Gold and silver lower with focus on jobs data in the holiday-shortened week

OUTSIDE MARKET DEVELOPMENTS: Middle East tensions flared over the weekend, testing the fragile US-Iran ceasefire/MoU signed just weeks ago. Iran attacked commercial vessels in or near the Strait of Hormuz as well as US-related targets in Bahrain and Kuwait. The U.S. conducted retaliatory airstrikes targeting missile/drone storage sites, coastal radar, air defenses, and military infrastructure near the Strait and on Qeshm Island.

Amid the weekend strikes, President Trump warned that if Iran doesn’t comply with the ceasefire and deal terms, “there may come a point when we are no longer able to be reasonable, and will be forced to militarily complete the job that we very successfully started.” On Sunday, both sides agreed to halt further attacks and resume talks, which have moved from Switzerland to Qatar, on Tuesday.

Israel continued limited strikes on Hezbollah targets in southern Lebanon. The IDF stated the actions were in response to threats from Hezbollah operatives. A US-brokered framework deal between Israel and Lebanon faces rejection from Hezbollah.

Israel has made clear it will not fully withdraw from its security/buffer zone in southern Lebanon until Hezbollah is significantly degraded or disarmed. Continued activity complicates US-Iran peace talks and strains Lebanon’s fragile government and economy.

This week's focus will be on U.S. jobs data. The June nonfarm payrolls report comes out on Thursday. The market is expecting jobs growth of +110k and steady unemployment at 4.3%.

Evidence of ongoing resilience in the U.S. labor market will fortify higher-for-longer Fed expectations, underpinning yields and the dollar. A significant payrolls miss could prompt the trade to start pricing out the probability of a rate hike before year-end.

Housing market data is also on tap this week. Activity has been sluggish this year, with elevated mortgage rates continuing to weigh on affordability and demand.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$35.06 (-0.86%)
5-Day Change: -$146.19 (-3.49%)
YTD Range: $3,960.16 - $5,595.02
52-Week Range: $3,256.02 - $5,595.02
Weighted Alpha: +9.32

Gold starts the week on its back foot amid tempered market reaction to weekend hostilities in the Middle East and news that peace talks will continue this week. Market activity remains contained within the range that was established last Wednesday.  



With the yellow metal well below the major moving averages and new 13-month lows last week, the downside remains vulnerable. Cyclical pressure, diminished geopolitical and inflation risks, and a firm dollar continue to push investors to the sidelines.

Global ETFs saw net outflows of 38.3 tonnes last week. It was the biggest outflow since the 30-Sep'22 week.


Scope is seen for further tests below $4,000. Minor chart supports at $3983.74 and $3,964.23 protect the low for the year at $3,960.16. Penetration of the latter would lend credence to the bearish scenario that suggests potential to a pair of Fibonacci levels at $3,887.03/86.02.

A rebound above $4,114.73 (24-Jun high) would ease pressure on the downside somewhat, favoring further corrective gains toward the declining 20-day moving average at $4,225.13. More important resistance marked by the mid-June high at $4,381.78 and the 50- and 200-day MA's above $4,400 look to be well protected.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$1.133 (-1.92%)
5-Day Change: -$6.587 (-10.12%)
YTD Range: $55.666 - $121.630
52-Week Range: $35.610 - $121.630
Weighted Alpha: +29.19

Silver is consolidating recent losses below $60. The downside remains vulnerable in the face of higher-for-longer Fed expectations, a firm dollar, and the most recent rise in bearish tech/AI sentiment.

 

Short-term support is well defined by the recent low at $55.666/527. A breach of this level would clear the way for a downside extension to the Fibonacci retracement levels at $53.695 and $53.340.

On the upside, last Wednesday's high at $62.350 is protected by the previous lows at $61.036/533. Additional resistances are marked by the declining 20-day MA at $65.948, last week's high at $67.023, and the still rising 200-day MA at $69.929.

While silver has fallen more than 50% from the $121.630 record high that was set in late January, the realities of supply and demand remain structurally bullish for the long term. Persistent global supply deficits, combined with surging industrial demand from solar energy, electric vehicles, AI data centers, and electronics, are expected to lead to an eventual resumption of the bull trend.


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.