Zaner Daily Precious Metals Commentary
Thursday, May 29, 2025Gold firms on risk-off sentiment despite court decision on tariffs
OUTSIDE MARKET DEVELOPMENTS: A U.S. Court of International Trade struck down Donald Trump’s reciprocal tariffs and ordered his administration to stop collecting them. The court ruled that Trump's use of the International Emergency Economic Powers Act was unlawful.
“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” according to the three-judge panel. The White House immediately appealed the decision, leaving markets uncertain about the implications.
Even if the appeal is not decided in favor of the White House, I expect Trump to seek other means to exert pressure on U.S. trading partners. Sanctions, for example, are an option that could be even more disruptive to global markets. Going back to the status quo on trade strikes me as highly unlikely.
With tariffs on hold during the appeals process, the market's focus intensifies on fiscal, growth, and geopolitical risks. Risk appetite remains tilted toward risk-off.
Not surprisingly, the minutes from the May FOMC meeting showed that the committee continues to highlight uncertainty with risks perceived on both sides of the dual mandate. The Fed wants more clarity before moving on policy.
Prospects for rate cuts continue to fade. The first cut is not fully priced in until October, with 50 bps in easing projected by year-end.
Q1 GDP (2nd report) was revised up to -0.2%, inside expectations of -0.4%, versus an advance read of -0.3% and +2.4% in Q4'24. Personal consumption expenditures were adjusted down to 1.2% from 1.8%. The PCE price index was unchanged at 3.6%, while the core price index was revised down to 3.4% from 3.5%.
Initial Jobless Claims rose 14k to a five-week high of 240k in the week ended 24-May, above expectations of 230k, versus a revised 226k in the previous week (was 227k). Continuing claims surged 16k to 1919k in the 17-May week, versus an upwardly revised 1903k in the previous week (was 1,893k).
Pending Home Sales Index fell 6.3% to 71.3 in April, below expectations of -0.9%, versus a 5.5% rise to 76.1 in March; -2.5% y/y. "At this critical stage of the housing market, it is all about mortgage rates. Despite an increase in housing inventory, we are not seeing higher home sales. Lower mortgage rates are essential to bring home buyers back into the housing market," said NAR Chief Economist Lawrence Yun.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$9.24 (+0.28%)
5-Day Change: +$17.33 (+0.53%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,287.64 - $3,495.89
Weighted Alpha: +44.07
Gold rebounded from overseas losses as markets rethought the implications of Trump's federal court loss on tariffs. The haven bid intensified amid increased uncertainty and a retreat in the dollar.
With Trump's tariff strategy still in the hands of the courts, in the form of an appeal, markets have plenty of other things to fret over. These include geopolitical and growth risks, and fiscal worries associated with the "Big Beautiful Bill" making its way through Congress.
Earlier losses were successfully contained by support at $3,250.00/$3,246.26, reinforcing this area and leaving the rising 50-day moving average at $3,228.27 well protected. The quick move back above $3,300 and breach of yesterday's high at $3,224.40 keeps the technical bias to the upside.
Scope is seen for a retest of last week's high at $3,365.41. Penetration of this level would bode well for a move back above $3,400 with potential for fresh record highs.
SILVER
OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$0.433 (+1.31%)
5-Day Change: +$0.374 (+1.13%)
YTD Range: $28.565 - $34.543
52-Week Range: $26.524 - $34.853
Weighted Alpha: +11.71
Silver continues to track gold amid ongoing trade uncertainty, rebounding from an overseas dip to $32.763. The intraday tumble in the dollar helped propel the white metal back above $33. However, price action remains confined to last week's range, leaving the short-term tone consolidative.
A breach of last week's high at $33.690 would be an encouraging technical event, but the upside is thought to be limited as long as key resistances at $34.543 and $34.853 are intact.
A minor chart point at $32.694, bolstered by the 20- and 50-day moving averages, successfully contained today's overseas losses. Should this area give way, the 100-day MA at $32.296 would be the attraction.
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.