Gold nears $5,000, as silver surges above $100

Outside Market Developments: This week delivered a classic dose of market whiplash: early geopolitical jitters sparked by President Trump's aggressive push on Greenland and related tariff threats drove risk aversion before a swift de-escalation triggered a sharp two-day risk-on rally. Heading into the weekend, U.S. shares are little changed, but there's still enough uncertainty out there to keep safe-haven assets underpinned.

U.S. economic data this week were generally favorable, showing economic resilience and sticky, but steady inflation. BEA revised Q3'25 GDP to 4.4% y/y. Headline and core PCE inflation held around 2.8% y/y. Solid disposable income gains led to a 0.5% rise in consumer spending in November. Meanwhile, the University of Michigan Consumer Sentiment for January was revised up to a five-month high of 56.4.

Strength in the economy eroded dovish Fed bets in advance of next week's FOMC meeting. Fed funds futures are no longer pricing 50 bps of easing this year. The next 25 bps cut has been pushed to September.

The hawkish tilt hasn't done much to underpin the greenback. The dollar index tumbled to a 16-week low, returning considerable credence to the underlying downtrend as mounting worries about the unpredictability of the Trump administration stoked the "sell-America" trade.

The BoJ held its policy rate steady at 0.75% in a widely expected decision. The vote was 8-1 with one hawkish dissenter. Governor Ueda signaled readiness to monitor the rapid rise in JGB yields amid the snap election backdrop, though no immediate further tightening was indicated.

Japanese PM Takaichi dissolved the lower house of parliament on Friday in advance of a snap general election on 8-Feb, just three months after she became Japan's first female premier. Takaichi, a hard-line conservative, called for an early vote in hopes of leveraging her personal popularity to seek a fresh public mandate for her leadership and policies on economic revival, inflation control, defense enhancements, and security issues.

Japanese Government Bonds (JGBs) experienced significant volatility this week, with long-end yields surging to record highs early on (40-year yield hitting over 4.2% and the 30-year above 3.9%) amid fiscal concerns from Prime Minister Takaichi's snap election announcement and proposed tax cuts/spending increases, before partially rebounding later in the week as the Bank of Japan held rates steady at 0.75% and signaled readiness to intervene if needed.

The yen fell to an 18-month low against the dollar last week, weighed by mounting fiscal worries. However, the yen jumped to two-week highs following the BoJ policy decision, spurred by heightened worries about intervention.

The WEF summit in Davos wraps up after a week of talks covering a wide range of global challenges like economic growth, geopolitics, technology, people, and the planet, while producing reports, fostering initiatives, and building trust across stakeholders. President Trump's assertive rhetoric on trade, Greenland, and alliances seemed to dominate discussions.

Additionally, leaders emphasized the urgent need to shift toward responsible AI deployment and execution, while addressing economic concerns like 3.3% global growth forecasts tempered by trade frictions, debt risks, asset bubbles, and the imperative to unlock new growth and energy sources.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$13.42 (-0.27%)
5-Day Change: +$345.80 (+7.52%)
YTD Range: $4,310.83 - $4,967.13
52-Week Range: $2,732.23 - $4,967.13
Weighted Alpha: +84.73

Gold reached record levels every day this week, moving within striking distance of $5,000 on Friday. The yellow metal is on track for its third straight higher weekly close of the year.



Safe-haven demand remains robust, driven by a myriad of geopolitical and trade tensions; the kerfuffle over Greenland is just the latest. Mounting worries about another U.S. government shutdown, and the deteriorating fiscal condition are adding weight to the dollar's sell-off and stoking the bid in gold.

Japan's fiscal condition is another source of concern, driving flight to quality. Takaichi's bid to consolidate power with a snap election is far from being a certainty.

According to the World Gold Council, the PBoC "announced gold purchases every month in 2025, ending the year with a 27t addition and pushing China’s official gold holdings to 2,306t, 8.5% of total reserves." However, that only ranks fourth in terms of the biggest addition to reserves last year. The National Bank of Poland ranks number one with 95 tonnes. The  National Bank of Kazakhstan (49 tonnes) and Banco Central do Brasil (43 tonnes) also bought more gold.

China’s "official" gold holdings now stand at 2,306 tonnes, 8.5% of total reserves. Many believe them to be much higher. 

The holdings of Chinese ETFs doubled in 2025 to 248 tonnes, and AUM surged 248%. Meanwhile, volume on the Shanghai Futures Exchange reached record levels.

The Reserve Bank of India slowed its gold buying in 2025 amid record-high prices, but domestic demand remained resilient, supported by investment demand. Inflows into Indian ETFs were "unprecedented," according to the WGC, while digital gold continues to gain popularity.

The key $4993.96/$5,000 came within striking distance on Friday before profit-taking emerged. A true test of this level is still considered likely, and penetration would shift focus to the next Fibonacci projections at $5,180.79 and $5,268.49.

Friday's intraday low at 4,900.53 marks first support. A minor level at $4,887.59 protects daily lows from the week at $4,773.50, $4,757.50, and $4,660.05. The low for the week set on Monday is well protected at $4,599.09, and the rising 20-day moving average is at $4,562.15.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$2.817 (+2.93%)
5-Day Change: +$9.603 (+10.65%)
YTD Range: $71.429 - $99.781
52-Week Range: $28.565 - $99.781
Weighted Alpha: +294.65

Silver remains quite volatile, but the bias remains unquestionably bullish. The white metal posted new all-time highs in four of five sessions this week, surging above $100 and $101 on Friday. Silver will notch its third straight higher weekly close and is up more than 40% since the first of the year!



The realities of supply and demand, desire for safe havens, a weak dollar, and good ol' FOMO continue to stoke the bid. Weighted alpha is above 300, reflecting unprecedented momentum.

There's not much on the upside until the next Fibonacci projections at $111.965 and $112.646. Can we get there without some kind of meaningful correction or period of consolidation? Nothing would surprise me at this point, but you still need to be prepared for extreme volatility.

Minor intraday support at $100.475 protects the $100 zone. Today's U.S. low at $98.650 is a more substantial barrier ahead of the low for the day at $96.184.


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.