Gold and silver are poised for consecutive lower weekly closes

Outside Market Developments: The dominant theme this week has been renewed US-Iran geopolitical tensions, which drove oil prices higher, revived inflation worries, and pressured risk assets. Renewed strikes and threats around the Strait of Hormuz stoked market volatility, deflated recent ceasefire optimism, and clouded the Fed’s rate outlook.

Tame inflation data from June somewhat tempered hawkish Fed expectations. Prospects for a hike at the July FOMC meeting fell to 10.2%, from 34.2% a week ago. Fed funds futures continue to suggest potential for at least one 25-bps rate hike before the end of the year.

Brent crude is up more than 10% this week and is poised to notch a second straight higher weekly close. While oil is holding below $90 thus far, the upside remains vulnerable. A climb above $90 would shift focus to the halfway back point of the May-June decline at $95.702.

Regional mediators – primarily Qatar and Pakistan – are still actively engaged in de-escalation efforts. Technical and indirect negotiations continue, focused on salvaging the June Memorandum of Understanding.  Optimism seems pretty low at this point, but formal diplomacy has not been completely abandoned.

Markets will remain focused on the trajectory of the US-Iran conflict, its impact on energy prices, and inflation expectations in the week ahead. Any further escalation, de-escalation signals, or mediator updates on the Strait of Hormuz will dominate sentiment and keep volatility elevated. Investors will also watch incoming U.S. economic data (housing starts, leading indicators) and corporate earnings for clues on growth and Fed policy, while monitoring tech/semiconductor rotation and broader risk appetite. 


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$14.60 (+0.37%)
5-Day Change: -$115.13 (-2.80%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,270.50 - $5,595.02
Weighted Alpha: +6.76

Gold reached a fresh two-week low in early U.S. trading before rebounding into the range. The yellow metal is on track for a second straight lower weekly close.



Escalating geopolitical tensions and this week's cooler-than-expected inflation prints provide some underpinning for gold. However, the rebound in oil, heightened inflation risks, a generally firm dollar, and Fed uncertainty provide an overwhelming headwind.

Scope remains for a short-term retest of the low for the year at $3,945.52 (30-Jun). A breach of this level would confirm potential for a downside extension to chart/Fibonacci support at $3,887.03/$3,886.02.

At this point. it would probably take a meaningful movement on peace talks to trigger a significant short-covering rally. The falling 20-day moving average at $4,071.62 is the initial resistance level I'm watching. A rebound and close above the 20-day would shift focus to $4,137.89 (9-Jul high) with potential to last week's high at $4,201.70.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.239 (-0.43%)
5-Day Change: -$4.269 (-7.15%)
YTD Range: $54.778 - $121.630
52-Week Range: $36.287 - $121.630
Weighted Alpha: +16.32

Silver slid to a new low for the year on Friday, below $55, amid heightened geopolitical risks and ongoing rotation out of tech/AI names. While profit taking lifted the white metal during U.S. trading, a second consecutive lower weekly close is on tap.



The fresh lows lend credence to the scenario that calls for a test of a pair of Fibonacci objectives at $53.695/340. Below that, the lower boundary of the bear channel comes in around $52.50.

Like gold, I'm watching the descending 20-day MA, which comes in at $59.295. Secondary resistances are found at $59.675 (13-Jul high), $60.762 (10-Jul high), and $63.267 (6-Jul high).


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.