Gold and silver poised for second straight higher weekly closes

OUTSIDE MARKET DEVELOPMENTS: Retail sales unexpectedly fell 0.6% in July to $763.6 billion, the largest monthly decline since May 2025 and well below expectations of +0.1%, versus +0.2% in June. The drop was driven in part by weaker spending at online retailers and auto dealers after the boost from tax refunds faded, though sales remained 5.0% higher than a year earlier.

This may not be as bad as the headline print might suggest. The shift of Amazon’s Prime Day into June pulled forward a significant amount of online and discretionary spending, contributing to the sharp 2.2% drop in nonstore retail sales, helping drive the overall 0.6% decline in July. Lower gasoline prices further weighed on the headline figure by reducing receipts at gas stations, even as core categories showed some underlying softness.

The preliminary University of Michigan Consumer Sentiment Index for August fell sharply to 51.0 from 55.2 in July, well below expectations of 54.5 and ending two months of gains amid concerns over the cost of living tied to the Middle East conflict. Current economic conditions dropped to 51.8 and consumer expectations to 50.6, while one-year inflation expectations edged up to 4.3% from 4.2%.

Today's data misses, along with cooler year-over-year CPI and PPI in July, and soft July jobs data, signal heightened growth risks that are already prompting markets to scale back expectations of near-term Fed tightening. The probability of a September rate hike has eroded to 30.6%, down from 44.4% a week ago, and 50% a month ago.

U.S. Treasury yields are mixed on Friday, with short-dated yields falling (the 2-year briefly dipping below 4.10%, its lowest since late June), while the 10-year yield edged slightly higher around 4.65–4.66%. The dollar index remains defensive below 100, within striking distance of the seven-week low set last week at 99.40.

The United Arab Emirates accused Iran of attacking two of its state-owned oil company vessels in the Strait of Hormuz on Thursday, further disrupting already sharply reduced shipping traffic through the critical waterway amid stalled ceasefire talks. U.S. Defense Secretary Pete Hegseth stated that Washington can maintain its naval blockade of Iran indefinitely. 

Treasury Secretary Scott Bessent has outlined a plan for “economic isolation like the world has never seen before” against Iran, describing it as a two-pronged “one-two punch” that combines intensified financial pressure with the ongoing naval blockade of Iranian ports and the Strait of Hormuz. The financial component – framed as a shift to “Economic Fury” – involves targeting Iranian bank accounts, crypto wallets, and assets worldwide while cutting off payments to the regime’s leadership and government; full details of the new measures are expected to be announced next week.

Next week, markets will focus on the release of the July FOMC minutes for fresh clues on the Fed’s rate path, key U.S. housing and manufacturing data, and major retail earnings from companies such as Walmart and Target that will test the health of the consumer. Attention will also be on any new U.S. economic measures against Iran, along with ongoing developments in the Strait of Hormuz and their impact on oil prices.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$1.39 (-0.03%)
5-Day Change: +$34.73 (+0.80%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,311.66 - $5,595.02
Weighted Alpha: +20.95

Gold is recovering from overseas profit-taking and appears on track for a second consecutive higher weekly close after the recent upside breakout from the descending wedge chart pattern. The yellow metal continues to be buoyed by less-hawkish Fed bets that have created headwinds for yields and the dollar.



While gold continues to straddle the 100-day moving average, recent price action has been encouraging to the scenario that suggests the corrective low is in place and focus will return to the dominant uptrend. Gold is moving into a seasonally strong period, and we continue to see solid official sector demand.

In Q2 2026, central banks made net gold purchases of 289 tonnes (a record for a second quarter), according to the World Gold Council. The largest reported buyer was the National Bank of Poland, which added 51 tonnes, followed by the People’s Bank of China with 33 tonnes; other notable buyers included the central banks of Uzbekistan (+16t), Kazakhstan (+15t), Jordan (+6t), and the Czech Republic (+6t).

The Bank of Korea made its first gold-related investment in 13 years during Q2, acquiring 679,765 shares of the SPDR Gold Trust (GLD) worth about $250 million as of the end of June, according to a U.S. SEC filing. The central bank, which has held its physical gold reserves steady at around 104 tons since 2013, also recently announced plans to begin purchasing domestically produced gold to further diversify its foreign-exchange reserves and hedge against geopolitical and inflation risks.

Central banks remain firmly in buying mode, with a record 45% planning to add more gold over the next year and nearly 90% expecting global official holdings to keep rising. This reality lends further credence to the long-term uptrend.

The U.S. “Economic Fury” campaign of unprecedented financial isolation and a sustained Hormuz blockade would sharply escalate geopolitical and energy-market risks, reinforcing gold’s role as a crisis hedge and reserve diversifier. Central banks, already buying at elevated levels and citing geopolitical uncertainty as a key motive, would likely accelerate purchases to protect against sanctions spillover, oil-price volatility, and further erosion of confidence in traditional reserve assets that are clearly vulnerable to the long reach of the U.S. Treasury Department.

I'd like to see a close above the convergence of the 20- and 50-week moving averages at $4,387.47/$4,389.74 to bolster confidence in the short-term bullish scenario that targets the rising 200-day MA at $4,510.82. Beyond the latter, the 38.2% retracement level of this year's decline at $4,584.68 would be in play.

While today's overseas low at $4,311.40 was a new low for the week, we can now consider $4,313.86/$4,311.40 a solid short-term downside barrier. Secondary support is defined by the $4,230.25/$4,223.75 zone.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.171 (+0.27%)
5-Day Change: +$1.528 (+2.40%)
YTD Range: $54.778 - $121.630
52-Week Range: $36.976 - $121.630
Weighted Alpha: +44.74

Silver set a seven-week high on Wednesday, but upside momentum faded in the latter half of the week. Nonetheless, the white metal is poised for a second straight higher weekly close.



Signs of economic weakness perhaps tempered silver's benefit from less-hawkish Fed expectations this week. However, strong Q2 earnings in the tech/AI sector bode well for ongoing robust capex.

The four largest hyperscalers (Amazon, Alphabet, Microsoft, and Meta) collectively spent about $165 bln on capital expenditures in Q2 alone. These companies raised or reaffirmed full-year 2026 capex guidance to a combined roughly $730-$760 bln (up nearly 80% from 2025), with analysts expecting the aggressive infrastructure buildout to continue and potentially approach or exceed $1 trillion in 2027 as AI demand continues to outstrip available capacity.

This bodes well for a host of commodities like copper, aluminum, uranium, natural gas, and several other metals tied to power, electronics, and construction. That includes silver, although copper stands out as the clearest winner. Copper is just over 3% off the record high set last week at  680.73 and is on track for a fourth straight higher weekly close.

Silver really needs to get back above $80 to reinvigorate the bull camp. Key intervening barriers marked by the 100-day MA at $68.780 and 200-day MA at $71.874 are now protected by Wednesday's high at $66.782.

Friday’s overseas low at $63.522 protects the weekly low set Monday at $63.004. The converging 50- and 20-day moving averages will reinforce chart supports at $61.175 and $60.887 in the week ahead, providing a formidable downside barrier.


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.