Blog posts tagged with 'precious metals'

Gold and silver poised for weekly gains, despite intraday pullbacks

Outside Market Developments: Markets continue to digest this week's central bank actions. The Fed's third consecutive 25 bps rate cut initially stoked risk appetite, but risk-off sentiment prevails ahead of the weekend after FedSpeak this morning tilted hawkish.

Implied Fed funds for the end of next year are at 3.105%, suggesting two cuts are in the cards for 2026. However, it's likely the Fed will be on pause early in the new year.

SNB did exactly what everyone expected and left the policy rate unchanged at 0.00%, seeing low inflation and moderate growth ahead. With rates already at zero, cutting again is basically off the table, and the next move is more likely a hike.

Focus next week will be on monetary policy as well, with three major central banks set to announce rates on Thursday:

The BoE is widely expected to cut rates by 25 bps amid cooling inflation and sluggish growth, while signaling a potential slowdown in the pace of easing into 2026. The outlook for the ECB's decision is mixed, with some analysts anticipating a hold due to sticky core inflation and resilient economic data, though others see a slim chance for a final 25 bps trim before pausing well into next year. I'm leaning slightly toward an ECB hold.

The BoJ is widely expected to hike rates to 0.75% and likely signal further tightening ahead to reach a neutral rate of 1-1.25%. Such guidance risks the unwinding of yen carry trades and sparking capital outflows from riskier assets like emerging markets and crypto. This could trigger short-term volatility in equities and bonds, and draw flows back to safer JGBs.

Cheap yen liquidity has helped prop up AI valuations over the past several years, enabling aggressive capex in chips, data centers, and infrastructure. Hawkish BoJ guidance could trigger revived concerns about AI sector overvaluation, with knock-on implications for the broader equities market and commodities.

A long-simmering Cambodia-Thailand border dispute erupted this week into full-scale clashes involving drones, artillery, and airstrikes. Broader instability in ASEAN is feared, particularly if China and/or Russia meddle. The U.S. has ramped up diplomatic pressure once again, which may well include revived tariffs.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$56.61 (+1.32%)
5-Day Change: +$116.55 (+2.78%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,585.51 - $4,381.21
Weighted Alpha: +64.90

Gold surged to fresh seven-week highs in early U.S. trading, but then retreated into the range on hawkish FedSpeak and perhaps some profit-taking ahead of the weekend. Nonetheless, the yellow metal is still up 2% on the week, underpinned by expectations of further Fed easing next year, and continued weakness in the dollar.



The dollar index set an eight-week low on Thursday. While a consolidative tone emerged on Friday, the dollar is on track for its third consecutive lower weekly close.

While Friday's gains above $4,300 could not be sustained, the breach of the $4,275.46 Fibonacci level bodes well for a short-term challenge of the all-time high at $4,381.21. Penetration of the latter would return additional confidence to previously established objectives at $4,515.63 and $5,000.

Today's intraday low at $4258.43 reinforces support that was marked by a series of daily highs from last week. More significant supports are noted at $4,204.62 (11-Dec low), and the low for the week at $4,170.56.

As noted above, we could see some volatility next week with the announcement of monetary policy by the BoJ, ECB, and BoE on Thursday.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.941 (+1.48%)
5-Day Change: +$4.501 (+7.71%)
YTD Range: $28.565 - $64.650
52-Week Range: $28.565 - $64.650
Weighted Alpha: +129.99

Silver set new record highs on four of five trading days this week. After setting a new all-time high at $64.650 in early U.S. trading, profit-taking emerged. While the white metal seems poised to close lower on the day, it will notch its third straight higher weekly close. Beware of the potential key reversal (confirmed on a close below $61.460).



It is likely that a significant portion of the leveraged long positions in silver are financed using the yen carry trade. Anticipated BoJ action next week could help trigger a much-needed correction in a market that was up nearly 123% YTD at today's high. Almost 14% of that came just since the beginning of the month.

Additional profit taking early in the week ahead seems likely, with potential initially back to the $60 zone. The $60/$59 area seems like a good place to consolidate and wait for rate decisions from the BoJ, ECB, and BoE.

A short-term breach of the lows from early December at $56.509 and $56.232 would open up the downside to a more substantial correction. If you thought the rally in silver was a wild ride, the correction of those sharp gains is likely to be wilder yet.

Minor intraday resistance at $62.309 now stands in front of the record high at $64.650. Penetration of the latter would bode well for a test of $65. Above that, the next Fibonacci projection is at $68.868, which would bring $70 within striking distance.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

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

Gold remains range-bound ahead of Fed, underpinned by soaring silver and soft dollar

OUTSIDE MARKET DEVELOPMENTS: The FOMC reconvened this morning and will announce policy at 2:00 PM ET. Market expectations favor a 25 bps rate cut, with Fed funds futures putting the probability at just under 90%. The forward guidance will be closely scrutinized for indications of whether the Fed's easing campaign will continue in 2026.

The Fed will also release post-government-shutdown SEP revisions. GDP forecasts are expected to be lifted, while inflation and unemployment estimates are likely to be trimmed. That may favor a Q1'26 pause, but we'll have to see how the trade interprets the data.

The Bank of Canada held the policy rate steady at 2.25%, citing that the current level is appropriate given the economic outlook. Recent data revisions indicate Canada's economy was stronger than previously estimated. Governor Macklem acknowledged that tariffs have done damage, but the economy is "proving resilient overall." The Governing Council emphasized a cautious approach to future policy amid elevated uncertainty from tariffs and structural economic shifts.

The SNB is also expected to hold steady when it announces policy on Thursday. Meanwhile, the BoJ is widely expected to tighten next week.

The national average for regular gasoline fell below $3 this week, the lowest price in nearly five years. Record-high U.S. domestic crude output and ramped-up production from OPEC+ are keeping oil under pressure.

My 20-year-old son paid $1.69 a gallon in Denver this week. As a young working man also attending school, he was thrilled to be able to fill his tank for $26.

Lower gas prices act as a direct boost to household disposable income, freeing up an estimated $450 million per day for discretionary uses such as holiday gifts, travel, and dining. Economists estimate that consumers redirect 20-50% of gas savings into non-energy spending within weeks, which contributed to record Black Friday and Cyber Monday sales.

Overall, Cyber Week (Thanksgiving through Cyber Monday) generated $44.2 billion in online sales, a 7.7% rise, with platforms like Shopify reporting $14.6 billion in global merchant sales across the weekend, up 27% from last year. The results underscore resilient consumer spending despite economic headwinds.

MBA Mortgage Applications rose 4.8% in the 5-Dec week, versus -1.4% in the previous week. The 30-year mortgage rate ticked up to 6.33% from 6.32%.

Q3 ECI +0.8% in line with expectations, versus +0.9% in Q2. Wage growth slowed to a +0.8% pace, from +1.0%.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$11.04 (-0.26%)
5-Day Change: +$0.61 (+0.01%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,585.51 - $4,381.21
Weighted Alpha: +59.12

Gold is straddling $4,200 as the trade awaits today's Fed decision and forward guidance. Worries about a hawkish cut have kept the yellow metal range-bound, although a soft dollar and strong silver are limiting the downside.



If the indication this afternoon is that the Fed is on pause moving forward, gold could retreat deeper into the well-defined range. The lower limit of the triangle pattern comes in at $4,125, right between the 20- and 50-day moving averages. If the market prices out further easing in H1, scope would be for a drop to the $4,000 zone.

If the SEP revisions are not as favorable as the market seems to be anticipating, a boost to rate cut expectations for Q1'26 would provide some lift for gold. A breach of the $4,259.21/$4,264.30 would bode well for a retest of the all-time high at $4,381.21. New record highs would put gold back on track for attainment of upside objectives at $4,515.63 and $5,000.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.354 (+0.58%)
5-Day Change: +$2.366 (+4.04%)
YTD Range: $28.565 - $61.600
52-Week Range: $28.565 - $61.600
Weighted Alpha: +120.06

Silver added to Tuesday's impressive 4% gain, establishing a new record high at $61.600. The white metal continues to be spurred by strong industrial demand, and expectations that AI will continue to stoke that demand amid a persistent supply deficit. Resilient global economic growth and a weak dollar are contributing to the bid.

 

Constrained mine output is failing to keep up with consumption and is being exacerbated by China's new strict export controls for 2026, sparking a pre-restriction buying frenzy. Unlike some restrictions, which were suspended until November 2026 as part of U.S.-China trade concessions, the silver-specific rules were not affected by the suspension and remain on track.

AI and tech sector earnings have been solid this week, tempering concerns about overvaluation. Strong earnings bode well for continued investment in AI infrastructure, such as data centers and associated hardware, which is a major driver of industrial silver demand due to the metal's superior electrical conductivity and thermal properties.

My next significant upside objective is $63.367 (200% retracement of the corrective decline from 54.465 to $45.563). Big-round-number resistances are noted at $62 and $63.

Today's early U.S. low at $60.125 marks initial support. Former highs at $59.331 and $58.974 provide minor intervening barriers ahead of last week's lows at $56.509/$56.232.


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 little changed on the week, as silver hit yet another record high

OUTSIDE MARKET DEVELOPMENTS: Markets continue to anticipate a rate cut next week after the delayed release of the Fed's favored inflation measure was essentially a non-event. Headline PCE inflation ticked up to 2.8% y/y in September, while core PCE inflation ticked down to 2.8%.

Fed funds futures didn't move meaningfully, with personal income and PCE generally in line with assumptions. The data are also four months old, so only a large surprise in either direction was likely to move the needle. The probability of a 25 bps rate cut continues to hover just below 90%.

The preliminary read on consumer sentiment for December showed improvement over November, and one-year inflation expectations moderated to 4.1% from 4.5%. However, "the overall tenor of views is broadly somber, as consumers continue to cite the burden of high prices," according to the University of Michigan.

Risk appetite remains broadly tilted toward 'risk-on' heading into year-end, with the major stock indexes at or near record levels. A rate cut next week certainly would provide a tailwind, but the trade will be paying close attention to the tenor of the FOMC statement and the dots to gauge the likelihood of further easing in 2026. At this point, a pause in January appears likely.

Personal Income rose 0.4% in September, in line with expectations, versus +0.4% in July.

PCE rose 0.3% in September, on expectations of +0.4%, versus a revised +0.5% in July (was +0.6%).

PCE Price Index rose 0.3% in September, in line with expectations, versus +0.3% in July; +2.9% y/y, up from 2.8% in July. Core +0.2% m/m, in line, versus +0.2% in July; 2.8% y/y, down from 2.9% in July. 

Michigan Consumer Sentiment (prelim) rose 2.3 points to a four-month high of 53.3 for December, above expectations of 52.0, versus 51.0 in November. The current conditions reading, however, hit a record low of 50.7. One-year inflation expectations moderated to 4.1% from 4.5%, while the 5-10 year inflation measure fell to a 12-month low of 3.2% from 3.4%.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$20.09 (+0.48%)
5-Day Change: -$5.05 (-0.12%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,585.51 - $4,381.21
Weighted Alpha: +61.28

Gold heads into the weekend slightly lower on the week, with price action since Wednesday confined to the range that was established on Monday and Tuesday. The yellow metal continues to be underpinned by rate cut expectations, a weaker dollar, and high-flying silver.



Monday's push to six-week highs keeps the technical bias tilted toward the upside within the broader range. A test of the  $4,275.46 Fibonacci level is considered likely, with potential above that, back to gold's all-time high at $4,381.21. New record highs would shift focus to the $4,515.53 Fibonacci projection, while bolstering confidence in the longer-term objective at $5,000.

The early U.S. session low at $4,200.08 protects the low for the day set in Asia at $4,195.31. Below the latter, more substantial supports are noted at $4,175.89 (4-Dec low) and $4,164.99 (3-Dec low). The rising 20-day MA should correspond with the latter early next week.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.673 (+2.96%)
5-Day Change: +$1.767 (+3.12%)
YTD Range: $28.565 - $59.331
52-Week Range: $28.565 - $59.331
Weighted Alpha: +108.26

Silver extended to yet another all-time high in early U.S. trading following the benign inflation data. While the white metal has since stabilized within the intraday range, it is on track for a weekly gain of more than 3% and the second straight higher weekly close.



Silver has gained more than 100% year-to-date, spurred by robust supply/demand dynamics, Fed easing expectations, a weaker dollar, elevated geoplitical and trade risks, and rising worries about the U.S. fiscal situation. None of these drivers are likely to change materially in the new year, keeping focus on the upside.

That being said, silver remains quite extended and is historically prone to violent corrective activity. Record-high prices are attracting retail physical sellers. Even investors who bought in as recently as last month have already made more than a 20% return, which could prompt some profit-taking. It's also likely that commodity funds will look to book silver profits ahead of year-end.

However, I think the greatest near-term risk to the uptrend is revived concerns that the AI sector is overvalued. If such concerns are pushed to the fore again, the trade would anticipate a slowing of the build-out of data centers and AI infrastructure. NVIDIA's Q3 earnings beat pushed those worries to the back burner in November, but overvaluation risks linger.

The next upside target is well established at $59.966/$60.000. Beyond that, there's a very long-standing Fibonacci objective at $60.417 (127.2% retracement of the entire move from the 2011 high at $50 to the 2020 low at $11.703).

The early U.S. low at $57.839 protects the overseas low at $56.888. Thursday's low at $56.509 stands in front of the low for the week from 1-Dec at $56.232. Below the latter, former highs at $54.465/390 would be in play.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

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