Gold consolidates recent losses on heightened geopolitical risk

I'm writing today from the bourse floor at the CSNS show in Schaumburg, booth 1404. We've got coffee! Stop by for a cup.

OUTSIDE MARKET DEVELOPMENTS: Russia conducted a large missile and drone strike against the Ukrainian capital of Kyiv. The attack comes as the U.S. is trying to broker a peace deal, and prompted President Trump to demand that Putin "STOP."

“I am not happy with the Russian strikes on KYIV. Not necessary, and very bad timing. Vladimir, STOP! 5000 soldiers a week are dying. Lets get the Peace Deal DONE!” Trump wrote on TruthSocial.

The escalation of geopolitical tensions had a limited impact on risk appetite, with markets remaining optimistic about ongoing trade negotiations. Meanwhile, a dozen U.S. states have sued the Trump administration seeking a court order declaring that tariffs imposed under the International Emergency Economic Powers Act are illegal.

Durable Orders surged 9.2% in March, well above expectations of +2.0%, versus +0.9% in February. Ex-trans was unch on expectations of +0.3%, versus +0.7% in February.

Initial Jobless Claims rose 6k to 222k in the week ended 19-Apr, in line with expectations, versus 216k in the previous week. Continuing claims fell 37k to 1,841k.

Chicago Fed National Activity Index fell 0.27 points to -0.03 in March from 0.24 in February.

Existing Home Sales fell 5.59% to 4.02M in March, below expectations of 4.13M, versus 4.27M in February.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$40.91 (+1.24%)
5-Day Change: +$7.89 (+0.24%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,281.97 - $3,495.89
Weighted Alpha: +48.02

Gold is consolidating within yesterday's range, buoyed by heightened geopolitical tensions. Despite the sharp sell-off from $3,500 earlier in the week, the yellow metal is clinging to a weekly gain.



Today's Asian high at $3,362.22 protects the halfway back point of this week's decline at $3,380.72. Penetration of the latter would bode well for renewed tests above $3,400.

On the downside, the Asian low at  $3,288.35 stands in front of yesterday's low at $3,265.55. Fresh lows for the week would signal additional downside potential to the $3,200 zone.   

Silver is consolidating at the high end of yesterday's range. The white metal jumped to a three-week high of $33.655 on Wednesday, and the ability of silver to sustain gains above $33 is seen as encouraging to the bull camp.



With more than 78.6% of the entire decline off the late-March high at $34.543 now retraced, that level, both $34.543 and the 22-year high from October at $34.853, are considered in play. However, upside prospects remain very much contingent on ongoing progress on trade negotiations.

A retreat below $33 would put the bullish scenario back on pause, favoring a return to the 20- and 50-day moving averages around $32.00 would become likely.


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.