Blog posts tagged with 'silver'

Gold pulled higher by surging silver, weaker dollar

OUTSIDE MARKET DEVELOPMENTS: U.S. consumers shrugged off inflation concerns and hunted early holiday deals, leading to the strongest Black Friday sales in history. Total sales were estimated $31.7 bln, a 4.1% increase over last year. Online spending alone hit a record $10.8 bln, up 9.8% year-over-year, according to Adobe Analytics.

Markets continue to eye the next week's FOMC meeting, and bets for a third consecutive rate cut have surged in recent weeks. The dovish pivot was driven by weaker – and perhaps dubious –incoming data and FedSpeak that suggested further easing was warranted. This offset last month's concerns about inflation and labor resilience. Fed funds futures currently put the probability of a 25 bp rate cut at 87.6%. 

Fed Chairman Powell will participate in a panel discussion this evening at Stanford, where he may comment on the economic outlook and monetary policy. Technically, Powell's remarks would fall within the Fed's pre-FOMC meeting 10-day "quiet period." If he does comment, I suspect he will remain neutral, perhaps with a slight dovish tilt.

The BLS will not be reporting the November jobs data this week as the repercussions from the government shutdown continue to reverberate. October data were withheld entirely and will be rolled into November in a delayed release slated for 16-Dec. That will leave the market to focus on claims data, the ADP survey, and Challenger Layoffs this week.

S&P Global Manufacturing PMI was revised up to 52.2 in November, versus a 51.9 preliminary read and 52.5 in October.

Manufacturing ISM slipped to a four-month low of 48.2 in November, below expectations of 48.6, versus 48.7 in October. The employment gauge retreated to 44, below expectations of 47, versus 46 in October.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$27.47 (+0.65%)
5-Day Change: +$96.13 (+2.33%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,585.51 - $4,381.21
Weighted Alpha: +62.15

Gold extended to six-week highs on the first trading day of September, building on the nearly 1.5% monthly gain notched in November. The yellow metal is being buoyed by record highs in silver, expectations for further Fed easing, and a weaker dollar.



The breach of the 13-Nov high at $4,244.81 clears the way for a challenge of the $4,275.46 Fibonacci level. Above that, gold's all-time high at $4,381.21 would be back in play.

With silver charging higher into record territory, I do expect gold to follow suit. Beyond $4,381.21, focus would be $4,515.53 based on a Fibonacci projection, but such a move would also return considerable credence to the long-standing $5,000 objective.

The $4,207.09/$4,200.00 zone marks initial support. Friday's low at $4,153.68 is the more important short-term level to watch.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.762 (+1.34%)
5-Day Change: +$6.940 (+13.51%)
YTD Range: $28.565 - $58.833
52-Week Range: $28.565 - $58.833
Weighted Alpha: +107.36

Silver has extended to new record highs for a second straight session, driven by expectations that the Fed will cut rates next week, a weaker dollar, and diminished worries about the AI sector. Silver posted its seventh straight monthly gain in November and is off to a great start in December.



The white metal has gained more than 10% in just the last two sessions alone! Scope is seen for a short-term test of $60, which corresponds closely with a Fibonacci extension target at $59.966. 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).

Yes, the market is overbought, and corrections are likely to be violent, but buying into dips remains favored amid broadly supportive fundamentals. Hang onto your hats!

First support is marked by previous intraday highs $57.582/812. The $57 zone provides an additional intervening barrier ahead of today's Asian low at $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 and silver retreat from new highs for the week ahead of event risks

Outside Market Developments: Risk appetite remains neutral as markets continue to eye the release of backlogged data from the government shutdown. There are concerns that some data will be permanently impaired or go unreleased. As a result, there has been virtually no fresh official economic data available in recent weeks to gauge the data relative to consensus expectations, leaving economists and the Fed trying to navigate with stale pre-shutdown figures and heightened uncertainty about Q4 growth and inflation trends.

The probability of a December rate cut continues to hover around 40%, amid uncertainty about the incoming data and recent FedSpeak that has tilted toward caution. However, the market still believes in the easing bias, with Fed funds futures implying 83 bps in additional cuts by the end of 2026.

The minutes from the October FOMC meeting will be scrutinized for additional clues about the likely December policy decision. Further signs of caution could keep the pressure on equities and support the dollar.

Tomorrow's delayed release of September jobs data will certainly factor into Fed expectations. The market is anticipating a gain of 45k jobs and the unemployment rate to hold steady at 4.3%. Anything that disappoints on the labor front will increase the likelihood of a December easing.

Nvidia reports Q3 earnings after the bell today and is arguably the biggest event risk of the week. The chip giant is seen as a bellwether for the AI sector, and more broadly, the tech sector. Results and guidance are expected to either calm fears about an AI bubble or trigger more selling, with potential for outsized impact on the entire Nasdaq and S&P 500 given Nvidia's massive index weighting.

Nvidia has beaten Wall Street consensus estimates for both revenue and adjusted EPS for 21 straight quarters. Analysts expect another modest beat today, but the bar is extremely high after the stock's massive run. 

Wall Street has grown increasingly concerned that AI isn’t yet generating enough revenue or profits to justify the huge spending on infrastructure. Alphabet CEO Sundar Pichai recently warned that the “AI investment boom has elements of irrationality.”

MBA Mortgage Applications fell 5.2% in the week ended 14-Nov, versus +0.6% in the previous week. “Mortgage rates increased for the third consecutive week, with the 30-year fixed rate inching higher to its highest level in four weeks at 6.37 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.

Balance of Trade narrowed 23.8% to -$59.6 bln in August, inside expectations of -$60.5 bln, versus -$78.2 bln in July. That's the narrowest deficit since March of 2023.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$45.51 (+1.12%)
5-Day Change: -$77.67 (-1.85%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,585.51 - $4,381.21
Weighted Alpha: +54.82

Gold climbed to new highs for the week, buoyed by safe-haven demand ahead of event risks in the latter half of the week. However, gains above $4,100 could not be sustained as the greenback was also garnering some haven interest, which pushed the dollar index back above 100.



If Nvidia earnings miss expectations (+$1.23 - $1.26 EPS), and/or Q4 guidance disappoints (+$1.37 EPS), look for a substantial risk-off reaction. I would expect a miss to weigh on gold initially due to deleveraging pressures.

The $4,000.00/$3.998.62 level marks initial support and protects the rising 50-day MA at $3,963.95. Below the latter, the October low at $3,887.03 wouild be in play. A new low for the move would target $3,800 initially, but potential would be to the $3,754.16 (50% retrace of the rally from $3,127.12 to $4,381.21).

A convincing move back above $4,200 would keep focus on the underlying uptrend. Today's earlier high at $4,132.58 marks an important intervening barrier. An eventual breach of last week's high at $4,244.81 would bode well for tests of $4,275.46 (Fibonacci) and $4,381.21 (all-time high).

Central bank gold purchases have been a significant driving force behind the rally. An FT article estimates that China's gold purchases are more than 10 times the official figures reported by the PBoC. China's opaque over-the-counter transactions, involving intermediaries like the sovereign wealth fund, CIC, and even the military, have become a major hidden driver behind gold's record-breaking rally to all-time highs.

According to Société Générale, China's actual gold purchases in 2025 are likely to reach 250 tonnes or more, significantly higher than the roughly 20 - 30 tonnes reported. China's underreporting has been a long-held, but not unwarranted, belief in the gold market for years.

You may recall that the PBoC dropped a bombshell on the market a decade ago, revealing in July 2015 that reserves had increased from 1,054 tonnes (unchanged since 2009) to 1,658 tonnes – a sudden jump of 604 tonnes (57%)! Speculation about underreporting was also rampant back then, and the news contributed to a short-term price drop as the "mystery" of hidden buying was resolved.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.421 (+2.80%)
5-Day Change: -$1.400 (-2.63%)
YTD Range: $28.565 - $54.465
52-Week Range: $28.565 - $54.465
Weighted Alpha: +78.38

Silver reached a new high for the week above $52, but like gold, intraday gains could not be sustained amid event risk today and tomorrow. A firmer dollar provided an additional headwind for the white metal.



Silver is a bit of a mixed bag at these levels. I'm encouraged by the market holding above the 20-day moving average, but troubled by the potential double top. While I continue to like the long-term fundamentals for silver, bad news from Nvidia today could signal a reduction in AI infrastructure spending, sending silver to new corrective lows on expectations of reduced demand and deleveraging.

A breach of the 20-day at $49.302 would set up a test of the 50-day at $47.957. Below the latter, decent chart support at $46.910/885 protects the October low at $45.563.

A close above $52 would be encouraging to the bull camp, favoring another run at the $54.390/465 highs. Fresh record highs would target the $56.885 Fibonacci projection initially.

Be prepared for short-term volatility.


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 extend losses as rate cut hopes dim and dollar firms

OUTSIDE MARKET DEVELOPMENTS: The release of backlogged economic data this week –especially September jobs and October CPI/PPI – will provide the first post-shutdown snapshot of the U.S. labor market and inflation, potentially swinging December Fed rate-cut odds higher or lower depending on the prints. However, October figures are likely to be distorted or incomplete due to missed surveys during the record 43-day shutdown, which creates unusually high uncertainty, risk of sharp market reactions, and the probability of significant subsequent revisions.

Fed funds futures currently put the probability of a 25 bps rate cut in December at 39.9%, versus 44.4% on Friday, 62.4% a week ago, and 93.7% a month ago. At this point, the implied Fed funds rate for January is 3.7675%, suggesting the market is pricing in just 11 bps of easing for the first FOMC of 2026.

Waning rate cut bets in recent weeks have provided some support for the dollar. However, dollar index gains above 100 have proven unsustainable thus far, with the 200-day moving average limiting the upside. Generally weak momentum on upticks suggests the dominant trend remains bearish.



Tensions between Japan and China remain elevated following remarks by Japan's new Prime Minister Sanae Takaichi, who suggested that a Chinese military move against Taiwan could prompt a Japanese response. China has deployed Coast Guard vessels near disputed islands, issued travel warnings to its citizens urging them to avoid Japan, and signaled potential economic reprisals. Tokyo has dispatched a senior diplomat to Beijing in a bid to de-escalate the situation.

Empire State Index rose eight points to a 12-month high of 18.7 in November, well above expectations of 6.0, versus 10.7 in October. It was the fourth positive reading out of the last five months.

Construction Spending rose 0.2% in August, above expectations of -0.1%, versus +0.2% in July. It was the third consecutive monthly gain.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$2.29 (-0.06%)
5-Day Change: -$40.51 (-0.98%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,563.07 - $4,381.21
Weighted Alpha: +52.63

Gold remains defensive, weighed by a firmer dollar, uncertainty about U.S. data, and the implications for Fed policy. U.S. fiscal worries and rising geoplitical tensions provide some underpinning.

 

While last week's rebound above $4,200 could not be sustained, the magnitude of the gains did return a measure of credence to the underlying uptrend. Despite the sell-off into the weekend, gold is generally holding above the 20-day moving average.

Further consolidation within the $4,381.21/$3,887.03 range seems likely as the market sorts out the veracity of the incoming data and whether it warrants the Fed continuing the easing cycle. The 50-day MA climbing above the range low bolsters the scenario that suggests the corrective low is in.

This outlook would be called into question if the trade comes to believe that the Fed is back on hold for an extended period. That would clear the way for a sustained move in the dollar index above 100, and a fresh round of corrective losses in gold.

I'm watching the 20-day MA at $4,060.89 on a close basis. Below that, Friday's low at $4,038.83 protects the $4,000 zone, and the 50-day MA at $3,946.62.

Gold ETFs saw modest inflows from all regions last week, totalling 16 tonnes. However, Asian investors led the way with 7.4 tonnes of net buying.

The halfway back point of the decline from last week's high comes in at $4,414.82. A breach of this level would provide some encouragement to the bull camp and bode well for further tests above $4,200. Today's Asian high at $4,106.37 provides a minor intervening barrier.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.437 (+0.86%)
5-Day Change: +$0.380 (+0.75%)
YTD Range: $28.565 - $54.465
52-Week Range: $28.565 - $54.465
Weighted Alpha: +73.81

Silver is trading lower for a third straight session, weighed by dimming rate cut hopes and a firmer dollar. While the white metal has tumbled more than 8% from last week's high, it's still up nearly 3% for November.



The retreat below $50 does lend some credence to the potential double top at $54.390/$54.465, but the true confirmation point is still a long way away at $45.563. Confidence in this chart pattern will be boosted further upon a breach of $49.000/$48.934.

The 20-day moving average bolsters this area. The bull camp will want to see silver stay above $49.006 on a close basis. If it can't, it will open up potential to the 50-day MA at $47.560, and a retest of the October low at $45.563 would have to be considered.

A rebound above today's Asian high at $51.307 is needed to ease pressure on the downside somewhat. Penetration would shift focus to the $52 zone. Conditions seem likely to remain choppy in the short term.


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 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.