Gold and silver higher in thin holiday trade, awaiting Trump's return to the White House 

OUTSIDE MARKET DEVELOPMENTS: U.S. markets are closed today in observance of the Martin Luther King Jr. holiday. Today is also inauguration day.

This week, the market's focus will be on Donald Trump's return to the White House and his initial actions on the border, immigration, and trade. However, risk-on sentiment prevails.

Treasury Secretary Janet Yellen sent a letter to congressional leaders on Friday saying "extraordinary measures" will be deployed on Tuesday this week to prevent the debt ceiling from being reached. Trump has expressed interest in eliminating the debt ceiling. The national debt is currently a staggering $36.4 trillion.

The ceasefire between Israel and Hamas went into effect yesterday. The exchange of hostages and prisoners has begun.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$5.52 (+0.20%)
5-Day Change: +$44.60 (+1.67%)
YTD Range: $2,607.16 - $2,724.09
52-Week Range: $1,986.16 - $2,789.68
Weighted Alpha: +30.65

Gold is trading modestly higher in thin holiday trading. Liquidity will diminish after the London close but trading should be active when Tuesday's Asian session begins this afternoon and the market starts to digest the early hours of the Trump administration.


 
The yellow metal set a ten-week high at $2,724.09 on Friday. A more convincing breach of the previous high at $2,723.79 (12-Dec) would bode well for a test of the $2,736.55 Fibonacci level (78.6% retrace of the decline from  2,789.68 to $2,541.42). 

Global ETFs saw net inflows of 19 tonnes last week, led by strong interest from European investors (15.9 tonnes). It was the largest net inflow in 13 weeks.

The CFTC's COT report for the week ended 17-Jan revealed an increase of 24.5k to 279.4k contracts, versus  254.9k in the previous week. That's a 12-week high in net speculative long positioning.

The increase in investor interest bodes well for a challenge of the all-time and range high at $2,789.68.  Further out, there is a measuring objective at $2.936, and $3,000 remains attractive as well.

The overseas low at $2,690.08 marks initial support. Secondary support at $2,657.28/$2,656.10 protects the more important convergence of the 20-, 50-, and 100-day moving averages at  $2,6454.23/$2,644.58/$2,642.22.

Silver is trading higher in thin holiday trade, but action is confined to the lower half of Friday's range. The inability of silver to sustain gains above the 100-day moving average and regain $31 last week leaves the downside vulnerable.



Global growth risks remain the greatest headwind for industrial metals such as silver. A retreat below the 200-day moving average at $30.011 would leave the $28.802/783 double bottom vulnerable to a retest.

Last week's COT report showed net speculative long positioning rose 5.2k to an eight-week high of 46.1k contracts, versus 40.9k. It was the biggest jump in net spec longs since the week of 25-Oct'24.

CFTC Silver speculative net positions

Silver must regain $31 to set a more neutral near-term tone. Last week's high at $30.956 reinforced this level. Today's overseas high at $30.565 provides an additional intervening 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.