Gold remains firm near $3,000, helping to underpin silver

OUTSIDE MARKET DEVELOPMENTS: The BoJ, BoE, SNB, Riksbank, Bank of Taiwan, Bank Indonesia, and the Fed will all announce policy. These policy decisions will be made under a cloud of rising uncertainty as global trade tensions stoke growth risks and worries about revived inflation.

The Fed is widely expected to remain on hold, so focus will be on changes to the economic projections. It seems likely that the 2025 growth projection from December of +2.1% will be nudged lower. Inflation expectations from December were +2.5% for both PCE and core PCE.

President Trump signed the six-month funding bill, averting a partial government shutdown. The bill made it to the President's desk after Congressional democrats chose not to mount a serious challenge to the GOP's agenda.

The OECD revised its 2025 global growth forecast to 3.1% from 3.3% in 2024. They trimmed the U.S. growth projection to 2.2% from 2.4%.

According to the OECD report, titled 'Steering through Uncertainty': "Inflationary pressures continue to linger in many economies. At the same time, policy uncertainty has been high and significant risks remain. Further fragmentation of the global economy is a key concern. Higher-than-expected inflation would prompt more restrictive monetary policy and could give rise to disruptive repricing in financial markets."

China has announced ambitious plans to “vigorously boost consumption.” The program will promote wage growth along with measures to free up disposable income.

“By connecting consumer spending to broader social goals like elderly care improvement, childcare support and work-life balance, the plan embeds consumption growth within China’s wider development objectives," according to Xinhua, the official state news agency of the PRC.

The German Parliament is slated to vote on the €500 bln defense and infrastructure spending plan this week. However, a last-minute legal challenge from the far-right threatens to derail – or at least slow – the necessary changes to the 'debt brake.'

NAHB Housing Market Index fell three points to 39 in March from 42 in February. It was the lowest reading since December 2023. “Builders continue to face elevated building material costs that are exacerbated by tariff issues, as well as other supply-side challenges that include labor and lot shortages,” said NAHB Chairman Buddy Hughes.

Retail Sales rose 0.2% in February, below expectations of +0.6%, versus a revised -1.2% in January (was -0.9%).  Ex-auto rose 0.3% on expectations of +0.4%, versus -0.6% in January (was -0.4%)

Empire State manufacturing index plunged 25.7 points to -20.0 in March, well below market expectations of -2.0, versus 5.7 in February. "Input prices increased at the fastest pace in more than two years, and selling price increases also continued to pick up. Optimism about the outlook waned considerably for a second consecutive month."

Business Inventories rebounded 0.3% in January, in line with expectations, versus -0.2% in December. The inventory/sales ratio rose to 1.37 after falling to a 31-month low of 1.35 in December. 


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$11.97 (+0.04%)
5-Day Change: +$108.53 (+3.76%)
YTD Range: $2,607.16 - $3,003.05
52-Week Range: $2,146.66 - $3,003.05
Weighted Alpha: +38.46

Gold remains well bid after setting fresh record highs above $3,000 on Friday. The yellow metal continues to be underpinned by haven flows and a soft dollar as markets look ahead to this week's Fed decision and economic projections.



Global gold ETFs saw net inflows of 32.7 tonnes last week, led by North American investors. It was the seventh straight weekly inflow and the second largest since the 27-Oct'23 week.

The COT report for last week showed net speculative long positions fell 7.2k to 236.1k contracts from 243.3k in the previous week. It was the fifth straight weekly decline in spec longs.

A breach of Friday's high at $3,003.05 would clear the way for a push to the next Fibonacci objective at $3,029.67. Beyond that, a measuring objective at $3,049.34 attracts.

Friday's low at $2,980.54 has been reinforced by today's London low at $2,982.85. Secondary supports are noted at $2,968.06/67.98 and $2,955.40.

Silver is trading modestly lower, but last week's five-month high above $34 keeps focus on the upside. The white metal continues to be underpinned by gold's strength, new Chinese stimulus, and hopes that the German Parliament will clear the way for massive defense and infrastructure spending.



Last week's COT report showed net speculative long positions jumped 6.2k to a 19-week high of 59.5k contracts, versus 53.3k in the previous week.

CFTC Silver speculative net positions

Penetration of Friday's high at $34.041 would bode well for a challenge of the more than 22-year high set last year at $34.853 (22-Oct). A minor intervening resistance is noted at $34.517 (30-Oct high).

Today's early New York low at $33.495 marks initial support and stands in front of the previous high for the year at $33.340. Secondary supports at $32.961 and $32.728 protect the rising 20-day moving average at $32.531.


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.