12/10/2024
Gold sets two-week highs on Middle East tensions and easing expectations
OUTSIDE MARKET DEVELOPMENTS: Uncertainty prevails in Syria, where the HTS rebel group now controls the country after taking Damascus and ousting Bashar al-Assad over the weekend. HTS spun off from al Qaeda and is considered a terrorist group by the U.S. and UN.
It is unclear at this point if the removal of Assad calms the region or dials up the risk level. Israel is not taking any chances and has seized a buffer zone in the Golan Heights and launched airstrikes against Syrian military installations. The IDF seeks to deny the rebels–or any other group–access to weapons that could be used against Israel.
The Reserve Bank of Australia held steady on rates today, as was widely expected. However, the RBA board took on a decidedly more dovish tone, suggesting rate cuts could be in the offing early in the new year. The Aussie dollar fell in reaction.
The global bias remains toward easing, with rate cuts expected this week from the BoC, ECB, and SNB. The Fed is widely expected to trim rates again next week.
China's exports slowed significantly to a 6.7% annual pace in November, below expectations of +8.5% versus +12.7% in October. Imports fell 3.9%.
The bad news on the trade front comes a day after Chinese policymakers pledged additional stimulus measures. Trade and the broader Chinese economy will face further headwinds if the incoming Trump administration deploys threatened tariffs.
U.S. NFIB Small Business Optimism Index rose eight points to 101.7 in November, versus 93.7 in October.
“The election results signal a major shift in economic policy, leading to a surge in optimism among small business owners. Main Street also became more certain about future business conditions following the election, breaking a nearly three-year streak of record high uncertainty. Owners are particularly hopeful for tax and regulation policies that favor strong economic growth as well as relief from inflationary pressures. In addition, small business owners are eager to expand their operations.” – NFIB Chief Economist Bill Dunkelberg
U.S. Q3 Productivity was unrevised at 2.2%, versus 2.1% in Q2.
U.S. Q3 ULC was revised lower to 0.8%, versus a 1.9% advance print and -1.1% in Q2 (was +2.4%). This reduces labor costs as a source of inflation, further increasing the likelihood of a Fed rate cut next week.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$23.62 (+0.90%)
5-Day Change: +$35.05 (+1.33%)
YTD Range: $1,986.16 - $2,789.68
52-Week Range: $1,812.39 - $2,789.68
Weighted Alpha: +31.14
Gold extended to fresh two-week highs as heightened Middle East tensions centered on Syria continue to attract haven interest. Impending rate cuts from several key central banks continue to offer support as well.
Yesterday's breach of resistance at $2,650.65/$2,655.48 and the violation of the 50-day moving average favored a short-term test above $2700. This level is now within striking distance. More substantial resistance is well defined by the late-November highs at $2,714.94/$2,719.75.
If the bull camp musters a breach of $2,719.75 focus will initially shift to the $2,736.55 Fibonacci level, 78.6% retracement of the decline off the record high at $2,789.68. A minor chart point is noted at $2,748.72/87.
Despite this week's gains, the yellow metal is still range bound and I suspect that will continue into year-end. However, I believe the underlying trend is still decisively bullish and is likely to reestablish itself early in the new year.
Heraeus is thinking along the same lines, suggesting that gold's price range will be $2,450 to $2,950 in 2025. The company sees geopolitical tensions in Ukraine and the Middle East, and ongoing central bank interest as the major supporting factors.
Silver remains generally well bid, at the high end of yesterday's range. The white metal is being supported by strength in gold and some level of optimism about the latest Chinese stimulus pledges.
The weak trade numbers out of China initially weighed on silver, but perhaps they will steel the resolve of policymakers in Beijing. Heraeus notes that "global industrial demand for silver is on track to reach a record high of at least 700 moz this year." They are optimistic about 2025 as well.
Strong demand and a supply deficit bode well for the underlying uptrend. However, choppy consolidative action is likely to prevail into year-end.
The midpoint of the $34.853/$29.703 range is at $32.278, just above yesterday's high at $32.255. Penetration of this level would clear the way for an upside extension to $32.886, the 61.8% retracement level of the decline off the late-October peak. A measuring objective off the double bottom that was confirmed yesterday targets $33.194.
Today's intraday low at 31.728 corresponds closely with the 50-day moving average and should keep congestive chart support at $31.454/291 at bay.
now provides support. This level protects the more important $30.900/788 zone, where today's Asian low corresponds closely with the 20-day moving average.
Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
Tornado Precious Metals Solutions by Zaner
312-549-9986 Direct/Text
[email protected]
www.ZanerPreciousMetals.com
www.TornadoBullion.com
X: @GrantOnGold
X: @ZanerMetals
Facebook: @ZanerPreciousMetals
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.
12/9/2024
Gold firms on Middle East tensions, rate cut expectations, return of PBoC buying
OUTSIDE MARKET DEVELOPMENTS: Rebel forces in Syria seized the capital of Damascus, forcing President Bashar Assad to flee the country. Assad was granted asylum in Russia.
President Biden called Assad's ouster a “fundamental act of justice,” but warned it was also “a moment of risk and uncertainty.” The power vacuum created could lead to even greater turmoil in the region similar to what happened in Iraq and Libia.
Israel moved quickly to temporarily seize a buffer zone in the Golan Heights amid the heightened uncertainty. The IDF also struck chemical weapons sites and long-range rocket installations within Syria to prevent those weapons from falling into the wrong hands.
Chinese stocks and bonds rallied after policymakers signaled that more accommodations would be forthcoming to support the economy. The Politburo pledged to boost demand, and stabilize property and stock markets by pursuing "more proactive" fiscal policies, "moderately loose" monetary policy, and "extraordinary counter-cyclical policy adjustments."
In the wake of Friday's U.S. nonfarm payrolls report, the market is increasingly convinced that the Fed will continue its easing campaign when the FOMC meets next week. Payrolls modestly beat expectations, but the unemployment rate ticked up to 4.2%.
Fed funds futures currently reflect an 86% probability for a 25 bps rate cut at the last policy-setting meeting of the year. At this point, the market is leaning toward a hold in January.
The Fed's focus this week will be on U.S. CPI data for November. The market is expecting a headline increase of 0.2% m/m and +0.3% for core.
The global easing trend remains highlighted. The BoC is expected to deliver another 50 bps cut on Wednesday. The ECB and SNB are expected to cut rates by 25 bps on Thursday. The ECB may contemplate a larger cut amid weak growth and despite hotter inflation in November.
U.S. Wholesale Sales fell 0.1% in October, below expectations of +0.2%, versus a positive revised +0.5% in September (was +0.3%). Wholesale inventories rose 0.2%, versus -0.2% in September.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$23.62 (+0.90%)
5-Day Change: +$29.51 (+1.12%)
YTD Range: $1,986.16 - $2,789.68
52-Week Range: $1,812.39 - $2,789.68
Weighted Alpha: +30.45
Gold is up more than 1% to start the new week, buoyed by heightened geopolitical tensions in the Middle East, expectations of central bank rate cuts, and news that the PBoC bought gold in November. Despite today's gains, the yellow metal remains well within the well-defined $2,789.68/$2,541.42 that has dominated for more than three weeks.
The collapse of the Assad regime in Syria has stoked geopolitical risks in the region, prompting Israel to take preemptive actions. Expectations that a number of major central banks will move to ease policy over the next two weeks are providing additional lift to gold.
China's central bank resumed buying gold for reserves in November after a six-month hiatus. Official data showed an increase of 160,000 ounces in gold reserves.
"The resumption will send a signal that the PBoC has grown accustomed to these record high price levels and is prepared to build reserves regardless," Saxo Bank's Ole Hansen told Reuters.
The RMB price of gold was up 28% through November. The high price and ongoing economic uncertainty dented Chinese jewelry demand this year, but investment demand for bars, coins, and ETFs were offsetting forces.
Global ETF holdings fell 8.2 tonnes in the week ended 06-Dec. It was the first net decline in three weeks and all regions were sellers.
The COT report for last week showed net speculative long positions increased by 9.4k to 259.7k contracts, versus 250.3k in the previous week. The second consecutive weekly increase puts spec-long positioning at a five-week high.
CFTC Gold speculative net positions
The breach of chart resistance at $2,650.65/$2,655.48 and the probe above the 50-day moving average at $2,668.31 set a more favorable tone within the broader range. Scope is seen for short-term tests above $2,700, but the late-November highs at $2,714.94/$2,719.75 look well protected.
Former resistance at $2,655.48/$2,650.65 now marks initial support. This level protects more important supports at $2,631.10/$2,628.79 (20-day MA and today's overseas low) and the lows from the past two weeks at $2,617.65/$2,609.76.
More choppy range trading into year-end remains favored.
SILVER
OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$0.304 (+0.97%)
5-Day Change: +$1.590 (+5.21%)
YTD Range: $21.945 - $34.853
52-Week Range: $20.704 - $34.853
Weighted Alpha: +33.33
Silver surged more than 4% intraday to trade above $32 for the first time in four weeks. The white metal was lifted by pledges for more Chinese stimulus, heightened Middle East tensions, and an easier tone in the dollar.
Net speculative long positioning in silver futures rose 0.5k to 43.3k contracts last week, versus 42.8k in the previous week. While the rise was modest, it broke a string of five weeks of consecutive contractions in long positioning.
CFTC Silver speculative net positions
While silver could not sustain probes above $32, today's gains confirm the double bottom at $29.736/$29.703. The move back above the 50-day moving average lends additional confidence to a bullish scenario that favors a move into the upper half of the $34.853/$29.703 range.
The midpoint of that range is at $32.278. Penetration of this level would clear the way for an upside extension to $32.886, the 61.8% retracement level of the decline off the late-October peak. The measuring objective off the double bottom targets $33.194.
Former congestive resistance at $31.454/291 now provides support. This level protects the more important $30.900/788 zone, where today's Asian low corresponds closely with the 20-day moving average.
Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
Tornado Precious Metals Solutions by Zaner
312-549-9986 Direct/Text
[email protected]
www.ZanerPreciousMetals.com
www.TornadoBullion.com
X: @GrantOnGold
X: @ZanerMetals
Facebook: @ZanerPreciousMetals
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.
12/6/2024
Gold and silver shrug off jobs report to remain range-bound
OUTSIDE MARKET DEVELOPMENTS: U.S. nonfarm payrolls rose 227k in November, above expectations of +215k, versus a revised +36k in October (was +12k). The unemployment rate ticked up to 4.2%.
Hourly earnings rose 0.4% on expectations of +0.3%, versus +0.4% in October. The average workweek was 34.3 hours, versus a revised 34.2 hours in October.
While the labor market has recovered from hurricane-related distortions and the Boeing strike in October, the trend since Q1 reinforces the perception that the jobs market is cooling.
That concern is reflected in the jump in December rate cut expectations to near 90%. That's up from 71% yesterday and 66% a week ago.
Treasuries rallied and the dollar index slipped to a three-week low. Stocks firmed, although risk appetite remains broadly neutral.
Fed Governor Bowman (centrist-hawk) worries that cutting rates too quickly could revive inflation. “I would prefer that we proceed cautiously and gradually in lowering the policy rate, as inflation remains elevated,” she said.
U.S. Michigan Sentiment (prelim) rose 2.2 points to a seven-month high of 74.0 in December, above expectations of 73.3, versus 71.8 in November. Current conditions surged 21.6% to 77.7, while expectations moderated to 71.6. Year-ahead inflation expectations rose to a six-month high of 2.9% from 2.6% last month. Long-run inflation expectations ticked down from 3.1%, versus 3.2% in November.
U.S. Consumer Credit for October comes out later today. Median expectations are $10 bln.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$5.96 (+0.23%)
5-Day Change: -$14.35 (-0.54%)
YTD Range: $1,986.16 - $2,789.68
52-Week Range: $1,812.39 - $2,789.68
Weighted Alpha: +29.34
Gold eked out a new low for the week in Asian trade, but the tone remains consolidative with little response to today's U.S. jobs data. The yellow metal needs to close above $2,650.59 to avoid a second straight lower weekly close. That seems unlikely as of this writing.
Last week's low at $2,609.76 remains protected with the new intervening barrier marked by today's earlier low at $2,617.65. With price action still confined to the lower half of last week's range, the short to near-term bias remains consolidative.
A breach of $2,609.76 early next week would shift attention to the rising 20-week moving average at $2,595.23 and the 100-day moving average at $2,583.31.
On the upside, initial resistance is well-defined by this week's series of highs at $2,650.65/$2,655.48. This zone provides a formidable barrier ahead of last Friday's high at $2,665.16 and the 50-day moving average at $2,667.78.
Gold-backed ETFs saw net outflows of 28.6 tonnes in November led by selling in Europe. It was the first global net monthly outflow since April as gold corrected from October's record high on soaring risk appetite in the wake of the U.S. election outcome.
North American investors continued to be net buyers in November, notching a fifth consecutive month of inflows, albeit a scant 0.8 tonnes. The World Gold Council suggested it was largely the result of Canadian buying.
Silver edged to a new high for the week in Asian trading before falling back into the range, leaving resistance at $31.465 (19-Nov high) protected. An outside day is evident, but the white metal still appears poised for a higher weekly close as range trading continues.
A breach of $31.465 was needed to allow for a challenge of the more important $31.691/709 level (Fibonacci/50-day MA). Penetration of the latter would favor renewed probes above $32.
A retreat below the 20-day moving average at $30.737 would leave chart support at $30.509/485 vulnerable to a challenge. Below the latter, the lows at $29.736/$29.703 would be back in play.
Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
Tornado Precious Metals Solutions by Zaner
312-549-9986 Direct/Text
[email protected]
www.ZanerPreciousMetals.com
www.TornadoBullion.com
X: @GrantOnGold
X: @ZanerMetals
Facebook: @ZanerPreciousMetals
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.
12/5/2024
Gold and silver remain generally consolidative ahead of tomorrow's NFP report
OUTSIDE MARKET DEVELOPMENTS: While South Korea's period of martial law was short-lived, the repercussions are still being felt. Calls for President Yoon Suk Yeol to resign continue to echo even as lawmakers prepare for impeachment amid rumblings of treason charges.
The Korean won has rebounded somewhat after plunging to a more than a two-year low against the dollar on Tuesday. Korean stocks remain under pressure due to the ongoing political instability.
Finance Minister Choi Sang-mok attempted to reassure investors by pledging to do whatever was necessary to stabilize financial markets and the currency. That included a vow to provide "unlimited liquidity" if necessary.
French President Macron will address the nation this evening presumably to address the political turmoil stemming from the collapse of the government. Prime Minister Barnier resigned following Wednesday's vote of no confidence. His three-month tenure as PM was the shortest in modern history.
Bitcoin extended gains after topping $100,000 on Wednesday. The cryptocurrency is being boosted by President-elect Trump's promises of a lighter regulatory approach and a pledge to make America “the crypto capital of the planet.” Trump also tapped crypto-friendly Paul Atkins to be the next chairman of the SEC.
Meanwhile, Fed Chairman Powell said the central bank's role in regulating cryptocurrencies is limited. He also made some comments about Bitcoin that may have stoked the legitimacy of the asset (see the gold comment below).
Powell expressed some optimism about the U.S. economy, stating it's in "remarkably good shape." This allows the Fed to be "a little more cautious" moving forward.
The Fed's Beige Book showed economic activity "rose slightly" in most districts, providing some backing for Powell's statement. According to the report, "expectations for growth rose moderately across most geographies and sectors. Business contacts expressed optimism that demand will rise in coming months."
Fed funds futures continue to reflect a 70%+ probability of a 25 bps rate cut this month, while the likelihood of a January hold is currently 58.9%. Incoming data and the policies enacted by the incoming Trump administration will impact the policy path in the new year.
ECB President Christine Lagarde told the European Parliament that the central bank would continue with rate cuts. A 25 bps cut is widely expected next week, although a more aggressive 50 bps cut will likely be considered.
U.S. Challenger Layoffs rose 2.1k to 57.7k in November, versus 55.6k in October. “November saw downstream cuts to Automotive suppliers and parts manufacturers, as well as ongoing cuts in Consumer and Industrial Manufacturing. Technology also saw a high number of layoff announcements, as that sector continues to undergo significant changes,” according to Andrew Challenger.
U.S. Initial Jobless Claims rose 9k to 224k in the week ended 30-Nov, above expectations of 215k, versus a revised 215k in the previous week. Continuing jobless claims gell 25k to 1,871k in the 23-Nov week from 1,896k in the previous week.
U.S. Trade Deficit narrowed 11.9% to -$73.8 bln in October, inside expectations of -$75.2 bln, versus a revised -$83.8 bln in September.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$5.05 (+0.19%)
5-Day Change: +$9.39 (+0.34%)
YTD Range: $1,986.16 - $2,789.68
52-Week Range: $1,812.39 - $2,789.68
Weighted Alpha: +30.07
Gold continues to trade in a consolidative manner in the lower half of last week's range. Upticks above $2,650.00 have once again attracted selling interest even though the dollar is trading lower today.
This week's highs at $2,650.65/$2,655.48 have turned into a formidable barrier ahead of last Friday's high at $2,665.16 and the 50-day moving average at $2,668.12.
Upticks since the 25-Nov drop have lacked momentum, suggesting that another run at the downside may be in the offing, although I don't expect the market to press the issue ahead of tomorrow's payrolls report.
Fresh weekly lows below $2,623.31 would clear the way for a retest of last week's low at $2,609.76. Below the latter, the 100-day moving average at $2,580.90 would attract.
Fed Chairman Powell speaking at the DealBook Summit in New York said Bitcoin is "just like gold, only it’s virtual, it’s digital. People are not using it as a form of payment or as a store of value. It’s highly volatile. It’s not a competitor for the dollar, it’s really a competitor for gold.”
However, he also said, “People use Bitcoin as a speculative asset.” That's clearly true, but he loses me when he makes the comparative statement about gold and Bitcoin.
First, gold is substantially less volatile than Bitcoin, and even less so than stocks. Second, I don't think most people see gold as a speculative asset, but rather as a hedge and a complimentary asset within a well-diversified portfolio.
That being said, I do think Powell inadvertently bestowed some legitimacy on Bitcoin by comparing it to an asset with over 4,000 years of history. That could pull some investment demand away from gold.
However, I think many of the new investors rushing into crypto will be equally quick to rush to the exits if Bitcoin's legendary volatility rears its ugly head again. You may recall that on March 12, 2020, Bitcoin plunged nearly 40% in a single day, from $7,935 to $4,826. On that same day, gold fell just 3.5% during a bout of pandemic-related deleveraging.
SILVER
OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$0.052 (+0.17%)
5-Day Change: +$1.067 (+3.53%)
YTD Range: $21.945 - $34.853
52-Week Range: $20.704 - $34.853
Weighted Alpha: +32.40
Silver is consolidating at the upper end of yesterday's range after failing to clear resistance marked by the 19-Nov high at $31.465. Today's weakness in gold is likely limiting the upside in the white metal and preventing confirmation of the potential double bottom at $29.736/$29.703.
While silver set a two-week high on Wednesday, buoyed by more favorable global growth prospects, further gains are needed to restore confidence in the longer-term uptrend. A breach of $31.465 would highlight $31.691/709(Fibonacci/50-day MA) initially and set up renewed probes above $32.
A retreat below the downtrending 20-day moving average at $30.740 would leave chart support at $30.509/485 vulnerable to a challenge. Below the latter, the lows at $29.736/$29.703 would be back in play.
Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
Tornado Precious Metals Solutions by Zaner
312-549-9986 Direct/Text
[email protected]
www.ZanerPreciousMetals.com
www.TornadoBullion.com
X: @GrantOnGold
X: @ZanerMetals
Facebook: @ZanerPreciousMetals
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 mostly lower in early U.S. trading.
U.S. calendar features Challenger Layoffs, Trade: Goods & Services, Initial Jobless Claims, FedSpeak from Barkin.
12/4/2024
Gold remains range-bound as silver firms on economic optimism
OUTSIDE MARKET DEVELOPMENTS: Political turmoil continues in South Korea after President Yoon Suk Yeol imposed martial law on Tuesday, but quickly rescinded the order after intense pressure from Parliament. Opposition lawmakers are now calling for Yoon to resign or face impeachment.
The French government is on the verge of collapse, with grim implications for the economically struggling EU. PM Barnier is expected to face a vote of no confidence as soon as today. President Macron is also in jeopardy after his call for a snap election last summer set the stage for the current political upheaval.
Fighting in Syria has intensified as government forces counterattack against opposition forces that took the second-largest city of Aleppo last week. Russian warplanes are reportedly flying in support of President Bashar al-Assad forces. Iran has said it would send troops to Syria if asked.
Iranian-backed fighters fired upon U.S. troops operating in eastern Syria. The U.S. military struck back against those attackers. While unrelated to what's happening around Aleppo, U.S. forces are in harm's way and create the potential for escalation.
President-elect Trump has also told Hamas that there will be "all hell to pay" if the remaining hostages are not released by inauguration day. This suggests the potential for greater U.S. involvement in Israel's war against the terrorist group.
The latest OECD economic outlook highlighted the resilience of the global economy despite a fair amount of uncertainty this year. Global GDP growth is projected to strengthen slightly to 3.3% in 2025 and remain stable at this level through 2026.
Today's U.S. economic data misses, particularly in services ISM bolstered confidence that the Fed will cut rates by an additional 25 bps this month. FedSpeak from Barkin and Musalem towed the cautious, data-dependent line. Fed Chairman Powell speaks this afternoon.
U.S. ADP Employment Survey showed private payrolls growth of 146k in November, below expectations of +165k, versus a negatively revised +184k in October (was +233k). "Manufacturing was the weakest we've seen since spring. Financial services and leisure and hospitality were also soft,” said Nela Richardson, ADP's chief economist.
U.S. S&P Global Services PMI was adjusted lower to 56.1 in November, versus a flash print of 57.0 and 55.0 in October. "Companies have reported stronger demand for services thanks to the clearing of political uncertainty following the election, as well as brighter prospects for the economy in 2025 linked to the incoming administration and hopes for lower interest rates," said Chris Williamson, Chief Business Economist at S&P Global.
U.S. Services ISM fell 3.9 points to a three-month low of 52.1 in November, below expectations of 55.6, versus 56.0 in October. Weakness in the data was broad-based.
U.S. Factory Orders rose 0.2% in October, below expectations of +0.3%, versus a positive revised -0.2% in September (was -0.5%). Inventories fell 0.1%, versus a revised -0.3% in September.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$0.27 (+0.01%)
5-Day Change: +$14.46 (+0.55%)
YTD Range: $1,986.16 - $2,789.68
52-Week Range: $1,812.39 - $2,789.68
Weighted Alpha: +30.29
Gold remains generally consolidative in the lower half of last week's range. The yellow metal edged to a new high for this week on support from an uptick in rate cut expectations, a softer dollar, and heightened political and geopolitical tensions.
Scope is seen for a test of Friday's high at $2,665.16. Above that, the 50-day moving average at $2,669.08 resists. Penetration of the latter would favor renewed tests above $2,700.
Barring significant escalation on any of the geopolitical/political fronts, last week's high at $2,719.75 is a formidable short-term barrier. Choppy consolidative trading remains favored within the well-established $2,789.68/$2,541.42 range.
The bull camp is being encouraged by ongoing central bank gold demand. The World Gold Council reports 60 tonnes of net official sector buying in October, the highest monthly total of the year thus far.
Perhaps not surprisingly, gold reached a record high in October. India, Turkey, and Poland were the biggest buyers.
"While rising gold prices appear to have inhibited some buying and prompted tactical sales over recent months, October's rebound in reported activity signals continued interest from central banks to accumulate gold within their reserve portfolios," according to the WGC.
On the downside, the 20-day moving average has been attracting some buying interest over the past two sessions, keeping Monday's low at $2,623.31 at bay. More substantial support is marked by last week's low at $2,609.76.
Silver jumped to a new high for the week stoked in part by OECD economic optimism. The white metal has pressured the highs of the previous three weeks at $31.417/465/503.
A push through this important resistance zone would confirm the potential double-bottom at $29.736/$29.703. Such a move would target $31.691/726 initially, where the 38.2% retracement level of the decline off the October high corresponds with the 50-day moving average.
A retreat below the 20-day moving average at $30.781 would leave today's overseas low at $30.509 and yesterday's low at $30.485 vulnerable to tests. Below the latter, the lows at $29.736/$29.703 would be back in play.
Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
Tornado Precious Metals Solutions by Zaner
312-549-9986 Direct/Text
[email protected]
www.ZanerPreciousMetals.com
www.TornadoBullion.com
X: @GrantOnGold
X: @ZanerMetals
Facebook: @ZanerPreciousMetals
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.