Gold remains range-bound awaiting Thursday's jobs report

OUTSIDE MARKET DEVELOPMENTS: The House is slated to begin considering the Senate version of the 1BBB today. “Yeah, I’m not happy with what the Senate did to our product, but we understand this is the process. It goes back and forth, and we’ll be working to get all of our members to ‘yes,’” said Speaker of the House Mike Johnson.

Given the size and scope of the legislation, there is still a fair amount of uncertainty about the longer-term fiscal implications. The bill includes a $5 trillion increase to the debt ceiling, and let's be honest, there's never been a debt ceiling that we haven't reached and exceeded.

The ADP Survey showed private payrolls unexpectedly contracted in June, weighed by losses in the services sector. It was the first negative print since March 2023 and the biggest drop since the pandemic.

The ADP miss creates some downside risk for tomorrow's NFP report and has prompted an uptick in rate cut expectations. Potential for a 25 bps rate cut at this month's FOMC meeting edged up to 24.3% from 20.7% yesterday.

Tariff concerns are ratcheting higher ahead of next week's trade-deal deadline. President Trump maintains he will not extend the deadline, and deals have not been reached with a number of key trading partners. 

President Trump says that Israel has agreed to the terms of a 60-day ceasefire, and urged Hamas to do the same. “I hope, for the good of the Middle East, that Hamas takes this Deal, because it will not get better — IT WILL ONLY GET WORSE,” he said via TruthSocial.

MBA Mortgage Applications rose 2.7% in the week ended 27-Jun, versus +1.1% in the previous week. The 30-year mortgage rate fell to a 12-week low of 6.79%.

Challenger Layoffs fell 45.8k to 48.0k in June, versus 93.8k in May.

ADP Jobs Survey dropped 33k in June, below expectations of +110k, versus a downwardly revised +29k in May (was +37k). 


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$5.91 (+0.18%)
5-Day Change: +$6.47 (+0.19%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,327.87 - $3,495.89
Weighted Alpha: +39.55

Gold is modestly higher, underpinned by trade and fiscal worries that are weighing on risk appetite. A firmer dollar is limiting the upside as the trade awaits tomorrow's jobs report.



An NFP miss could further boost rate cut expectations, providing some lift for gold heading into the holiday weekend. While a July cut still seems unlikely, an indication of weakness in the labor market would likely put September in play.

At this point, the yellow metal remains entrenched in the well-defined range. Recent price action has straddled the midpoint of that range. Trading since the record high was established in late April still appears to be a continuation pattern within the long-term uptrend.

A push back above the 20-day moving average at $3,348.89 would favor short-term tests above $3,400. A breach of the 16-Jun high at $3,449.13 is needed to clear the way for a run at new record highs.

On the downside, Monday's low at $3,256.02 reinforced the significance of support at $3,251.28 (29-May low). The rising 100-day moving average should reach the $3,200 zone next week and help keep the range low at $3,127.12 at bay.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.287 (+0.80%)
5-Day Change: +$0.120 (+0.33%)
YTD Range: $28.565 - $37.288
52-Week Range: $26.524 - $37.288
Weighted Alpha: +21.82

Silver is probing back above the 20-day moving average, although more serious tests of the upside are unlikely until the NFP report comes out tomorrow. Today's uptick in the dollar is seen as limiting upside potential.



A breach of last week's high $36.759 would clear the way for another run at the $37.288/430 zone. A breach of the latter would lend credence to the bullish scenario that targets the $38.750 Fibonacci objective, with potential to $40.

Today's overseas low at $35.918 bolsters Tuesday's low at $35.823, providing some protection for Monday's low at $35.610. The short-term range low at $35.369 is currently well protected.


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.