Gold and silver poised for lower weekly close amid yield and dollar strength

OUTSIDE MARKET DEVELOPMENTS: At the UN General Assembly in New York this week, world leaders addressed global challenges under the theme of restoring trust and delivering for all, with major focus on ongoing conflicts. U.S. President Donald Trump and Iranian President Masoud Pezeshkian traded sharp rhetoric – Trump warning of potential “annihilation” of Iran without a deal, while Pezeshkian vowed defiance against bullying and openness to diplomacy without force.

On the sidelines, U.S. envoys and Iranian officials held mediated talks to try and find a path to end the war and reopen the Strait of Hormuz. While no breakthrough was reached, both sides have signaled willingness to keep channels open for ongoing negotiations.

Brent crude traded in a volatile pattern this week, initially dipping below $99 a barrel on hopes of diplomatic progress to reopen the Strait of Hormuz before rebounding back toward the $103–$105 range amid lingering Middle East supply disruptions and ongoing regional risks. Nonetheless, Brent appears on track for a second straight lower weekly close.

President Trump hosted Chinese leader Xi Jinping for a high-profile White House summit on Thursday that featured an elaborate ceremony and warm personal rhetoric but delivered limited concrete results beyond a short two-month extension of their existing trade truce to January 10. The leaders discussed AI, Taiwan (where Xi urged the US to oppose independence), trade imbalances, and other strategic issues including the Middle East, yet major disagreements persisted with no breakthroughs on core tensions.

This week’s Fed speakers largely struck a hawkish tone, emphasizing that persistent inflation – driven by strong demand, ongoing supply shocks from energy prices and geopolitics, and limited recent progress – likely requires further rate hikes beyond last week’s 25 bps increase. The overall message reinforced that policy remains insufficiently restrictive and that additional tightening may be needed, potentially involving economic trade-offs, to return inflation sustainably to the 2% target.

This week’s US economic data pointed to ongoing resilience amid a light calendar. Initial jobless claims fell to 197,000 (near multi-decade lows), new home sales rose 6.4% in August to a 684,000 annualized rate, and flash PMIs showed business activity accelerating to multi-year highs, while durable goods orders for August came in roughly flat and the final University of Michigan consumer sentiment reading reflected continued caution. Overall, the figures reinforced a solid labor market and steady demand even as inflation pressures and higher rates remained in focus.

U.S. Treasury Secretary Bessent held a conference call today with Japanese Finance Minister Satsuki Katayama. The two reaffirmed that the yen’s undervaluation remains a shared concern and exchanged views on financial market developments. They also confirmed their intention to strengthen bilateral cooperation, underscoring ongoing coordination to support a stronger yen. USD-JPY is off more than 1% today, putting the dollar index under modest pressure.

Markets next week will focus on a busy slate of U.S. economic data that could shape Fed rate expectations, including August PCE inflation (headline consensus 3.8% y/y), final Q2 GDP, ADP employment, ISM Manufacturing PMI, and Friday’s September jobs report (NFP consensus +100k). Attention will also stay on Middle East developments, oil prices, and any US-Iran progress.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$36.89 (+0.86%)
5-Day Change: -$77.35 (-1.77%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,734.87 - $5,595.02
Weighted Alpha: +7.41

Gold is modestly higher, but appears poised for a lower weekly close. Haven interest has been overwhelmed by hawkish FedSpeak that lifted yields and the dollar, weighing on the yellow metal.



Price action this week has been confined to last week's range, and key moving averages are converging. Important U.S. data releases next week could trigger a breakout. Given successive closes below the 20-, 50- and 100-day moving averages this week, last week's low at $4,235.99 and an important Fibonacci level at $4,232.32 look vulnerable.

A short-term breach of $4,235.99/32.32 would suggest potential for tests below $4,200. The next tier of Fibonacci support is found at $4,106.19.

Nonetheless, gold refuses to collapse, propped up by steady central-bank buying, persistent geopolitical tensions (including multiple wars), and a general distrust of fiat currencies. Additionally, much of the world is running elevated public debt and stubborn deficits amid rising interest costs, leaving increasingly limited room for fiscal maneuvering. There will be hard choices ahead.

The ancient store of value sits largely in the background, its resilience treated as background noise rather than the quiet signal of global unease. That has gold up nearly 9% from the summer low and 14% YoY.

I continue to watch the 50- and 100-day moving averages, which now provide resistance, and are bolstered by today's early U.S. high at $4,315.59. A close above those MAs would shift focus to the 20-day MA at 4350.87 and last week's high at $4,399.30. Above the latter, the 200-day MA at $4,544.11 would be in play.

SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.164 (+1.82%)
5-Day Change: -$1.477 (-2.23%)
YTD Range: $54.778 - $121.630
52-Week Range: $44.611 - $121.630
Weighted Alpha: +23.67

Silver is on track for a lower weekly close, as rising Fed hawkishness boosted yields and the dollar. However, the rising 50-day moving average continues to attract buying interest.



Like gold, the white metal is getting squeezed by converging moving averages. A short-term close below the 50-day MA would be a bearish signal, while a close above the 100-day is needed to embolden the bull camp.

On the downside, Thursday's low for the week at $63.087 protects the previous week's low at $62.331. Below that, if Fibonacci support at $61.015 gives way, tests back below $60 would have to be considered.

A short-term close above the 100-day MA at $65.888 is needed to return focus to recent highs at $67.328/529. The 9-Sep high at $68.329 must be cleared to call for tests above $70, but $80 must really be regained to return a measure of confidence to the long-term uptrend.

According to Goldman Sachs, global silver markets face a severe supply crunch with roughly five years of accessible reserves remaining at current depletion rates. This deficit is driven by surging industrial demand from the solar, electronics, and AI sectors that far outpaces growth in mining supply. The market will record a sixth consecutive year of structural supply deficit in 2026.
  
Goldman Sachs leads Wall Street's bullish outlook for silver, projecting a full-year average price target of $85 to $100 for this year, driven by macro-policy hedging and green infrastructure tailwinds. In comparison, Citi has a near-term target of $90 to $110 over a 6-to-12-month window, highlighting accelerating investment demand. J.P. Morgan has an opposing view, forecasting a drop to $63 in Q4 as short-term physical market tightness eases.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

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