Gold led higher by surging silver, softer dollar

Outside Market Developments: The Senate was able to invoke cloture on Sunday, ending the Democrat filibuster on the House-passed CR after 14 prior failed attempts. The vote was  60-40 with eight Democrats crossing the aisle to vote with all Republican Senators in favor of advancing a modified version of the CR that extends government funding through January 30, 2026.

The Senate will now consider the modifications, and passage by a simple majority vote is likely today or tomorrow. At that point, the modified CR will go back to the House for a vote. Speaker Mike Johnson has pledged to reconvene the House quickly – potentially as early as Tuesday – for debate and a vote. Once the Senate and House have passed identical versions of the CR, it will go to the President's desk for his signature, and the government will reopen.

Optimism that the shutdown will end this week stoked risk appetite, sending stocks higher. Strong AMD earnings provided an additional boost to the tech sector. Meta, Microsoft, Apple, and Amazon also report earnings this week. Additionally, November is historically the strongest month for equities.

The trade may remain cautious as the various government agencies have a backlog of data releases that were delayed by the shutdown. We expect a period of compressed releases over 1-2 weeks, although this can increase volatility and necessitate revisions.

Last week's University of Michigan preliminary consumer sentiment reading for November 2025 plunged 6.2% to 50.3, close to the record low of 50.0 from June 2022, driven primarily by widespread anxieties over the prolonged federal government shutdown's economic fallout. While an end to the shutdown will improve broader sentiment, the 17% plunge in views about personal finances may continue to pose a headwind into the all-important holiday shopping season. 

An end to the shutdown will return market focus to America's dire fiscal situation. The debt/GDP ratio is on an unsustainable path, driven by persistent primary deficits and escalating net interest payments that could crowd out private investment and slow economic expansion.

Any slowing of that trajectory associated with the collection of tariffs is suddenly in doubt following skepticism expressed by Supreme Court justices during oral arguments last week. SCOTUS is expected to rule on the legality of President Trump's tariff regime before the end of the year.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$84.33 (+2.11%)
5-Day Change: +$112.75 (+2.82%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,541.42 - $4,381.21
Weighted Alpha: +61.91

Gold is up more than 2% as the dominant uptrend tries to reassert itself. Silver is leading the way, with prospects for further Fed easing and a weaker dollar contributing to the yellow metal's bid.



While the probability for a December rate cut is holding just above 60%, the market may be shifting its focus to the January FOMC meeting. A 25 bps cut is fully priced in for January.

One might expect that an end to the shutdown would weigh on the safe-haven appeal of gold as investors jump back into risk assets. However, gold has been rallying alongside the AI-inspired stock market throughout the year amid persistent worries about the economy, the grim fiscal outlook, political unrest, geopolitical and trade concerns, expectations of further Fed easing, and a generally weak dollar.

The demand picture for gold remained robust in Q3, according to the World Gold Council. Total gold demand grew 3% y/y to 1,313 tonnes, the highest quarterly total in the WGC data series. This was driven largely by investment. "Huge ETF buying (+222t), accompanied by a fourth successive quarter of bar and coin demand above 300t (316t) fuelled the rise in overall demand."

Central bank gold buying "remained elevated" at 220 tonnes, +28% versus Q2. Brazil rejoined the party, adding 16 tonnes to reserves in September. It was Brazil's first purchase since 2021.

Jewelry consumption posted a sixth straight quarterly decline, weighed by record-high prices. Technology demand was slightly weaker, as "AI demand met with headwinds from US tariff policy and the surging gold price."

ETF inflows were little changed last week at +2.3 tonnes as the market consolidated the October losses. North American outflows over the past three weeks were fairly limited at 10.8 tonnes, suggesting a level of commitment to the trade.

Clyde Russel of Reuters wrote an interesting piece last week, where he reveals that while gold's rally looks huge, it's only the third largest in the last 50 years. The current rally is "actually well behind the price increases recorded in the late 1970s and again in the 2000-2011 uptrend."

Does that suggest the market still has room to run? I continue to like the fundamentals, and while attainment of the $5,000 objective seems less likely before year-end, I think we could see it early in Q1. 

Today's tests above the 20-day moving average return a degree of confidence to the underlying uptrend. A close above this indicator at $4,082.03 would offer further encouragement to the bull camp.

With more than 38.2% of the decline now retraced, focus shifts to the 50% retracement level at $4,134.12. A series of highs from late-October at $4,143.81/$4,154.65/$4,161.10 bolster this area. Penetration would highlight the 61.8% retracement level at $4,192.43.

Today's early U.S. low at $4,075.40 marks first support. Below that, cogestive chart support is found at the $4,000 zone.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.777 (+3.68%)
5-Day Change: +$2.459 (+5.11%)
YTD Range: $28.565 - $54.465
52-Week Range: $28.565 - $54.465
Weighted Alpha: +77.70

Silver has rebounded more than 4%, encouraged by the anticipated end to the government shutdown and ongoing optimism about the tech sector. A weaker dollar and persistent expectations for further Fed easing provide additional lift.



More than 50% of the entire corrective decline has already been retraced, and a close above the 20-day moving average looks likely. These gains return considerable confidence to the underlying uptrend. Sights are now on the 61.8% retracement level at $51.064, and penetration will further embolden the bull camp.

I'll watch $50 on a close basis today. Former chart resistance at $49.359 is bolstered by the 20-day MA at $49.349, and is the more important short-term support level.


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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