Gold and silver consolidate ahead of tariff announcement

OUTSIDE MARKET DEVELOPMENTS: Markets are eagerly awaiting the latest tariff announcement from the White House. Reciprocal tariffs have been priced in, but President Trump is thought to be considering more sweeping levies that could further escalate trade tensions.

A delay of new tariffs or a more measured announcement, potentially stemming from concessions made by U.S. trading partners, could temper market uncertainty and boost risk appetite. Risk-off sentiment prevails ahead of the announcement, scheduled for 4:00 PM EDT today.

Russia is calling up 160,000 new conscripts to its military, raising the upper age threshold from 27 to 30. The implication is that Russia is anticipating that the war in Ukraine will continue.

Finland has announced that it will join other countries neighboring Russia and pull out of the Ottawa Convention that bans anti-personnel mines, suggesting heightened worries about Russian aggression. President Alexander Stubb said Finland would also boost defense spending over the next several years from 2.4% to 3.0% of GDP.

Meanwhile, China concluded two days of war games around Taiwan that included live-fire exercises. The 'Strait Thunder' war games coincided with U.S. Defense Secretary Pete Hegseth's first visit to the region.

MBA Mortgage Applications fell 1.6% in the 28-Mar week, weighed by both purchases and refis. The 30-year mortgage rate ticked down to 6.70%.

ADP Employment Survey showed private payrolls rose by 155k in March, above expectations of +110k, versus a revised +84k in February (was +77k). The beat implies modest upside risk for Friday's NFP report.

Factory Orders rose 0.6% in February, above expectations of +0.4%, versus a revised +1.8% in January (was +1.7%). The ex-trans increase was 0.4%. Inventories rose 0.4%.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$0.15 (0.0%)
5-Day Change: +$101.60 (+3.36%)
YTD Range: $2,607.16 - $3,147.41
52-Week Range: $2,268.72 - $3,147.41
Weighted Alpha: +38.05

Gold is consolidating within Tuesday's range ahead of President Trump's latest proclamation on tariffs. Having set a new all-time high just yesterday, the bias remains to the upside.  



Ongoing uncertainty on trade is clouding the picture for growth, inflation, and, by extension, Fed policy. Investors have been leaning into that uncertainty in favor of safe-haven assets such as gold and Treasuries.

Something beyond the reciprocal tariffs already signalled by Trump, such as sweeping 20% tariffs on most goods imported into the U.S., would be viewed as another step toward an all-out trade war. Many trading partners have already indicated they would deploy retaliatory measures if warranted.

A breach of chart/Fibonacci resistance at $3,147.41/$3,149.84 would shift focus to $3,200 initially. Further out targets at $3,300 and $3,500 would also gain credence.

Yesterday's higher high and lower close constitute a simple reversal day. Additional corrective action is a possibility given the overbought condition of the market and the outside chance that the White House sets forth a more measured approach to trade.

Keep an eye on closeby supports at $3,106.06/$3,105.29 and $3,100. Sendonday supports are defined by Monday's low at $3,078.93 and Friday's low at $3,054.50. The 20-day MA at $3,012.43 now stands in front of the more important $3,003.62/$3,000.00 zone.

Brace yourselves, things could get interesting this afternoon. Regardless of the tariff news, the dominant trend remains decisively bullish. Setbacks are likely to be viewed as buying opportunities.

Silver is trading higher for the first session in four, but remains confined to Tuesday's range, awaiting this afternoon's tariff announcement. The white metal continues to be underpinned by strength in gold and copper, rising rate cut expectations, and a generally soft dollar.



The U.S. imports a significant amount of silver from Mexico and Canada. Silver is largely a byproduct of copper mining.

Levies on silver, or copper for that matter, could impact both the supply and the demand side of the equation. If record-high copper prices are sustained, one might expect more will be mined, resulting in greater silver supply. At the same time, higher silver (and copper) prices will temper demand in some segments of the market.

The technical bias for silver remains to the upside in the wake of recent five-month highs. A breach of last week's peak at $34.543 would clear the way for a challenge of the multi-decade high at $34.853 that was set in October.

Initial chart support at $33.549/$33.521 is bolstered by the 20-day moving average at $33.490. A breach of the latter would leave the low from 21-Mar at $32.767 vulnerable to a test. Below that, the 50-day MA comes in at $32.423.


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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