; 2.7% y/y, versus 2.6% in July. Core +0.2% m/m, in line, versus +0.2% in July; 2.9% y/y, unchanged from July.

Michigan Sentiment was revised down to 55.1 in the final reading for September, versus 55.4 previously and 58.2 in August.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$4.73 (-0.13%)
5-Day Change: +$78.42 (+2.13%)
YTD Range: $2,607.16 - $3,790.90
52-Week Range: $2,541.42 - $3,790.90
Weighted Alpha: +45.56

Gold heads into the weekend on the bid and within striking distance of the $3,790.90 record high set on Tuesday. The yellow metal is poised for a sixth consecutive higher weekly close.



Haven interest remains strong with the U.S. seemingly hurdling toward a partial government shutdown. Geopolitical tensions, sticky inflation, and expectations of further Fed easing are contributing factors.

The modest rebound in the dollar stemming from this week's strong U.S. economic data poses a bit of a headwind for gold. However, the dollar index set a more than three-year low last week, and gains are likely to be viewed as selling opportunities as long as Fed expectations are tilted dovish.

Short-term focus remains on a true test of the $3,800, with scope for an eventual push to $4,000. Further out, $5,000 is looking increasingly attractive.

Today's intraday low $3,734.87 now protects the $3,722.51/17.65 level. The low for the week set on Monday at $3,684.09 looks well protected and will likely correspond with the rising 20-day MA next week. 


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.156 (-0.35%)
5-Day Change: +$2.477 (+5.75%)
YTD Range: $28.565 - $45.583
52-Week Range: $28.565 - $45.583
Weighted Alpha: +56.74

Silver continues its march higher, spurred by robust U.S. economic data, expectations of further Fed easing, strong supply/demand fundamentals, and a bullish technical picture. The white metal notched another round of new 14-year highs and is poised for a sixth straight higher weekly close.



The convincing breach of $45 sparked follow-through buying that pushed silver above $46 for the first time since May 2011. Today's upside extension lends additional confidence to previously established objectives at $47.973 (Fibonacci) and $48.105 (May 2011 high). Further out, record highs around $50 are looking increasingly attractive.

The $45 zone is now the first meaningful support. Today's Asian low at $44.611 stands in front of congestion around $44.

PGMs

Platinum surged to 12-year highs near $1,600, spurred by a persistent supply-demand imbalance, amplified by investor shifts and industrial resilience. Unlike gold's purely safe-haven appeal, platinum benefits from its dual role in investment and manufacturing, particularly autos and green tech.

Palladium traded above $1,300 for the first time since late July, buoyed by broad-based strength in the precious metals complex. While long-term forecasts of surpluses from recycling and substitution keep XPD underperforming, near-term market tightness – exacerbated by Russia's 40% share of global supply – has sparked bullish positioning.


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 underpinned by haven interest, as silver outperforms

OUTSIDE MARKET DEVELOPMENTS: Despite the release of generally favorable U.S. economic data this morning, risk appetite is subdued. Signs of a resilient economy and a nine-week low in jobless claims have prompted the trade to trim Fed easing expectations.

Prospects for 50 bps of additional easing by year-end have fallen to 65.1% from 73.3% yesterday and 82.1% a week ago. This has the dollar on the bid, with the dollar index trading at three-week highs.

The Fed has stressed that the policy path remains data-dependent. There is a host of FedSpeak today and tomorrow, which may provide some additional clarity on the central bank's intentions.

Republicans and democrats are digging in their heels ahead of a potential partial government shutdown next week. The Office of Management and Budget said agencies that would lose funding should start preparing to cut jobs. The Trump administration has indicated that some may be permanent reduction in force firings, rather than temporary furloughs.

Fiscal worries will continue to weigh on market sentiment. Besides the potential government shutdown, the national debt stands at $37.4 trillion, about 123% of GDP. The CBO projects the U.S. could reach the $41.1 trillion debt ceiling as early as late 2026. 

Durable Orders rebounded 2.9% in August, well above market expectations of -0.4%, versus a revised -2.7% in July (was -2.8%). Transportation orders surged 7.9%, versus -9.4% in July.

Initial Jobless Claims plunged 14k to a nine-week low of 218k in the week ended 20-Sep, inside expectations of 234k, versus a revised 232k in the previous week (was 231k). Continuing claims edged down to 1,926k from 1,928k in the previous week.

Q2 GDP was revised up to +3.8% in the third report, above expectations of +3.3%, versus +3.3% previously and -0.6% in Q1.

Trade Balance narrowed to -$85.5 bln in August, inside expectations of -$92.5 bln, versus a revised -$102.8 bln in July (was -$103.6 bln).

Existing Home Sales edged down to a 4.00M pace in August, above expectations of 3.96M, versus 4.01M in July.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$20.86 (+0.56%)
5-Day Change: +$92.07 (+2.53%)
YTD Range: $2,607.16 - $3,790.90
52-Week Range: $2,541.42 - $3,790.90
Weighted Alpha: +44.10

GOLD

Gold is consolidating Wednesday's corrective losses, with price activity confined to yesterday's range. Dovish Fed expectations ebbed somewhat today after some generally favorable U.S. economic data came out, lifting the dollar index to three-week highs.



Despite today's dollar strength, the yellow metal is displaying some resilience amid persistent haven interest associated with geopolitical, trade, and fiscal worries. Gold remains very much within reach of Tuesday's record high at $3,790.90.

Gold ETFs saw a solid 35.5 tonnes of inflows last week. It was the fourth consecutive week of net inflows. Investor interest remains strong, particularly among those in North America.

Short-term focus remains on a true test of the $3,800, with scope for an eventual push to $4,000. Further out, $5,000 is looking increasingly attractive.

Today's intraday low at $3,722.51 bolsters Wednesday's low at $3,717.65. If the latter is penetrated, Monday's low at $3,684.09 would be in play, with potential to the rising 20-day moving average, which is at $3,633.78 today.

Buying into dips is likely to remain favored. That could get derailed temporarily if PCE inflation comes in hotter than expected tomorrow, as it would further erode dovish Fed expectations.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.089 (+2.48%)
5-Day Change: +$2.983 (+7.13%)
YTD Range: $28.565 - $45.073
52-Week Range: $28.565 - $45.073
Weighted Alpha: +53.13

Silver remains well bid, having set new 14-year highs just ahead of today's U.S. open. Strong durable orders in August, along with a robust revision to Q2 GDP provide solid underpinnings to industrial demand expectations.



Haven interest remains strong as well, with new record highs in gold, making silver an increasingly appealing alternative. The strong technical picture is bolstered by weakness in the gold/silver ratio, which fell to a nine-month low of 83.276 today. This suggests silver is likely to continue outperforming.

A more convincing breach of $45 would lend additional confidence to the bullish scenario that calls for a challenge of record highs around $50. An intervening barrier is marked by the $47.973 Fibonacci objective, which corresponds closely with the $48.105 high from May 2011.

Today's early U.S. low at $44.211 protects the low for the day at $43.784. More substantial support marked by the lows from Wednesday and Tuesday at $43.679/651, which stands in front of the low for the week at $43.035.

Look for setbacks to continue attracting buying interest.


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.