Gold retreats on Trump/Putin summit hopes and gold bar tariff uncertainty

OUTSIDE MARKET DEVELOPMENTS: Russian President Putin is slated to meet face-to-face with President Trump on Friday in Alaska. The two will discuss a potential ceasefire in Ukraine and move toward a lasting peace deal. It is unclear at this point if Ukrainian President Zelenskyy will be included.

Zelenskyy said that Kyiv must be a part of any negotiations. He also vowed not to cede any Ukrainian territory to Russia.

Nonetheless, there is some optimism that the meeting will dial back geopolitical tensions. Risk appetite remains elevated to start the week.

President Trump declared a public safety emergency in Washington, DC, putting the city's police department under federal control. “This has to be the best run place in the country, not the worst run place in the country,” Trump said last week.

The U.S./China tariff truce is scheduled to expire tomorrow. While a trade deal ahead of the deadline seems unlikely, there is an expectation that the parties will agree to another 90-day extension of the truce.

Markets will also be focused on this week's inflation data. Median expectations are for 0.2% m/m increases for both CPI and PPI.

There is currently a high probability of a rate cut in September, but hotter-than-expected inflation readings could swing sentiment back toward a hold. The dovish bias has moderated somewhat since last week, prompting a rebound in the dollar index.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$38.69 (-1.14%)
5-Day Change: -$15.69 (-0.47%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,424.62 - $3,495.89
Weighted Alpha: +32.78

Gold retreated into the range as optimism surrounding the Trump/Putin summit sapped haven interest. The trade is also awaiting clarification after confusion surfaced late last week regarding the tariff treatment of certain gold bars. A firmer dollar weighs as well.



In late July, U.S. Customs and Border Protection issued a ruling that one-kilogram and 100-ounce gold bars, primarily imported from Switzerland, would be classified under a customs code subject to tariffs, including a 39% tariff on Swiss goods. On Friday, the FT reported the story, stoking market uncertainty and sending gold futures surging to record highs above $3,500.

The White House subsequently said an executive order would be issued in the near future "clarifying misinformation" about tariffs on gold bars. It's not clear to me how the CBP ruling and coding requested by Manfra, Tordella & Brookes, Inc. are "misinformation," but the trade seems convinced gold bars will be exempt from tariffs.

Today's setback puts the yellow metal back around the midpoint of the range-within-the-range at $3,352.57, and the 20- and 50-day moving averages are being pressured. The midpoint of the broader range at $3,313.56 remains protected.

Friday's high at $3,403.42 provides another tier of resistance, along with $3,435.01 (23-Jul high) and $3,449.13 (16-Jun high), ahead of the record high around $3,500. While the tone has been consolidative since the $3,127.12 corrective low was established on 15-May, the underlying trend is still perceived to be bullish.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.536 (-1.40%)
5-Day Change: +$0.329 (+0.88%)
YTD Range: $28.565 - $39.517
52-Week Range: $27.237 - $39.517
Weighted Alpha: +31.82

Silver slipped to a four-session low, weighed by the setback in gold and a firmer dollar. The failure to achieve a trade deal with China ahead of tomorrow's deadline, and no confirmation of an extension of the truce, also weighs.



Minor chart support marked by last Tuesday's low at $37.337 stands in front of the 50-day moving average at $37.074. A breach of the latter would shift focus to last week's low at $36.770. The $36.287 low from 31-Jul is considered key support.

A rise back above the 20-day MA at $38.064 is needed to return focus to the $38.826 Fibonacci level. Above that, the 14-year high set on 23-Jul at $39.517 would be back in play.


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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