Blog posts tagged with 'palladium'

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

U.S. calendar features Q4 GDP Advance Report (+2.7% expected), Initial Jobless Claims, Pending Home Sales Index.

Gold consolidates ahead of Fed, silver sets new highs for the week

OUTSIDE MARKET DEVELOPMENTS: The market's focus is on the Fed today. The policy decision itself is deemed to be a foregone conclusion – steady policy is expected – but the statement and Powell's presser could prove interesting.

While the trade seems to have revived hope for less hawkish guidance, apparently there's insufficient confidence to to price those hopes in. Fed funds futures continue to suggest the next 25 bps Fed cut won't happen until midyear.

I suspect that following President Trump's vow to push for lower interest rates, the Federal Open Market Committee (FOMC) and/or Chairman Powell will assert the Fed's independence. In my opinion, it's better to avoid directly challenging the President and focus instead on how monetary policy decisions must be data-driven.

The Bank of Canada cut rates by 25 bps as was widely expected. Forward guidance was more dovish amid heightened tariff uncertainty.

“The economy is expected to strengthen gradually and inflation to stay close to target. However, if broad-based and significant tariffs were imposed, the resilience of Canada’s economy would be tested,” according to the policy statement.

"A long-lasting and broad-based trade conflict would badly hurt economic activity in Canada," worried Governor Tiff Macklem.

Sweden's Riksbank delivered a 25 bps rate cut, in line with expectations. "Inflation is expected to be close to target in the coming years," according to the policy statement. This suggests the Riksbank is now on hold. 

The ECB is expected to cut rates by 25 bps tomorrow as growth concerns persist. However, the uptick in inflation into year-end 2024 means the central bank will have to be measured on its forward guidance. Undoubtedly, the threat of U.S. tariffs will be noted.

The U.S. tech sector has stabilized after Monday's rout amid evidence that DeepSeek may achieve its results through distilling. This process allows "developers to obtain better performance on smaller models by using outputs from larger, more capable ones, allowing them to achieve similar results on specific tasks at a much lower cost," according to the FT.

That suggests to me that the large processing and energy-intense models are still needed. I suspect OpenAI and the other big players in the AI sector will find means to prevent distilling, beyond legal recourse. DeepSeek has also raised national security concerns and the Navy has already banned its use.

Trade data released this morning showed the U.S. goods trade deficit surged 18% to a record-wide -$122.1 bln in December as businesses continued to front-load in anticipation of Trump's tariffs. Exports also contracted, adding further to the record deficit.

The trade data resulted in significant negative revisions to GDP estimates. The Atlanta Fed's GDPNow model for Q4'24 plunged nearly a full percentage point to 2.3%, versus 3.2% yesterday. That puts the Atlanta Fed model more in line with the blue chip consensus.

MBA Mortgage Applications fell 2% in the week ended 24-Jan, versus a 0.1% rise in the previous week. Purchases declined 0.4%, while refinancing fell 6.8% as 30-year mortgage rates remained elevated above 7%.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$4.20 (-0.15%)
5-Day Change: +$1.55 (+0.06%)
YTD Range: $2,607.16 - $2,784.96
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +32.54

Gold remains confined to Monday's range as the market awaits today's Fed decision and policy guidance. Ongoing uncertainty as President Trump's policy agenda unfolds is stoking safe-haven interest and should continue to limit the downside.



If the FOMC's guidance is suggestive of a less hawkish bias moving forward, gold could push to new record highs. Today's downward revisions to GDP may give them the cover they need, but I think they will be keen to avoid the appearance of kowtowing to the President's desire for lower rates.

Less hawkish guidance would likely perpetuate the dollar's slightly easier tone, providing an additional tailwind for gold. However, in the wake of today's BoC and Riksbank cuts and tomorrow's anticipated ECB cut, interest rate differentials remain broadly dollar-supportive.

A breach of Monday's high at $2,771.52 would clear the way for another run at the $2,784.96/$2,789.68 highs. Penetration of the latter would bolster the bullish scenario that targets the $2,857.21 Fibonacci level initially, with potential to a measuring objective at $2,936 and the $3,000 psychological barrier.

Today's intraday low at $2,750.09 protects the lows from earlier in the week at $2,735.55/32.23. A retreat below the $2,700 zone would favor further consolidation and raise concerns about the potential double top at $2,784.96/$2,789.68.

Silver jumped to new highs for the week, even though gold remains well contained.  However, price action remains generally confined between the 100-day and 200-day moving averages awaiting the Fed.



A close above the 100-day or below the 200-day is likely to set the near-term tone. Uncertainty about global growth risks and tariff worries are seen as a headwind. However, the softer dollar and persistent haven interest in gold provide some underpinning.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
pgrant@zanermetals.com
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 recover from Monday's DeepSeek-inspired deleveraging

OUTSIDE MARKET DEVELOPMENTS: Markets have stabilized somewhat after yesterday's DeepSeek-related turmoil. The Chinese startup challenges the dominance of U.S. AI companies by providing similar results at a substantially lower cost.

DeepSeek calls into question the current paradigm of building huge data centers, producing ever more high-end chips, and generating massive amounts of power. This disruption comes just days after the Trump administration announced a multi-billion dollar joint venture to build out U.S. AI infrastructure.

The President said DeepSeek's advancement “should be a wake-up call” for the U.S. tech industry. He remains committed to U.S. dominance in the AI space and views the ability to do it at a lower cost as broadly positive.

The FOMC begins its two-day meeting today. The committee is widely expected to announce steady policy tomorrow. President Trump's pledge to demand lower interest rates notwithstanding, Fed funds futures suggest the next rate cut won't happen until midyear.

While the market continues to lean toward two Fed rate cuts this year, a CNBC survey suggests conviction toward that view is waning. “I just don’t see (the Fed) having any confidence right now on how to proceed with rate cuts from here, especially as we await Trump’s tariff and tax policy,” said Peter Boockvar, chief investment officer at Bleakley Financial Group.

On the other hand, the Bank of Canada and the ECB are expected to deliver 25 bps rate cuts on Wednesday and Thursday respectively. The Bank of England will likely cut rates by 25 bps on 6-Feb. Weak growth is seen as the greater risk, versus stubborn inflation.

With these key central banks in easing mode and the Fed on hold, interest rate differentials seem destined to remain dollar-supportive. The dollar index extended to a six-week low on Monday but appears to be on sounder footing today.

Durable Goods Orders tumbled 2.2% in December, well below expectations of +1.0%, versus a negative revised -2.0% in November (was -1.1%). The drop is attributable to a large drop in transportation orders. Ex-trans rose 0.3% on expectations of +0.4%, versus a negative revised -0.2% in November.

Case-Shiller Home Price Index eased 0.1% to 332.6 in November, versus 333.0 in October. It was the fourth consecutive monthly drop, although each has been modest.

FHFA Home Price Index rose 0.3% to 433.4 in January, versus 432.3 in December. It was the eleventh straight monthly rise, although the annualized pace decelerated to 4.2% from 4.5% in December.

Consumer Confidence fell to a four-month low of 104.1 in January, below expectations of 106.0, versus a positive revised 109.5 in December (was 104.7). The 1-year ahead inflation index rose to a seven-month high of 5.3%. Some of the post-election surge in confidence is being retraced.

Richmond Fed Manufacturing Index rose to -4 in January, above expectations of -8, versus -10 in December. While the index showed improvement for a second straight month, it has been in negative territory for 15 consecutive months.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$2.07 (+0.08%)
5-Day Change: +$1.37 (+0.05%)
YTD Range: $2,607.16 - $2,782.51
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +31.75

Gold has retraced more than half of yesterday's sell-off as tech stocks stabilized, relieving deleveraging pressure. The retreat from Friday's 12-week high to yesterday's low was less than 2%.



Monday's losses did somewhat relieve the developing overbought condition, which should ultimately help gold move into record territory. While there is some risk of a large double-top forming, I'm not terribly concerned about the bullish scenario as long the market remains above $2,700.

In yesterday's comment, I noted the plunge in China's net gold imports through Hong Kong in December. Gold market expert Jan Nieuwenhuijs writing for Money Metals believes Beijing continues to stockpile at a "frenetic rate," albeit covertly via direct gold exports from the U.K. to China.

Nieuwenhuijs says the PBoC bought 600 tonnes of gold in 2024. Ongoing central bank demand has bullish price implications. "Gold could more than double in price this decade," he said.

Gold rose 25.5% in 2024, its best performance in 14 years and the ninth-best annual performance since 1971. According to the World Gold Council, "market consensus expectations suggest a more modest performance for gold in 2025, but with the potential for upside catalysts as the year unfolds."

A breach of yesterday's high at $2,771.52 would clear the way for another run at the $2,784.96/$2,789.68 highs. New record highs would bode well for attainment of the $2,857.21 Fibonacci objective. Above that, a measuring objective at $2,936 and the $3,000 psychological barrier attract.

This week's lows at $2,735.55/32.23 protect the more important $2,700 zone. The rising 20-day moving average bolsters the latter.

Silver is consolidating within yesterday's range and between the 50- and 200-day moving averages. The white metal continues to be weighed by global growth risks and trade uncertainties.



If gold can move into uncharted territory, silver should get pulled above $31. Such a move would put silver above the 100-day moving average for the first time since mid-December and set a more neutral tone with potential back to the $32 zone.

Penetration of the December highs at $32.255/306 would constitute a more than 50% retracement of the three-month downtrend and return a measure of credence to the longer-term uptrend. 

While the 20-day and 200-day moving averages are holding on a close basis, the downside remains vulnerable. A breach of chart support at $29.553 (13-Jan low) would put the $28.802/783 double-bottom back in play.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
pgrant@zanermetals.com
www.zanermetals.com

Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.

1/27/2025

Gold and silver retreat as risk-off sentiment drives deleveraging pressures

OUTSIDE MARKET DEVELOPMENTS: Chinese AI startup DeepSeek's app supplanted ChatGPT as the most downloaded free app. The news rattled markets amid speculation that DeepSeek's reasoning capabilities and lower learning costs are a leap forward in the AI arms race. 

The uncertainty sapped risk appetite, calling into question the demand dynamics for high-end chips from the likes of Nvidia and AMD.  The news comes just days after President Trump announced a joint venture that would funnel billions of dollars into the buildout of U.S. AI infrastructure.

Nonetheless, President Trump begins his second full week in office with wind in his sails as a result of his pro-growth agenda. His approval rating after his first week in office is higher than at any point during his first term. Some pollsters say this has never happened before.

It is also becoming increasingly apparent that tough talk on tariffs may have indeed been a negotiating ploy. The administration doesn't appear to be overly eager to impose harsh tariffs on trading partners...at least thus far.

The Fed is widely expected to hold steady on rates this week, despite Trump's demand for lower interest rates. Fed funds futures continue to suggest the central bank is on hold until midyear.

Chicago Fed National Activity Index rebounded to 0.15 in December, above expectations of 0.1, versus a positive revised -0.01 in November (was -0.12). Production and employment-related indicators contributed positively to the net increase.

New Home Sales rose 3.6% to 698k in December, above expectations of 670k, versus 664k in November. That's the best print since September, despite the ongoing headwind of high mortgage rates.

Dallas Fed Index surged to a more than three-year high of 14.1 in January, versus a positive revised 4.5 in December. The Dallas Fed noted that "Upward pressure on prices and wages increased this month."


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$0.70 (-0.03%)
5-Day Change: +$43.77 (+1.62%)
YTD Range: $2,607.16 - $2,784.96
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +32.11

Gold has come under deleveraging pressure as stock markets are roiled by DeepSeek uncertainty. The yellow metal has approached the midpoint of last week's range, but weakness in yields and the dollar should help limit the downside.



The initial failure to crack the $2,789.68/$2,541.42 range is partially attributable to the overbought condition that was developing after four consecutive weekly gains. The 14-day RSI reached its highest point since late October.

If DeepSeek is ultimately determined to be a black swan for the AI sector, some of the risk-off flows are likely to find their way into gold. If today's stock market volatility ends up being all hype, the previously prevailing fundamentals should lead to an upside breakout of the $2,789.68/$2,541.42 range.

The technicals remain broadly supportive. Uncertainty about U.S. trade policy intentions continues to provide haven interest. Additionally, there seems to be some level of market hope for a slightly less hawkish tilt from the Fed this week. I'm not so sure...

The lower gold price and a weaker dollar should make the yellow metal more appealing ahead of Wednesday's Lunar New Year. The gift of gold is considered an auspicious New Year's gift across Asia.

However, China's net gold imports through Hong Kong plunged 84% m/m to 5.26 tonnes in December, versus 33.1 tonnes in November. The near-record price of gold and persistent growth risks continue to weigh on Chinese consumer demand.

North American investors aggressively sold ETF positions last week to the tune of 20.9 tonnes. It was the biggest North American outflow since October 2022. However, European investors continued to buy resulting in a more modest net outflow of 7.7 tonnes.

The COT report for last week showed net speculative long positions expanded by 21.4k to 300.8k contracts in the week ended 24-Jan. It was the third straight weekly increase and the highest net spec reading since 27-Sep'24.

A rebound above $2,750.00/$2,751.04 would ease short-term pressure on the downside, favoring renewed attacks on the upside. Last week's high at $2,784.96 reinforced the high end of the range.

The breach of minor chart support at $2.738.11 (Thursday's low), suggests gold is vulnerable to the $2,700 zone before renewed buying interest surfaces. More substantial chart support is noted at $2,691.47/$2,690.08.

Silver has tumbled back into the range after failing to convincingly clear the $31 threshold last week. Uncertainty about tariffs, ongoing worries about China's growth prospects, and today's risk-off sentiment keep the white metal well contained.



I have maintained that new record highs in gold were needed to pull silver above $31 and unlock the more important $32 zone. With the 100-day MA intact on the upside and silver testing back below the 200-day, the downside remains vulnerable. 

The next tier of support I'm watching is defined by the mid-January lows at $29.573/553. Penetration of this level would clear the way for another run at the $28.802/783 double bottom.

The COT report for the 24-Jan week revealed that net speculative long positioning rose 1.4k to a ten-week high of 47.5k contracts from 46.1k in the previous week. It was the third consecutive weekly increase.

CFTC Silver speculative net positions

Today's intraday high at $30.651 now protects the more important $30.977/$31.004 level, where the 100-day MA corresponds with last week's high.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
pgrant@zanermetals.com
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 nears record territory as Trump's "demand" for lower interest rates hits dollar

OUTSIDE MARKET DEVELOPMENTS: President Trump addressed the WEF via video on Thursday and took questions from the audience. A lot of ground was covered in less than an hour, but Trump's general message was that America is back and will come first during his time in office.

“My message to every business in the world is very simple: Come make your product in America, and we will give you among the lowest taxes of any nation on Earth. But if you don’t, you will have to pay a tariff,” he declared.

He took the EU to task for its trade surplus with the U.S., its oppressive regulatory environment, and insufficient defense spending. Trump suggested that 5% of GDP is a more appropriate level of defense spending for NATO members than the current 2% threshold.

The President touted his good relationship with China's Xi Jinping. "[W]e always had a great relationship, I would say, and we look forward to doing very well with China and getting along with China," he said.

While unhappy with the current balance of trade with China, Trump made an overture to Beijing to strike a deal. "All we want is fairness. We just want a level playing field. We don’t want to take advantage," he said.

Trump had a contentious relationship with the Fed during his first term and it appears that will be the case this time around as well. “I’ll demand that interest rates drop immediately,” pledged Trump.

The Fed however is not obligated to acquiesce to that demand. President Trump picked Jerome Powell to succeed Janet Yellen as Chairman of the Fed during his first term. The two spent the latter half of that first term at odds over monetary policy.

Powell had previously vowed to serve out his term, which ends in May 2026. It's unclear if the President has the legal authority to fire the Fed Chairman.

Nonetheless, U.S. yields and the dollar fell in reaction to Trump's comments. In the same way the Fed jawbones markets to achieve its aims, the President also has that power and is not afraid to use it.

While the dollar index fell to a five-week low, Fed funds futures moved minimally. The market is still pricing in steady Fed policy until mid-year.

The BoJ raised the policy rate by 25 bps to 0.5%, as was widely expected. That's still a relatively low rate, but it is the highest Japan has seen since 2008. Governor Ueda signaled that further hikes are in the offing.

The Monetary Authority of Singapore eased for the first time in nearly five years, amid moderating inflation and heightened trade concerns. 

S&P Global Flash Manufacturing PMI rose to 50.1 in January, above expectations of 49.7, versus 49.4 in December. It's the first foray into expansion territory since last June.

S&P Global Flash Services PMI tumbled to a nine-month low of 52.8 in January, below expectations of 56.5, versus 56.8 in December. Despite the setback, the services sector has been in expansion for nearly two years.

Existing Home Sales rose to 4.240M in December, above expectations of 4.165M, versus 4.150 in November. While home sales accelerated in Q4'24, the market continues to be weighed by tight supply and high mortgage rates.

Michigan Sentiment (final) was revised down to 71.1 in January, below expectations of 73.5, versus a preliminary read of 73.2 and an eight-month high of 74.0 in December.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$22.02 (+0.80%)
5-Day Change: +$78.30 (+2.90%)
YTD Range: $2,607.16 - $2,782.51
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +35.54

Gold has approached the $2,789.68 record high after President Trump's "demand" for lower interest rates pushed yields and the dollar lower. The President's bellicose tone has also stoked safe-haven interest in the yellow metal.

 

Gold has traded higher in four of five sessions this week and appears poised for a weekly gain of more than 2.5%. It will be the fourth consecutive weekly gain.

While gold has yet to punch through to new all-time highs, the wind appears to be at the market's back. An eventual breach of $2,789.68 would shift focus to the $2,857.21 Fibonacci target initially. Beyond that, the $2,936 measuring objective, and the $3,000 psychological barrier attract.

The World Gold Council released its latest Gold as a Strategic Asset report. The report highlights gold's positive impact as a component of a well-diversified portfolio. 

"Gold’s traditional role as a safe-haven asset means it comes into its own during times of high risk. But its dual appeal as an investment and a consumer good means it can generate positive returns in good times too. This dynamic is likely to continue, reflecting ongoing political and economic uncertainty, and economic concerns surrounding equity and bond markets."

Improved investor interest was reflected in last week's surge in ETF inflows. I suspect we'll see positive ETF inflows this week as well.

The weaker dollar may also spark increased demand in Asia ahead of the Lunar New Year, which falls on 29-Jan. Gold is considered an auspicious gift in much of Asia, conveying a wish for luck and wealth in the new year.

On the downside, former resistance at $2,719.75/$2,714.94 marks first support. Below that, today's intraday low at $2,690.08 protects the more important $2,666.04/$2,657.28 zone where the 20-day moving average corresponds closely with Thursday's low.

Silver rebounded from yesterday's sell-off spurred by fresh gains in gold, a weaker dollar, and President Trump's softer tone on trade with China. While the white metal ticked briefly above $31, those gains could not be sustained.



While silver is poised for a weekly gain of more than 1%, convincing penetrations of the 100-day moving average at $30.965 and $31.00 are needed to set a more favorable tone. An additional tier of resistance is marked by the 20-week moving average at 31.108.

I continue to think that fresh record highs in gold will drag silver decisively above $31. However, $32 must be regained to truly reinvigorate the bull camp.

The Chinese National Energy Administration reported a record surge of 45.2% in total installed solar capacity in 2024 to 887 GW. China Daily reported that global consultancy Rystad Energy "expects China's solar sector to continue breaking records in the coming years."

That's good news for silver bulls, even as President Trump walks back renewable energy mandates in the U.S.

Initial support is found at $30.442/$30.398 where today's low corresponds with the 50-day moving average. A breach of this level would leave the market vulnerable back to key chart/MA support around $30.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
pgrant@zanermetals.com
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 consolidates recent gains while silver pressures the weekly low

OUTSIDE MARKET DEVELOPMENTS: President Trump is scheduled to appear virtually at the World Economic Forum today at 11:00 am EST. The annual meeting held in Davos Switzerland began on inauguration day and undoubtedly President Trump has been a hot topic of discussion.

The speech should be entertaining, and reportedly a question and answer session will follow. When asked about Trump, Botswana's President Duma Boko summed him up nicely: "He engages in what we would regard as robust diplomacy." I think it was meant as a compliment.

Boko went on to suggest that Trump's rhetoric should not be taken literally, but should be taken seriously. "He will take pragmatic decisions," he said.

The EU is already signaling a willingness to address its trade imbalance with the U.S. to ward off tariffs that would adversely impact the Continent's already flagging economy. European Commission EVP Valdis Dombrovskis said he is open to discussing increased energy and weapons purchases.

The ECB, BoE, and BoC all appear poised for further rate cuts at their next meetings amid heightened growth risks. Meanwhile, the Fed is widely expected to hold steady when the FOMC meets next week.

Norges Bank held steady today but signaled a cut is probably on tap for March. The BoJ is expected to hike its policy rate by 25 bps tomorrow to 0.5%. 

Fed funds futures continue to suggest the next Fed rate cut won't happen until June or July. However, there are increased rumblings that the Fed's next move could be a hike if Trump's trade policies re-stoke inflation. "I think rate hikes are possible," said BNY CEO Robin Vince at the WEF.

The dollar has retreated from its highest levels in over two years this week, but interest rate differentials will continue to underpin the greenback. The underlying trend remains bullish.

Initial Jobless Claims rose 6k to 223k in the week ended 18-Jan, above expectations of 215k, versus 217k in the previous week. Continuing jobless claims surged 46k to a three-year high of 1,899k in the 11-Jan week from 1,853k in the previous week.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$4.05 (-0.15%)
5-Day Change: +$25.73 (+0.95%)
YTD Range: $2,607.16 - $2,763.00
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +32.79

Gold has eased from Wednesday's 12-week high, but even this modest setback has attracted some buying interest. While the well-defined $2,789.68/$2,541.42 range is intact, further attacks on the upside are favored amid persistent uncertainty associated with President Trump's agenda.



An eventual move to new all-time highs would clear the way for an upside extension to a Fibonacci target at $2,857.21. Beyond that, the $2936 measuring objective and the long-standing $3,000 target attract.

From a technical perspective, the 20-day moving average has bounced smartly off the 100-day. It appears that the 50-day is going to hold above the 100-day as well.

ETF inflows were solid last week, and I think further inflows this week will be confirmed as well. This is also true of net speculative long positions in the futures market.

Ross Norman of Metals Daily says the massive flow of physical gold from London to New York and the attendant surge in lease rates triggered short-covering, which contributed to gold's recent rally. "The possibility that gold and silver imports might incur a significant additional cost, New York dealers are asking for physical delivery," said Norman in a post.

Norman believes that if gold tariffs don't materialize, "then likely that metal will come home to London over the next few months." But what if the Trump administration doesn't provide clarity on tariffs, or tariffs are imposed? I think that would prompt London bullion banks to go to the market to rebuild loco London stocks.

The developing overbought condition noted earlier in the week is still seen as a potentially limiting factor. While the dollar has been under modest pressure this week, the underlying trend remains bullish and a headwind for gold.

Today's earlier low of $2,738.11 now defines initial support. More important supports are at $2,705.15/$2,700.00 and $2.690.08 (Monday's low).

Silver tumbled in early U.S. trading to pressure the low for the week at $30.141 as global growth risks and tariff uncertainty continue to weigh on industrial metals. The failure to climb back above $31 this week leaves the downside vulnerable.


 
The white metal is back below the 50-day moving average and a convincing breach of $31.141 would clear the way for tests of the 20-day and 200-day MAs which are both at $30.047 today. A move below $30 would bring the  $28.802/783 double bottom back in focus.

The highs from the last two weeks at $30.945 and $30.956 reinforces the significance of the 31-handle. A trade above $31 is needed to set a more neutral near-term tone and $32 must be cleared to revive interest in the long-term uptrend.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
pgrant@zanermetals.com
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.