Gold spent the week within the range, silver firms, but still appears poised for a lower weekly close

OUTSIDE MARKET DEVELOPMENTS: Market attention this week continued to be focused on tariff developments and geopolitical risks. However, economic and earnings data reveal a resilient U.S. economy with inflation in check, keeping market sentiment tilted toward risk-on.

On the heels of yesterday's retail sales beat for June, the preliminary read on consumer sentiment in July reached a five-month high of 61.8. Five-year inflation expectations hit a five-month low of 3.6% as tariff worries continue to moderate.

Estimates for Q2 GDP are mostly above 2%. The Atlanta Fed's GDP model currently projects 2.4%. However, some economists believe the massive Q1 net export subtraction associated with tariff front-running was reversed out in Q2, resulting in growth north of 4%. The BEA announces the Q2 advance report on July 30.

Fed Governor Waller continues to advocate for a July rate cut, although the market puts the prospect at just 4.7%. Waller was appointed by President Trump late in Trump's first term and is in the mix as a potential replacement for Jerome Powell as chair.

The market still sees October's FOMC meeting as the most likely timing for resumption of Fed easing. However, a 4% advance Q2 GDP print in a couple of weeks could certainly take September and October rate cuts off the table ... perhaps December too.

Housing Starts rose 0.058M to a 1.321M pace in June, above expectations of 1.300M, versus a revised 1.263M in May (was 1.256M). Permits rose to 1.397M from 1.394M. Completions fell to 1.314M from 1.540M.

Michigan Sentiment (Prelim) rose 1.1 points to a five-month high of 61.8 in July, above expectations of 61.5, versus 60.7 in June.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$12.00 (+0.36%)
5-Day Change: +$2.12 (+0.06%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,354.48 - $3,495.89
Weighted Alpha: +39.15

Gold heads into the weekend on an upbeat note, with help from a setback in the dollar. However, the yellow metal remains well contained within the narrowing range, and a close below $3,355.86 would notch the first lower weekly close in three.



The yellow metal is above the $3,311.51 midpoint of the broader range, and near the midpoint of the range-within-the-range at $3,352.57. Probes below the 20- and 50-day moving averages this week have attracted buying interest, preventing a retreat below $3,300.

More important supports are well defined at $3,284.61 (9-Jul low) and $3,256.02 (30-Jun low). The 100-day MA is at $3,231.98 and should rise to bolster the latter next week. The rising 20-week MA is at $3,238.19 and moving into this area, further fortifying the downside.

I still see risk for another run at the downside. I noted earlier in the week that gold ETF inflows slowed significantly last week as prices stagnated. As that stagnation continues, there may have been outflows this week as investors redeployed capital to more productive assets.

While gold has consolidated since mid-May, it's only about 5% off the record high set in April. Gold is less than 3% off its record high against the Indian rupee, which continues to weigh on jewelry demand.

Indian gold imports fell 40% YoY in June to a more than two-year low of 21 tonnes. India's gold imports in the first half of 2025 were also down 30% year-on-year at 204.1 tonnes, the lowest since H1'20, during the pandemic.

A breach of Monday's high at $3,374.11 is needed to mitigate the downside risk and clear the way for renewed tests above $3,400. Such a move would favor a retest of the 16-Jun high at $3,449.14. Above that, the record high at $3,500 would be back in play.

SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.193 (+0.51%)
5-Day Change: -$0.117 (-0.30%)
YTD Range: $28.565 - $39.119
52-Week Range: $26.524 - $39.119
Weighted Alpha: +35.99

Silver is trading higher for a third straight session but still appears on track for its first lower weekly close in three after Monday's rejection from above $39. Signs this week of a robust economy have sparked a bid in the industrial metals, with copper reaching a new high for the week. A softer dollar is helping the cause.



While Indian gold imports have fallen significantly due to record-high prices, Indian investors have taken a shine to silver. Imports nearly doubled to 197 tonnes in June from 109 tonnes a year ago. While that's off from the 544 tonnes imported in May, the overall trend appears positive.

Just over 50% of the decline from Monday's 14-year high at $39.119 has been retraced, bolstering confidence in the bullish scenario that calls for additional gains to $40 and $41.610. An eventual penetration of the latter would put the all-time highs around $50 in play.

On the downside, $38.092/000 marks first support. Wednesday's low at $37.557 is the more important level to watch in the week ahead. 


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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