Gold and silver higher for a second straight session, but remain vulnerable in this short holiday week
OUTSIDE MARKET DEVELOPMENTS: The Iran situation remains the dominant macro driver and continues to produce volatile price action across all asset classes. The war, now in its 30th day, is highlighted by continued airstrikes and missile exchanges across the region.
Israel and the U.S. have targeted Iranian missile production facilities, nuclear sites (including the Arak heavy-water plant), and defense infrastructure. Iran continues to hit back, launching multiple waves of ballistic missiles at Israel – hitting areas near Beersheba and Tel Aviv – and striking a U.S. radar aircraft at a base in Saudi Arabia.
The conflict has widened as Iran-backed Houthis fired their first missiles at Israel from Yemen. Additionally, Israeli PM Netanyahu announced Sunday that the IDF will widen its invasion of southern Lebanon to push Iranian proxy Hezbollah forces northward, expanding the existing security strip. Meanwhile, the U.S. has deployed thousands more troops to the region, and President Trump has spoken about potentially seizing Iran’s Kharg Island oil terminal, heightening speculation of possible ground operations.
President Trump continues to claim talks with Iran are progressing “extremely well” and notes some oil tankers are moving through the Strait of Hormuz. However, Iran has rejected key U.S. demands and insists on its own conditions (including sovereignty over the strait). Both sides appear to be balancing military pressure with back-channel outreach to prevent further escalation.
Heading into month-end and quarter-end, the stagflation narrative is entrenching itself as the other key macro factor. The war-related oil shock has pushed energy prices significantly higher, feeding into broader consumer prices while weighing on spending, business activity, and GDP growth.
The Fed faces a classic stagflation conundrum with no painless option. Raising rates to combat inflation could further slow the economy and increase unemployment, whereas holding rates steady or cutting them to support growth could allow inflation to become more entrenched.
The Fed is widely expected to hold steady at the next FOMC meeting on 29-Apr. The only other move in play based on Fed funds futures is a 25 bps hike, although the chances are scant at 2.6%.
While the outlook for rate hikes has ebbed somewhat from last week, the likelihood that the Fed is at least on hold for the foreseeable future, along with the war-related haven bid, continues to underpin the greenback. The dollar index extended to fresh 10-month highs above 100.48 (16-Mar high), suggesting scope for additional gains to 101.00 and 101.55.
March employment data comes out on Friday, although most major markets will be closed in observance of Good Friday. Consensus is for +55k nonfarm payrolls. After February's terrible -92k print, a downside miss on Friday would reinforce the stagflation theme, especially if hourly earnings beat on the upside.
Negotiations to end the partial government shutdown remain stalled after House Speaker Mike Johnson rejected a Senate-passed deal to fund most of DHS (including TSA) while excluding certain immigration functions. House Republicans are pushing full funding bills that Democrats adamantly oppose. Lawmakers are in recess for Easter, with no immediate resolution in sight.
Travelers have faced significant airport delays as TSA staff went unpaid, leading to hundreds quitting. However, the AP reported this morning that most TSA workers got paid today on at least two missed paychecks courtesy of a Trump executive order. Perhaps there is some relief for travelers in sight.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$38.80 (+0.86%)
5-Day Change: +$114.87 (+2.61%)
YTD Range: $4,100.32 - $5,595.02
52-Week Range: $2,961.83 - $5,595.02
Weighted Alpha: +42.33
Gold is trading modestly higher for a second straight session, though gains remain limited amid persistent U.S. dollar strength and lingering investor uncertainty following last Monday’s volatility. With a shortened holiday week ahead and key U.S. jobs data due on Friday, caution and risk management remain the dominant themes.
A breach of last week's high at $4,601.07 (25-Mar) would be somewhat encouraging to the bull camp, but the rising 100-day moving average at $4,637.29 (on a close basis) and the 38.2% retracement level at $4,671.30 are the more important levels to watch this week. Penetration of the latter would shift focus to the convergence of the falling 20-day MA and the 50% retracement level at $4843.50 /$4,847.67.
The recovery from last Monday's low at $4,100.32, at least initially, has the look and feel of an ascending wedge, suggesting further tests of the downside can not be ruled out. Failure to sustain gains above $4,500 would put today's low at $4,420.80 in jeopardy. Additional tiers of support at $4,377.08 (27-Mar low), $4,352.04/$4,350.69 (26-Mar low and Fibonacci), $4,308.83 (24-Mar low), and $4,291.61 (Fibonacci) all protect the range low.
While gold bulls have certainly been tested this year, many analysts continue to view this year's drop as a correction and liquidity-driven event rather than a fundamental breakdown in gold’s long-term bull case. Central bank and investor demand is expected to remain robust, driven by ongoing dedollarization, concerns over record global debt, U.S. political uncertainty ahead of midterm elections, and persistently high geopolitical risks. All of these factors are separate from the Iran headlines and unlikely to reverse regardless of how the war is ultimately resolved.
JP Morgan correctly predicted late in 2025 that the "rally in gold has not, and will not, be linear," but I doubt they would have imagined at the time that gold was in for a nearly $1,500 retreat. As of February of this year, JPM was still quite bullish, forecasting gold to $6,300 by year-end 2026.
I'm more inclined to take the remainder of the year a step at a time. If gold can regain the $5,000 level, which I believe is likely. New all-time highs above $5,595.02 would be very much in play in the latter half of the year. New record highs would reconfirm the $6,000 objective, and beyond that, $6,300.
SILVER
OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.989 (+1.42%)
5-Day Change: +$1.509 (+2.18%)
YTD Range: $61.036 - $121.630
52-Week Range: $28.565 - $121.630
Weighted Alpha: +116.14
Silver is relatively tame within a $4 range to start the week, in sharp contrast to last Monday's riotous session. I think the trade is happy for a little relief and a holiday-shortened week to reacclimate to the new range.
Silver has lost nearly half its value since hitting an all-time high of $121.53 in January, in one of the more violent collapses in the precious metal's modern history; a selloff driven by liquidity-driven unwinds, stagflation fears hammering industrial demand expectations, and forced selling as leveraged longs met margin calls across the board. It's been a rout, and I'm not convinced it's over.
And yet, a case can still be made that the underlying fundamentals remain supportive. The market is on track to notch its sixth straight annual supply deficit. The Silver Institute projects the shortfall to be 67 Moz. Industrial demand is expected to remain robust through 2026, driven in part by strong growth in the solar panel sector, with global photovoltaic capacity expected to reach a record high 2,849 gigawatts by year-end.
Meanwhile, global mine production is forecast to rise just 1% to 820 million ounces in 2026. Silver recycling is growing faster, up about 7%, but anecdotal evidence suggests this source of supply is now largely maxed out. Record-high prices earlier this year flooded the recycling channel, and while some refiners are expanding capacity, many are reluctant to commit significant capital expenditures for fear of ending up with excess capacity once the market returns to more normal conditions.
Bottom line: Demand will continue to outstrip supply.
Last week's high at $74.554 is protected by the $72.192. A short-term close back above the 100-day moving average at $75.162 would give the bull camp some hope.
On the downside, supports at $67.742 (today's low), $67.489 (27-Mar low), $66.763 (26-Mar low), $66.030 (24-Mar low) protect the spike low from a week ago at $61.036.
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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