Blog posts tagged with 'precious metals'

Gold fails to sustain gains back above $4,200 as rate cut expectations ebb

OUTSIDE MARKET DEVELOPMENTS: The longest government shutdown in U.S. history ended at 43 days after President Trump signed the funding bill late last night. While the shutdown unlocks delayed economic data releases from the past six weeks, there are concerns about the veracity of those data, and the trade swung toward risk-off today.

The White House has warned that October data may never be released due to collection gaps, leaving policymakers with incomplete information ahead of the December FOMC meeting. Expectations that the Fed may hold steady in December and wait for the dust to settle have edged higher. Fed funds futures now put the probability of a December rate cut at 47.6%, down from 62.9% yesterday and 69.6% a week ago. Doubts have crept into January expectations as well.

No official consolidated calendar has been published yet, but the backlog of reports should start coming out beginning next week. Veracity notwithstanding, there are concerns that the data will reveal that job growth continues to slow amid broader economic deceleration.

If that proves to be the case, Fed easing expectations will rebound, but only if the data also indicate inflation is in check. The general gist of yesterday's raft of FedSpeak tilted hawkish, emphasizing persistent inflation risks over labor market softening.

Atlanta Fed President Raphael Bostic announced that he will retire when his term ends in February. Bostic has historically been a dovish-leaning centrist who turned hawkish late last year amid heightened inflation worries. I expect President Trump will nominate another ardent dove similar to Stephen Miran.

Tensions between China and Japan over Taiwan have escalated following Japanese Prime Minister Sanae Takaichi's parliamentary remarks last week. Takaichi said that a Chinese military attack on Taiwan could constitute a "survival-threatening situation" for Japan, potentially justifying the deployment of its Self-Defense Forces in collective defense. China responded with strong condemnation, through its foreign ministry and a provocative social media post by its consul general in Japan, implying violent retaliation.

Pakistan is attributing recent militant attacks in Islamabad to the Taliban regime in Afghanistan. A ceasefire mediated by 
Qatar and Turkey broke down earlier in the month, and the two sides now seem on the verge of war.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$35.57 (+0.85%)
5-Day Change: +$246.92 (+6.21%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,541.42 - $4,381.21
Weighted Alpha: +67.84

Gold is retreating from today's earlier three-week high amid waning expectations for another rate cut in December. However, heightened geopolitical tensions, fiscal concerns, political unrest, tariff uncertainties, and a weaker dollar provide underpinning to the market.



The failure to sustain the 4200 handle and the subsequent drop to new intraday lows leaves chart support from earlier in the week at $4,099.28/97.60 vulnerable to a test. Secondary support is offered by the declining 20-day moving average that comes in at $4,072.11.

Gold is still more than 3% higher on the week, and with more than 61.8% of the entire corrective decline retraced, significant confidence has been returned to the underlying uptrend. The next retracement level I'm watching is at $4,275.46 (78.6%). Beyond that, the all-time high at $4,381.21 is very much back in play. Minor chart resistance at $4,210.81/11.58 and today's intraday high at $4,244.81 become intervening barriers.

An eventual move to new record highs would bode well for tests above $4,400, but potential at that point would be to $4,515.63 based on a Fibonacci extension. Further out, $5,000 remains a valid objective.

UBS has recently said that it remains bullish on gold, forecasting a price target of $4,200 amid strong central bank purchases, robust ETF inflows, and escalating geopolitical risks that bolster its safe-haven appeal. The bank views the recent pullback as temporary, with upside potential to $4,700 if tensions intensify or market volatility spikes.

SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.524 (+0.98%)
5-Day Change: +$5.356 (+11.15%)
YTD Range: $28.565 - $54.465
52-Week Range: $28.565 - $54.465
Weighted Alpha: +91.30

Silver gains stalled just shy of the $54.465 record high from 17-Oct, leaving a potential double top. Despite the intense intraday sell-off of more than 4%, the magnitude of the gains notched earlier in the week bolstered confidence in the long-term uptrend.

 

However, volatility remains high as the market continues to equalize after London inventories plunged to record lows earlier in the year amid tariff worries. With that threat seemingly behind us, the flow of metal reversed as traders sought to capitalize on a "historic arbitrage opportunity" according to Bloomberg, "pulling stocks out of warehouses elsewhere."

"Vaults underpinning the London market added nearly 54 million troy ounces of silver in October, an amount weighing more than 100 of the UK capital’s iconic double-decker buses."

At this point, I'm not inclined to give much credence to the potential double top given that silver's fundamentals remain broadly supportive thanks to its dual role as both a safe-haven asset and a key industrial metal facing supply constraints from robust demand in solar panels, electronics, AI and 5G infrastructure, and EVs.

A move to new all-time highs would favor tests above $55, with potential to $56.886 based on a Fibonacci extension. Such a move would also boost confidence in the extended bullish scenario that targets $60.

Intraday resistances at $53.270 and $54.000/115 now protect the $54.390/465 highs.

On the downside, first support is at $52.090/000. More important levels are $50.877, $50.297, and the low for the week at $49.359. The low for the week at $48.335 is thought to be well protected.


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 led higher by surging silver, softer dollar

Outside Market Developments: The Senate was able to invoke cloture on Sunday, ending the Democrat filibuster on the House-passed CR after 14 prior failed attempts. The vote was  60-40 with eight Democrats crossing the aisle to vote with all Republican Senators in favor of advancing a modified version of the CR that extends government funding through January 30, 2026.

The Senate will now consider the modifications, and passage by a simple majority vote is likely today or tomorrow. At that point, the modified CR will go back to the House for a vote. Speaker Mike Johnson has pledged to reconvene the House quickly – potentially as early as Tuesday – for debate and a vote. Once the Senate and House have passed identical versions of the CR, it will go to the President's desk for his signature, and the government will reopen.

Optimism that the shutdown will end this week stoked risk appetite, sending stocks higher. Strong AMD earnings provided an additional boost to the tech sector. Meta, Microsoft, Apple, and Amazon also report earnings this week. Additionally, November is historically the strongest month for equities.

The trade may remain cautious as the various government agencies have a backlog of data releases that were delayed by the shutdown. We expect a period of compressed releases over 1-2 weeks, although this can increase volatility and necessitate revisions.

Last week's University of Michigan preliminary consumer sentiment reading for November 2025 plunged 6.2% to 50.3, close to the record low of 50.0 from June 2022, driven primarily by widespread anxieties over the prolonged federal government shutdown's economic fallout. While an end to the shutdown will improve broader sentiment, the 17% plunge in views about personal finances may continue to pose a headwind into the all-important holiday shopping season. 

An end to the shutdown will return market focus to America's dire fiscal situation. The debt/GDP ratio is on an unsustainable path, driven by persistent primary deficits and escalating net interest payments that could crowd out private investment and slow economic expansion.

Any slowing of that trajectory associated with the collection of tariffs is suddenly in doubt following skepticism expressed by Supreme Court justices during oral arguments last week. SCOTUS is expected to rule on the legality of President Trump's tariff regime before the end of the year.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$84.33 (+2.11%)
5-Day Change: +$112.75 (+2.82%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,541.42 - $4,381.21
Weighted Alpha: +61.91

Gold is up more than 2% as the dominant uptrend tries to reassert itself. Silver is leading the way, with prospects for further Fed easing and a weaker dollar contributing to the yellow metal's bid.



While the probability for a December rate cut is holding just above 60%, the market may be shifting its focus to the January FOMC meeting. A 25 bps cut is fully priced in for January.

One might expect that an end to the shutdown would weigh on the safe-haven appeal of gold as investors jump back into risk assets. However, gold has been rallying alongside the AI-inspired stock market throughout the year amid persistent worries about the economy, the grim fiscal outlook, political unrest, geopolitical and trade concerns, expectations of further Fed easing, and a generally weak dollar.

The demand picture for gold remained robust in Q3, according to the World Gold Council. Total gold demand grew 3% y/y to 1,313 tonnes, the highest quarterly total in the WGC data series. This was driven largely by investment. "Huge ETF buying (+222t), accompanied by a fourth successive quarter of bar and coin demand above 300t (316t) fuelled the rise in overall demand."

Central bank gold buying "remained elevated" at 220 tonnes, +28% versus Q2. Brazil rejoined the party, adding 16 tonnes to reserves in September. It was Brazil's first purchase since 2021.

Jewelry consumption posted a sixth straight quarterly decline, weighed by record-high prices. Technology demand was slightly weaker, as "AI demand met with headwinds from US tariff policy and the surging gold price."

ETF inflows were little changed last week at +2.3 tonnes as the market consolidated the October losses. North American outflows over the past three weeks were fairly limited at 10.8 tonnes, suggesting a level of commitment to the trade.

Clyde Russel of Reuters wrote an interesting piece last week, where he reveals that while gold's rally looks huge, it's only the third largest in the last 50 years. The current rally is "actually well behind the price increases recorded in the late 1970s and again in the 2000-2011 uptrend."

Does that suggest the market still has room to run? I continue to like the fundamentals, and while attainment of the $5,000 objective seems less likely before year-end, I think we could see it early in Q1. 

Today's tests above the 20-day moving average return a degree of confidence to the underlying uptrend. A close above this indicator at $4,082.03 would offer further encouragement to the bull camp.

With more than 38.2% of the decline now retraced, focus shifts to the 50% retracement level at $4,134.12. A series of highs from late-October at $4,143.81/$4,154.65/$4,161.10 bolster this area. Penetration would highlight the 61.8% retracement level at $4,192.43.

Today's early U.S. low at $4,075.40 marks first support. Below that, cogestive chart support is found at the $4,000 zone.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.777 (+3.68%)
5-Day Change: +$2.459 (+5.11%)
YTD Range: $28.565 - $54.465
52-Week Range: $28.565 - $54.465
Weighted Alpha: +77.70

Silver has rebounded more than 4%, encouraged by the anticipated end to the government shutdown and ongoing optimism about the tech sector. A weaker dollar and persistent expectations for further Fed easing provide additional lift.



More than 50% of the entire corrective decline has already been retraced, and a close above the 20-day moving average looks likely. These gains return considerable confidence to the underlying uptrend. Sights are now on the 61.8% retracement level at $51.064, and penetration will further embolden the bull camp.

I'll watch $50 on a close basis today. Former chart resistance at $49.359 is bolstered by the 20-day MA at $49.349, and is the more important short-term support level.


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 struggles above $4,000 despite a weaker dollar

OUTSIDE MARKET DEVELOPMENTS: The government shutdown drags on as Senate Democrats continue to block the House-passed continuing resolution. In the wake of Tuesday's election results, hopes for a bipartisan deal to reopen the government have seemingly been dashed as Democrats have dug in even harder on their demands for healthcare concessions before they would consider ending the filibuster.

Ultimately, Congress has a Constitutional and statutory obligation to pass a budget each fiscal year. Both parties have shirked this fundamental obligation for almost 30 years. The last time Congress passed all required appropriations bills (funding the full federal discretionary budget) on time – enacting them into law before the start of the new fiscal year on October 1 – was for fiscal year 1997. Since then, it's just been one CR or omnibus package after another for decades!

There is a lot of FedSpeak slated for today, but the gist thus far is one of caution. Cleveland Fed President Hammack said the central bank is carefully balancing its dual mandate of maximum employment and price stability on an "economic tightrope." Chicago Fed President Goolsbee warned that he's "even more uneasy" about front-loading further rate cuts due to the government shutdown creating a "blackout" on critical inflation data.

We're also going to miss another jobs report tomorrow due to the shutdown. This week's jobs data from private sources has been mixed. Wednesday's ADP survey beat expectations, but today's Challenger Layoffs print was higher than expected.

Perceived weakness in the jobs market has been an important contributing factor to recent Fed dovishness. The probability of a December rate cut edged up to 69.9% from 62% yesterday, but uncertainty prevails.

Recent gains in the dollar index were successfully capped by the 200-day moving average, prompting a retreat back below 100. Today's setback is reflective of the rebound in dovish Fed expectations.

Challenger Layoffs surged to a seven-month high of 153.1k in October, above expectations of 73k, versus 54k in September. It is the largest October gain in announced job cuts since 2003.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$38.95 (+0.98%)
5-Day Change: -$39.42 (-0.98%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,541.42 - $4,381.21
Weighted Alpha: +50.94

Gold climbed back above $4,000 in overseas trading, buoyed by a revived haven interest associated with the ongoing shutdown and fresh worries about the legality of Trump's tariffs. A softer dollar, stemming from an uptick in December rate cut expectations, provides some additional lift.



However, gains above $4,000 could not be sustained in U.S. trading. Recent choppiness is suggestive of a market trying to form a bottom, but I'm not convinced that the corrective low is in yet.

The World Gold Council acknowledged that gold experienced a "momentum flush out" in October. They note that technical analysis "points to a much-needed pause but no damage to gold’s trend, which remains supported by solid fundamentals."

The WGC outlook is consistent with my own. The dominant trend is still bullish, making the October losses corrective in nature. Subsequent consolidation continues to relieve the overbought condition that developed after successive record highs throughout the year.

We may still see a test of the 50-day moving average, but that could come from the 50-day catching up to the market at or near its current level. The indicator is already within $20 of the corrective low thus far at $3,887.03 (28-Oct). That's going to fortify that support level.

Intervening barriers are marked by lows from earlier this week at $3,930.59/29.37 and the 30-Oct low at $3,915.82.

I would view a close above the 20-day moving average at $4,083.01 as compelling evidence that the low is in. The 20-day continues to correspond closely with the 38.2% retracement level of the correction at $4,075.81.

A breach of the 30-Oct high at $4,045.01 would put $4,075.81/$4,083.01 in play. Above the latter, focus would shift to the halfway back point of the decline at $4,134.12.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.692 (+1.44%)
5-Day Change: -$0.798 (-1.63%)
YTD Range: $28.565 - $54.465
52-Week Range: $28.565 - $54.465
Weighted Alpha: +63.23

Silver is also struggling to sustain upticks today, despite improved hopes for another rate cut and weakness in the dollar. Uncertainty prevails on the trade and government shutdown fronts.



If Trump's tariffs are ruled to be illegal, will global trade start flowing as it was before April, or does the Trump administration have new measures queued up? It seems unlikely that President Trump will just fold.

Like gold, I see the October losses in silver as corrective within the dominant macro trend. All of the fundamental factors that drove silver to record highs are still in place, although, as mentioned in Tuesday's comment, there are some who believe regulatory action in China may ease the multi-year supply deficit. 

I'm watching the 20-day moving average for silver as well. The 20-day is at $49.530 and is protected by today's intraday high at $48.793 and the 31-Oct high at $49.359. A short-term close above the 20-day would bode well for a move back above $50 with potential to the $51.064 Fibonacci level.

On the downside, lows from earlier this week at $46.885/910 and the 50-day moving average at $46.147 protect the   $45.563 low from last week. The fact that the 50-day has climbed above the cycle low is significant, but here too, I'm not entirely convinced the low is in.

I expect the long-term bulls to continue to test the long side of the market when limited-risk opportunities are presented. 


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.