Gold and silver continued their marches higher on haven interest and weaker dollar

OUTSIDE MARKET DEVELOPMENTS: Market focus this week is on the two-day FOMC meeting that begins on Tuesday. The Fed is widely expected to be on hold, amid signs of a resilient economy and sticky, but stable inflation.

The trade is no longer pricing 50 bps of additional easing in 2026. Futures imply a Fed funds rate of 3.1975% at year-end, or 42.75 bps of easing. The next 25 bps cut is not fully priced until September.

The unrelenting safe-haven-driven rally in the precious metals is going to be another highlight this week. Gold, silver, and platinum all start the week at record levels.

Precious metals are attracting haven demand as relations between the U.S. and NATO allies continue to deteriorate over President Trump’s desire for Greenland. Trump is also threatening 100% tariffs on Canadian imports after the Carney government agreed to a limited trade deal with China. Concerns about Fed independence persist as well.

The dollar index gapped lower on the open, reaching levels not seen since mid-September. The Fed was reportedly checking the USD-JPY rates late last week, suggesting that U.S. and Japanese policymakers were coordinating to stem recent yen losses, raising the risk of direct intervention.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$102.37 (+2.05%)
5-Day Change: +$401.71 (+8.60%)
YTD Range: $4310.83 - $5,110.24
52-Week Range: $2,732.23 - $5,110.24
Weighted Alpha: +88.58

Gold exceeded the $5,000 target in overseas trading, spurred by strong safe-haven demand, a weak dollar, and another dramatic surge in silver. If sustainable, today would mark the sixth straight daily gain.



Focus later in the week will be on the Fed policy announcement on Wednesday. A hold is widely anticipated. Perhaps only an exceptionally hawkish statement, suggesting the next move could be a hike, would be sufficient to trigger a much-needed correction in gold. That seems unlikely.

Gold-backed ETFs continue to attract investor interest. The ETFs saw inflows of 34.5 tonnes in the week ended 23-Jan. All regions were net buyers, but Asian investors led the charge last week. It was the twelfth straight weekly inflow.

The push above $5,000 shifted focus to the $5,180.79 Fibonacci objective. If this level also gives way, $5,200 and the next Fibonacci level at $5,268.49 would be in play. While the market remains quite overextended and vulnerable to correction, the trade seems inclined to remain focused on buying strategies. 

On the downside, intraday support at $5,055.20/53.21 protects the more important $4,990.67/66 level. Secondary support is marked by Friday's low at $4,900.53.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$6.071 (+5.88%)
5-Day Change: +$14.717 (+15.60%)
YTD Range: $71.429 - $110.874
52-Week Range: $28.565 - $110.874
Weighted Alpha: +330.85

Silver surged dramatically right from the open, notching new all-time highs above $110. During the U.S. session, the white metal traded with a 170-handle before selling pressures surfaced.



One might argue that this market has become detached from reality, but one could also say that this is a market that is repricing reality after five years of supply deficits. The market accelerated dramatically to the upside after China imposed export controls at the start of the new year.

So, where is the price reality? Industrial users are already thrifting as best they can. Average silver loadings for photovoltaic cells, for example, were reportedly reduced 20% in 2024 alone. Further cuts likely occurred in 2025. However, because of silver's unique properties, substitution is not expected to make a meaningful dent in demand.

Even with today's more than $6 retreat from the highs, the white metal is still up nearly 6% today. The midpoint of today's massive $14 range is at $110.542. Despite the magnitude of the sell-off, I can't say with any degree of certainty that even a short-term high is in place. A lower close (below $103.419) would be a little more telling from a technical perspective.

Today's Asian low at $103.379 protects the $100 zone. More substantial support is marked by Friday's low at $96.184.

A close above $112 would be suggestive of further strength. Another round of new highs above $117.705 would favor a push to $120, with potential to the next tier of Fibonacci resistance at $128.721.


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.