Gold and silver recover on profit-taking ahead of the weekend

OUTSIDE MARKET DEVELOPMENTS: This week, markets were choppy and indecisive amid elevated Treasury yields (the 10-year briefly hitting multi-decade highs near 5.36%), volatile oil prices driven by Middle East tensions and Iran-related supply risks, and shifting Fed rate-hike expectations. U.S. stocks saw mixed performance, with the S&P 500 and Nasdaq reaching or approaching record highs early on tech/AI strength before pulling back later in the week amid semiconductor weakness and inflation concerns tied to higher energy costs.

Iran ramped up attacks on commercial shipping in and around the Strait of Hormuz this week, with the highest weekly number of strikes on oil, LNG, and other tankers since the war began. These escalations drove Brent crude higher, pushing it briefly above $108 a barrel amid fears of tighter supply.

President Trump pledged that the U.S. will not launch attacks on Iran before the November midterm elections, citing ongoing “productive discussions” with Tehran aimed at ending the conflict. He added that Iran remains in poor economic and military condition while affirming that the U.S. blockade would stay in place. Trump maintained that record volumes of oil were moving through the strait, but that doesn't seem to be supported by the facts.

The University of Michigan’s preliminary October consumer sentiment index fell to 46.3 from 48.1 in September, marking a five-month low and below expectations of 47.6. The drop was driven by heightened frustration over the cost of living, with the current economic conditions subindex plunging to an all-time low of 44.7 and year-ahead inflation expectations rising to 4.7%.

Next week, markets will focus on the September CPI and PPI report due Wednesday and Thursday, respectively. These inflation readings will provide further clarity on Fed policy expectations for the remainder of the year amid ongoing concerns over elevated yields and sticky prices. Attention will also center on the kickoff of third-quarter earnings season, with major banks including JPMorgan, Goldman Sachs, Citigroup, and Wells Fargo reporting on Tuesday, alongside other data, including retail sales, later in the week.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$45.78 (+1.11%)
5-Day Change: +$42.13 (+1.02%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,887.03 - $5,595.02
Weighted Alpha: -1.28

Gold has rebounded from Wednesday's nine-week low to probe back above $4,200. The yellow metal appears poised for a higher weekly close, buoyed by profit-taking ahead of the weekend, although firm yields and a strong dollar continue to pose headwinds.

 

Last Friday's high at $4,225.02 remains intact thus far, keeping the declining 20- and 100-day moving averages at bay for now. A short-term close above the still rising 50-day MA at $4,335.05 is needed to re-embolden the bull camp and shift attention to the halfway-back point of the Aug-Oct decline at $4,381.69 and the 18-Sep high at $4,399.30.

Fox News notes that rapid expansion of AI is fueling a new wave of demand for gold, a metal essential in advanced semiconductors, high-performance servers, and data center infrastructure. Despite record-high gold prices early this year, tech companies are continuing to rely on the metal for its superior conductivity, reliability, and corrosion resistance rather than switching to cheaper alternatives. Because electronics manufacturing requires relatively small amounts of gold compared to the value of high-end AI components, the tech sector is largely price-insensitive, creating a sustained, non-traditional demand driver that reinforces a long-term bullish outlook for the precious metal alongside the ongoing AI boom.

As long as nearby resistances remain intact, further attacks on the downside can not be ruled out. A breach of today's Asian low at $4,131.14 would leave the lows from earlier in the week at $4,103.96 and $4,067.07 vulnerable to retests. As noted earlier in the week, a drop to the August low at $4,022.62 and perhaps as low as $4,000 may be needed to attract more sustained buying interest.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.039 (+1.76%)
5-Day Change: +$0.196 (+0.32%)
YTD Range: $54.778 - $121.630
52-Week Range: $45.563 - $121.630
Weighted Alpha: +6.24

Silver is recovering from Thursday's nine-week low, despite persistently high yields and a strong dollar. A close above $60.374 is needed to confirm a higher weekly close. Today's gains appear to be associated with position squaring ahead of the weekend and next week's key inflation data.



A rebound above the 20-, 50-, 100-day moving average complex is still needed to take pressure off the downside. Chart resistance at $62.021/079 provides a solid intervening barrier.

Clearance of the MAs is needed to shift focus to the late-September highs at $67.513/529 and the more important 9-Sep high at $68.314. An eventual breach of the latter is the key to unlock the $70 zone. Ultimately, $80 must be regained to revive confidence in the long-term uptrend.

Silver’s underlying fundamentals remain broadly favorable due to a projected sixth consecutive annual supply deficit of roughly 46-67 Moz in 2026, driven by inelastic mine production – where about 70% of output is a byproduct of mining other metals and thus slow to respond to higher prices. Persistent industrial demand from electronics, electric vehicles, AI data centers, and grid infrastructure continues to provide structural support, even as solar thrifting moderates one key end-use.

On the downside, Thursday's nine-week low at $58.516 now protects the $58.272 Fibonacci level. Below that, the late-July lows are noted at $56.681/583.


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.