Blog posts tagged with 'silver'

Gold slides to four-week lows as trade and economic optimism weigh on haven demand, boost dollar

OUTSIDE MARKET DEVELOPMENTS: U.S. data continue to reflect an economy on a solid footing. This is stoking risk appetite, but may have implications for interest rates as the FOMC hashes out monetary policy ahead of this afternoon's decision.

U.S. GDP rebounded to 3.0% in Q2, after tariff front-running led to a contraction of 0.5% in Q1.  The GDP price index surprised with a drop to 2.0% from 3.8% in Q1. Better-than-expected growth and a significant slowdown in inflation; that's a great report.

The ADP employment survey showed a rebound of 104k to private payrolls, exceeding expectations. The labor market continues to look resilient. Median expectations for Friday's jobs report are +102k.

The Fed is widely expected to hold steady on policy, but today's data provides some additional fodder for consideration. The sharp drop in the price index arguably provides some clearance for easing, but the Fed's favored measure of inflation doesn't come out until tomorrow.

The potential for dovish dissent could provide some drama today. One FedWatcher I know and respect suggested Powell could tailor the statement to get a unanimous vote, but that suggests to me that it would have to be a statement with a dovish tilt.

The Bank of Canada held steady in line with expectations, amid ongoing trade uncertainty and a looming deadline. "While some elements of US trade policy have started to become more concrete in recent weeks, trade negotiations are fluid, threats of new sectoral tariffs continue, and US trade actions remain unpredictable," said the statement.

President Trump is holding to the August 1 deadline, when tariffs will increase for trading partners that have not struck trade deals. Trump called out India specifically, saying that 25% tariffs will take effect on Friday. He also threatened an additional "penalty" because India buys so much military equipment and energy from Russia.

MBA Mortgage Applications fell 3.8% in the week ended 25-Jul, versus +0.8% in the previous week. The 30-year mortgage rate ticked down to 6.83% from 6.84%.

ADP Employment Survey rebounded to +104k in July, above expectations of +82k, versus a revised -23k in June (was -33k).

GDP (Advance) rebounded 3.0% in Q2, above expectations of +2.3%, versus -0.5% in Q1. The chain price index fell to 2.0%, below expectations of 2.6%, versus +3.8% in Q1.

Pending Home Sales Index fell 0.8% to 72.0 in June, below expectations of +0.3%, versus -1.8% in May. The annualized rate fell to -2.8%.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$2.94 (+0.09%)
5-Day Change: -$82.08 (-2.42%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,369.10 - $3,495.89
Weighted Alpha: +33.41

Gold has slipped below $3,300 to four-week lows as trade and economic optimism pushed the dollar index to nine-week highs. Today's solid economic data further eroded safe-haven interest in the yellow metal.



Secondary support at $3,284.61 (9-Jul low) is within striking distance. A breach of this level would shift focus to the 100-day moving average at $3,267.60 and solid chart support at $3,256.02 (30-Jun low). If these levels are taken out, the $3,200 zone would be in play.

Gold remains entrenched in the range, and while decisively in the lower half, today's Fed decision could spark an intraday rebound. A close above $3,300 would set a more favorable tone within the range. The midpoint is at $3,311.51.

New highs for the week above $3,343.81 would put gold back above the 20- and 50-day moving averages, and bode well for renewed tests above $3,400. Formidable chart resistances at $3,435.01 (23-Jul high) and $3,449.13 (16-Jun high) must be negated to put the record high around $3,500 back in play.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.217 (-0.57%)
5-Day Change: -$1.673 (-4.26%)
YTD Range: $28.565 - $39.517
52-Week Range: $26.524 - $39.517
Weighted Alpha: +33.54

Silver fell to a three-week low, weighed by weakness in gold, softer copper, and nine-week highs in the dollar. Nearly 50% of the recent leg-up to 14-year highs has now been retraced, and the white metal is trading below the 20-day moving average. 



Further slippage seems likely, unless the Fed adopts a more dovish bent this afternoon. Economic data seem to provide some cover to do so, but despite recent trade agreements, uncertainty prevails ahead of the August 1 and August 12 (China) tariff deadlines.

If the 50% retracement level at $37.443 is penetrated, focus would shift to the 61.8% Fibonacci level at $36.954. Below the latter, the rising 50-day MA at $36.408 would be in play.

A close today back above the 20-day MA would ease pressure on the downside somewhat, but $38.00 will probably have to be regained to reinvigorate the bull camp. New highs for the week above $38.316 would suggest a corrective low is in place.


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 near the midpoint of the range, eying trade developments and Fed

OUTSIDE MARKET DEVELOPMENTS: The market continues to focus on trade developments with the August 1 deadline fast approaching. Optimism, and therefore risk appetite, remains elevated in the wake of this week's agreement with the EU.

U.S. and Chinese negotiators are meeting in Stockholm to finalize a deal before the temporary trade truce expires on August 12. At a minimum, there is an expectation of an additional 90-day extension that could be a precursor to a face-to-face meeting between Trump and Chinese President Xi later in the year.

Negotiations between Canada and the U.S. are in an "intense phase," according to Canadian PM Mark Carney. The Japan and EU deals put pressure on Canada to strike an agreement. "We will only sign a deal that's the right deal, that's a good deal for Canada," Carney said.

The U.S. trade balance narrowed by $10.4 bln to -$86.0 bln in June, inside expectations of -$98.0 bln. The goods trade deficit has moderated in recent months as importers reduced orders after front-loading earlier in the year to avoid tariffs.

The Trump administration reportedly used trade pressure to get Cambodia and Thailand to agree to a ceasefire. Negotiations to resolve the long-standing border dispute are ongoing.

Trump also shortened the timeline for Russia to achieve a ceasefire with Ukraine to 10-12 days. Trump has grown increasingly frustrated by Moscow's attempts to improve its negotiating position by escalating attacks even as talks are ongoing. "I'm disappointed in President Putin, very disappointed in him," Trump told reporters.

The two-day FOMC meeting begins today. When policy is announced tomorrow, the central bank is widely expected to hold steady. What's going to be interesting is how many committee members dissent against that decision. At least one is likely (Waller), but it could be two (Bowman?). The results could spark some movement in Fed funds futures.

We'll also get policy decisions from the Bank of Canada and the BoJ this week.

Advance Goods Trade -$86.0 bln in June, inside expectations of -$98.0 bln, versus -$96.4 bln in May.

Case-Shiller Home Price Index (20-city) rose 0.4% to a record high 343.0 in May, versus 341.6 in April. It was the fifth straight monthly rise. The annualized rate of appreciation slowed to 2.8% from 3.4% in April.

FHFA Home Price Index fell 0.2% to a six-month low of 434.4 in May, versus 435.1 in April. It was the third straight monthly decline. The annualized rate of appreciation slowed to 2.8% from 3.2% in April.

Consumer Confidence rose 2 points to 97.2 in July, above expectations of 95.9, versus a revised 95.2 in June (was 93.0). Year-ahead inflation expectations ticked down to 5.8% from a revised 5.9% in June (was 6.0%).

JOLT Job Openings fell 275k to 7,437k in July, below expectations of 7,750k, versus a revised 7,712k in June (was 7,769k). Quits -128k to 3,142k. Layoffs -7k to 1,604k.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$7.05 (+0.21%)
5-Day Change: -$106.25 (-3.10%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,369.10 - $3,495.89
Weighted Alpha: +34.46

Gold has recovered modestly from a three-week low on Monday as the trade continues to eye tariff developments ahead of Friday's deadline. While the yellow metal remains well contained within the range, dips into the lower half of that range have attracted bids so far this week.



Trade optimism and expectations of steady Fed policy have pushed the dollar index to five-week highs above 99. Dollar strength poses a headwind for gold.

That being said, the yellow metal is holding up pretty well. I still see the chart formation that has emerged since May as a continuation pattern within the long-term uptrend.

Nonetheless, more progress on trade could weigh further on safe-haven demand for gold, sparking dips below $3,300. However, the important $3,256.02 low from 30-Jun has been fortified by the rising 100-day moving average. The 9-Jul low at $3,284.61 provides a good intervening barrier.

On the other hand, signs of dovish dissent at the Fed would likely increase the prospects for rate cuts later in the year. That would weigh on the dollar, providing some lift for gold.

Mondy's high at $3,343.81 corresponds closely with the 20- and 50-day moving averages. A rise above this zone would ease pressure on the downside somewhat, returning focus to $3,400.

Last week's high at $3,435.01 protects the June high at $3,449.13. The latter must be cleared to put the record high around $3,500 back in play.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.048 (-0.13%)
5-Day Change: -$1.231 (-3.13%)
YTD Range: $28.565 - $39.517
52-Week Range: $26.524 - $39.517
Weighted Alpha: +35.87

Silver remains defensive just above $38 after gains last week stalled ahead of $40. Trade optimism is seen as generally encouraging for silver, as the bulk of demand is driven by industrial uses.



While copper has backed off the record high set last week at $5.9844, the market remains generally well bid amid threats of 50% tariffs scheduled to take effect on August 1. Copper strength provides support for silver, but I still have a feeling that copper tariffs will get walked back.

While we're seeing modest bids around the $38 level, the market is keen to hear the Fed's decision on rates before picking a short-term direction. Friday's jobs report is also going to be important.

New highs for the week above $38.316 would shift focus to the halfway back point of the recent decline at $38.741. A breach of the latter would bode well for renewed tests above $39, with $40 still considered a valid target. A secondary objective is marked by a Fibonacci level at $41.610.

On the downside, Monday's low at $37.965 represents a slight penetration of the 38.2% retracement level of the leg up from $35.369 to $39.517. The rising 20-day moving average at $37.840 further bolsters this area. Penetration would shift focus to the next tier of chart/Fibonacci support at $37.557/443. 


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 retreats toward the midpoint of the range, weighed by trade optimism

OUTSIDE MARKET DEVELOPMENTS: President Trump adopted a more conciliatory tone after touring the Fed renovation with Chairman Powell, calling it a "great honor." In a TruthSocial post, he urged, "let’s just get it finished and, even more importantly, LOWER INTEREST RATES!"

Trump also seemed to back away from previous threats to fire Powell. “To do that is a big move, and I just don’t think it’s necessary,” Trump said.

“I think we had a very good meeting on interest rates. And [Powell] said to me ... very strongly, the country is doing well," Trump told reporters. “I think he’s going to start recommending lower rates,” Trump added.

The FOMC meets next week and is widely expected to remain on hold for a fifth consecutive meeting. The last rate cut was in December 2024.

There is expected to be some dovish dissent this time around, which could suggest mounting pressure for easing later in the year.  However, we may not get that clarity until the minutes are released later in August.

Overall risk appetite remains elevated in anticipation of more trade agreements before the August 1 deadline. If the White House can finalize deals with the EU, Canada, and Mexico, the rest will take care of itself. However, the EU is prepared to retaliate if an agreement is not achieved, which will lead to in-kind U.S. retaliation, according to Trump.

The border dispute between Thailand and Cambodia escalated on Friday with the combatants exchanging heavy artillery and rocket fire. The situation “could escalate into a state of war,” warned Thai Prime Minister Wechayachai. 

Durable Orders fell 9.3% in June, inside expectations of -10.0%, versus a revised +16.5% in May ( was +16.4%). Ex-trans rose 0.2%, versus +0.6% in May (was +0.5%). 

GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$8.39 (-0.24%)
5-Day Change: -$9.06 (-0.27%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,358.18 - $3,495.89
Weighted Alpha: +38.08

Gold is under pressure for a third straight session as trade optimism continues to weigh on safe-haven interest. A two-day uptick in the dollar provides some additional pressure. The yellow metal appears poised for a second straight lower weekly close.



The yellow metal is trading just above the midpoint of the range and pressuring the lower limits of the triangle pattern. Selling interest emerged midweek from in front of the 16-Jun high at $3,449.13.

With this level intact, the record high at $3,500 remains protected. The $3,392.11/3,400.00 zone now provides an additional layer of intervening resistance.

Persistent dollar weakness suggests the downside is likely limited from here. It wouldn't be surprising to see the shorts take some profits ahead of today's close. I'm watching the 20-day ($3,345.70) and 50-day ($3,340.91) moving averages on a close basis.

More important support is noted at $3,311.71/51, where last week's low corresponds with the midpoint of the range. Below that, keep an eye on the 9-Jul low at $3,284.61 and the June low at $3,256.02.

The bull camp is may be slightly disheartened by this week's failure to sustain the push to five-week highs above $3,400. However, all we've really seen in the second half of the week is a confirmation that gold remains locked within the range that has dominated since the $3,127.12 corrective low was established on 15-May.

Gold is trading less than 5% off its all-time high, suggesting a level of market resilience.  The underlying uptrend is not in any immediate jeopardy, suggesting dips within the well-defined range will continue to be viewed as buying opportunities.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.329 (-0.84%)
5-Day Change: +$0.577 (+1.51%)
YTD Range: $28.565 - $39.517
52-Week Range: $26.524 - $39.517
Weighted Alpha: +42.09

Silver has dropped more than 2% today after the push to 14-year highs earlier in the week stalled shy of the $40 level. The white metal has fallen to new lows for the week and appears on track for a second straight lower weekly close. Copper's retreat from record highs and a slightly firmer dollar weigh.



Nearly 38.2% of the leg up from $35.369 to $39.517 has already been retraced. The next important chart point is last week's low at $37.557. This level is bolstered by the 20-day MA at $37.631 and the halfway back point of the aforementioned move at $37.443.

While the magnitude of the retreat from $39.517 is somewhat of a concern, losses thus far are less than 3.5%. Keep in mind that silver surged more than 4% in the first half of the week, suggesting that selling into the weekend is probably profit taking.

The underlying trend remains bullish. A rebound next week above $38.736/785 would return confidence to the bull trend and favor a true test of $40. Beyond the latter, the $41.610 Fibonacci level 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.

Gold retreats into the range, weighed by trade optimism

OUTSIDE MARKET DEVELOPMENTS: The European Commission is suggesting that a trade agreement with the U.S. is likely ahead of the August 1 deadline. "Our focus is on finding a negotiated outcome with the U.S. ... We believe such an outcome is within reach," said an EU spokesperson.

Coming on the heels of yesterday's announcement of a trade deal with Japan, markets remain decisively in risk-on mode. The major U.S. indexes are trading at or near all-time highs, driven by optimism over trade, signs of a resilient U.S. economy, and generally favorable Q2 earnings reports.

On Wednesday, President Trump revealed his AI action plan for achieving U.S. global AI dominance, providing an additional boost to tech stocks. The key tenets of the plan include removing federal regulations that hinder AI, building AI data centers, and exporting U.S. AI globally. 

Trump is slated to visit the Fed today to inspect the $2.5 bln renovation of the Eccles building. I anticipate the real estate developer in chief will have much to say about the project. Along with Trump's recent pressure on Chairman Powell to lower interest rates, the visit is thought by many to be a serious infringement on the central bank's independence.

The ECB held steady on rates today, as was widely expected. "Domestic price pressures have continued to ease, with wages growing more slowly. Partly reflecting the Governing Council’s past interest rate cuts, the economy has so far proven resilient overall in a challenging global environment. At the same time, the environment remains exceptionally uncertain, especially because of trade disputes," according to the press release.

In her presser, ECB President Lagarde noted slightly better-than-expected growth and anchored inflation, but still sees two-way risks in both cases. This raises some questions about whether this is just another one-meeting pause or if a protracted hold has begun.

Israel and the U.S. have recalled their negotiating teams from Qatar. Hamas “shows a lack of desire to reach a ceasefire in Gaza,” said U.S. special envoy Steve Witkoff. “It is a shame that Hamas has acted in this selfish way. We are resolute in seeking an end to this conflict and a permanent peace in Gaza,” he added.

A longstanding border dispute between Thailand and Cambodia flared on Thursday, with each side firing on the other. The AP reported that Thailand also launched air strikes. At least 12 people were killed, mostly civilians.

Initial Jobless Claims fell 4k to a 14-week low of 217k in the week ended 19-Jul, below expectations of 230k, versus 221k in the previous week. Continuing claims rose 4k in the 12-Jul week to 1,955k from a revised 1,951k in the previous week (was 1,956k).

S&P Flash Manufacturing PMI unexpectedly dropped 3.4 points to 49.5 in July, below expectations of 52.6, versus 52.9 in June. It was the first print below 50 since December.

S&P Flash Services PMI rose 2.3 points to a seven-month high of 55.2 in July, above expectations of 53.0, versus 52.9 in June.

New Home Sales rose 0.6% to a 0.627M pace in June, below expectations of 0.650M, versus 0.623M in May.

Chicago Fed National Activity Index rose 0.06 points to -0.10 in June, versus -0.16 in May (was -0.28).


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$23.54 (-0.69%)
5-Day Change: +$18.88 (+0.57%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,354.48 - $3,495.89
Weighted Alpha: +39.00

Gold continues to be weighed by optimism about tariff developments and an uptick in the dollar. With safe-haven interest dimmed, the yellow metal has retreated to the midpoint of the range-within-the-range, putting the 20- and 50-day MAs back in play.



The rally earlier in the week looked pretty promising for the bull camp, but gains stalled ahead of the 16-Jun high at $3,449.13. A breach of this level was needed to clear the way for a retest of the record high at $3,500. Wednesday's high at $3,435.01 provides a good intervening barrier.

With the range intact, consolidative trading prevails. A beach of the 20- and 50-day moving averages at $3,343.15 and $3,338.43 would leave the midpoint of the broader range at $3,311.51 vulnerable to a retest.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.213 (-0.54%)
5-Day Change: +$0.728 (+1.91%)
YTD Range: $28.565 - $39.517
52-Week Range: $26.524 - $39.517
Weighted Alpha: +42.49

Silver is under modest pressure, weighed by the retreat in gold and an uptick in the dollar. The white metal continues to outperform, with the gold/silver ratio keeping pressure on the lows for the year around 86. Another record high in copper is helping to keep silver underpinned.

The 14-year high set yesterday at $39.517 provides an intervening barrier ahead of the long-standing $40 objective. An eventual move above $40 would clear the way for an upside extension to the $41.610 Fibonacci objective.

China's National Energy Administration reported that the country added 14.36 GW of solar capacity in June, an 85% drop from the record high 93 GW of capacity added in May, and 38% lower than a year ago. While that headline may be troubling for the bull camp, China added solar capacity in H1 was 212.21 GW, +107% versus the same period last year.

While silver dipped below $39.000 intraday, the move attracted some buying interest, keeping Tuesday's low at $38.736 protected. Additional supports are noted at $38.092/000 and last week's low at $37.557. The 20-day moving average corresponds closely with the latter.


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.

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

U.S. calendar features Initial Jobless Claims, Chicago Fed National Activity Index, S&P Flash PMIs, New Home Sales.