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

U.S. calendar features EIA Data, FOMC Minutes, FedSpeak due from Waller.

(Reuters) - Gold prices extended losses on Tuesday, pressured as the U.S. dollar and Treasury yields strengthened on rising bets for higher interest rates, while markets awaited to see if lawmakers could avoid a debt ceiling default.

Spot gold fell 0.5% to $1,958.96 per ounce by 1123 GMT while U.S. gold futures were down 0.9% to $1,959.60...[LINK]

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

U.S. calendar features PMIs, New Home Sales, Richmond Fed Index, M2.

Gold tumbled back below $2000 last week, weighed by a second consecutive higher weekly close in the dollar. The greenback has been buoyed by stronger-than-expected U.S. economic data, which leaves some potential that the Fed will hike rates again in June.

Spot Gold Daily Chart through 5/22/2023

Fed Chairman Powell indicated last week that the ongoing banking crisis may prompt banks to curtail lending, slowing the economy.

"Our policy rate may not need to rise as much as it would have otherwise to achieve our goals."

Fed Chairman Jerome Powell

Fed funds futures put the probability of a 25 bps rate hike in June at 25.7%. That’s up from 20.1% last week, and 23.4% a month ago.

Treasury Secretary Janet Yellen told banking sector CEOs last week that additional mergers may be necessary. This suggests that Yellen doesn’t believe the crisis is over.

The Fed reported that commercial bank deposits dropped to $17.1 trillion in the week ended May 10. It was the fourth consecutive weekly outflow. Commercial banks have lost nearly $1 trillion in deposits in just over a year.

Yellen also reiterated to those same bank CEOs that failure to reach a deal on the debt ceiling would be “catastrophic” for the financial system, families, and businesses. The latest round of talks between President Biden and House Majority Leader McCarthy ended on Monday without a deal being struck.

Yellen has indicated that the U.S. could fail to meet debt obligations as soon as June 1. If the U.S. were to default, the repercussions would be far-reaching. “No corner of the global economy will be spared,” said Mark Zandi, chief economist at Moody’s Analytics.

According to Moody’s, if the default were to extend “well into the summer,” the unemployment rate could more than double to 8%. Rates would soar, and the stock market would plunge.

In such an event, gold would likely drop initially as a result of broad-based deleveraging. However, investors looking for a safe haven would eventually step in as buyers.

A rebound above $2009.39 would ease short-term pressure on the downside and return a measure of credence to the underlying uptrend. Such a move would return focus to the recent high at $2066.73 and the all-time high at $2075.28.

Silver

Silver remains defensive as a result of mounting growth risks and lingering uncertainty as to the Fed’s next move.

Spot Silver Daily Chart through 5/22/2023

Silver reached a 7-week low at $23.33 before rebounding somewhat and ending the week with a loss of only 0.55% last week. It was the second consecutive lower weekly close.

ETF outflows totaled 2.02 Moz last week.

A U.S. default would have devastating implications for U.S. consumers, sapping demand for electronics, cars, and solar panels. All are big sources of demand for silver.

On the other hand, a recession and significant job losses would almost assuredly have the Fed contemplating rate cuts later this year. A reversal of the tightening cycle could make any recession relatively short in length and I would expect silver’s longer-term bullish fundamentals to kick back in at that point.

The 100-day SMA is holding on a close basis thus far. Secondary support is noted at $23.02 (50% retracement of the rally from $19.90 to $26.14).

However, a rise back above $24.73 is needed to shift the technical bias back to the upside, putting the recent highs at $26.09/14 back in play.

PGMs

Platinum continues to hold comfortably above the $1000 level. The short-term tone has turned consolidative just below the midpoint of the $1038.68/$1143.25 range.

Spot Platinum Daily Chart through 5/22/2023

A stronger dollar and growth risks have put the rally off the February low on pause, but platinum is holding up better than silver and palladium.

Palladium has turned consolidative just above the nearly 4-year low at $1329.18.

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 FedSpeak from Bullard, Daly, & Bostic.

Canadian markets closed in observance of Victoria Day.

May 19 (Reuters) - Gold prices advanced on Friday, tracking a pullback in the dollar, but increased optimism around a U.S. debt limit deal set prices on track for a weekly drop.

Spot gold rose 0.3% to $1,964.09 per ounce by 1110 GMT, after hitting its lowest since early April on Thursday...[LINK]

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

U.S. calendar features FedSpeak from Williams, Bowman, Powell, & former chair Bernanke.

With a minimal higher high for the move in the dollar overnight, combined with residual hope of ongoing US debt ceiling negotiations, the bear camp in gold has the initial edge.

Apparently, the gold trade sees an ultimate solution to the US debt ceiling battle with the odds favoring an increase in the debt ceiling and little if any work on the deficit.

Furthermore, gold ETF holdings yesterday declined again this time by 68,837 ounces leaving the year-to-date gain at only 0.2%...[MORE]

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May 18 (Reuters) - The price of gold slipped on Thursday as signs that a deal to raise the U.S. debt ceiling could be reached in Washington reduced its safe haven appeal. Fading expectations for early U.S. rate cuts also took the shine off non-yielding bullion.

Spot gold fell 0.3% to $1,976.09 per ounce by 1106 GMT, earlier going as low as $1,971.99, its lowest since April 21...[LINK]