Gold and silver start the week on the bid amid expectations of Fed easing

Outside Market Developments: Markets remain tilted toward risk-on ahead of Wednesday's Fed decision. A 25 bps rate cut is widely anticipated, so focus will be on the economic projections and forward guidance.

While inflation remains above target, recent FedSpeak has highlighted downside risks to the labor market as a more pressing concern. The market is pricing in 66 bps of easing before year-end and more than 100 bps through June 2026.

The Bank of Canada will also announce policy on Wednesday. The BoC is expected to trim rates by 25 bps, amid 
cooling inflation, a softening labor market, and tariff-related economic pressures.

Other important economic releases include U.S. retail sales and industrial production. Median expectations for retail sales are +0.3% and -0.1% for IP.

President Trump posted on TruthSocial that trade talks with China are going "VERY WELL!" A framework deal for TikTok to become a U.S.-owned company has reportedly been reached, and Trump indicated that he will speak with President Xi of China on Friday. Trade optimism is providing an additional boost to risk appetite.

Empire State Index fell 20.6 points to a three-month low of -8.7 in September, below expectations of 5.0, versus 11.9 in August. "New orders and shipments fell sharply," according to the New York Fed.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$3.21 (-0.09%)
5-Day Change: +$31.34 (+0.86%)
YTD Range: $2,607.16 - $3,673.51
52-Week Range: $2,541.42 - $3,673.51
Weighted Alpha: +42.39

Gold starts the week on the bid, setting new record highs and moving within striking distance of $3,700. The market remains focused on this week's Fed decision, but the weak Empire State print bolsters the market's already dovish leanings.



The $3,700 target is within striking distance. Above that, the $3,730.44 (Fibonacci) and $3,743 (measuring objective) levels attract. The $3,800 and $4,000 levels are looking increasingly attractive.

Goldman Sachs believes gold could rise dramatically if Fed independence is compromised, driven by flight out of Treasuries and the dollar. "If 1% of the privately owned U.S. treasury market were to flow into gold, the gold price would rise to nearly $5,000," according to a report released last week.

Global ETFs saw net inflows of 14.9 tonnes last week, led by European investors. North American investors took a bit of a breather, only adding 2.8 tonnes after strong inflows totalling 50.6 tonnes in the previous two weeks.

Minor chart support at $3,656.54/54.00 protects today's Asian low at $3,626.99. Thursday's low at $3,614.69 provides a good intervening barrier ahead of last week's low at $3,580.13.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.006 (+0.01%)
5-Day Change: +$1.118 (+2.70%)
YTD Range: $28.565 - $42.460
52-Week Range: $28.565 - $42.460
Weighted Alpha: +44.41

Silver continues to march higher, setting another round of new 14-year highs. The white metal is up for a fourth straight session, and there have not been consecutive lower daily closes since August 14-15. 



Sights are on the $43 level next. Above that, chart levels at $43.352 (Sep'11 high) and $44.167 (Aug'11 high) are in play. Further out, the record highs in silver around $50 are looking increasingly attractive.

Initial support at $42.042/$42.017 is highlighted by today's early U.S. low and the Asian low. A minor chart point at $41.664 protects Friday's low at $41.405. 


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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