Gold and silver poised for first higher weekly closes in three

OUTSIDE MARKET DEVELOPMENTS: U.S. and Iranian forces exchanged fire in the Strait of Hormuz on Friday as three U.S. Navy warships transited the waterway. "No U.S. assets were struck. U.S. Central Command eliminated inbound threats and targeted Iranian military facilities responsible for attacking U.S. forces including missile and drone launch sites; command and control locations; and intelligence, surveillance and reconnaissance nodes," according to CENTCOM.

Iran accused the U.S. of initiating the clash by targeting its vessels and coastal areas, calling it a ceasefire violation. President Trump described the incident as minor and said the fragile ceasefire remains in effect. “They trifled with us today. We blew them away,” said Trump.

Iran is still reviewing the latest U.S. peace proposal. Trump continues to say that talks are “going very well,” but need to conclude quickly.

April nonfarm payroll rose by 115k, beating consensus expectations of around 60k, with gains led by health care, transportation/warehousing, and retail trade. The unemployment rate held steady at 4.3%, while wage growth remained modest at +0.2% m/m, painting a picture of a resilient labor market and underpinning risk appetite.

Job market resilience generally makes the Fed more comfortable holding interest rates steady, allowing it to continue focusing on fighting sticky inflation. The central bank can afford to wait for clearer signs that inflation is easing without risking a significant rise in unemployment.

Markets will be focused on inflation data in the week ahead. April CPI comes out on Tuesday, and PPI is up on Wednesday. These inflation readings, alongside housing data and FedSpeak, will shape expectations for the path of interest rates, while ongoing developments around the U.S.-Iran ceasefire and oil supply risks will keep geopolitical risks in play.

Additionally, the term of Fed chair Powell ends on 15-May. He is widely expected to be replaced by Kevin Warsh, pending final Senate confirmation. Powell could stay on as interim chair if necessary. I'm not expecting anything definitive on policy from Warsh until after he's presided over his first FOMC meeting.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$32.70 (+0.70%)
5-Day Change: +$100.86 (+2.19%)
YTD Range: $4,100.32 - $5,595.02
52-Week Range: $3,127.12 - $5,595.02
Weighted Alpha: +38.50

Gold heads into the weekend with a bit of a bid, and appears poised for its first higher weekly close in three. The yellow metal has been underpinned by optimism around Middle East de-escalation, lower oil, and a weaker dollar, allowing it to largely shrug off the most recent clash in the Strait of Hormuz and stronger-than-expected U.S. jobs data.



The previous two closes have been right around the 20-day MA. I'd like to see a more convincing close above the 20-day to set up upside follow-through in the week ahead to challenge the 100-day MA at $4,783.91. Intervening resistance is noted at the convergence of this week's high and the 50-day MA at $4,764.57/$4,768.85.

An eventual convincing breach of the 100-day MA would bode well for a short-term retest of the mid-April high at $4,886.18. Penetration of that high would favor further retracement toward the $5,000 level.

However, price action will continue to hinge on Middle East headlines. If gold can't sustain the move above the 20-day MA, look for a retest of the $4,600 zone. A retreat below $4,600 would leave Monday's low at $4,503.02 vulnerable to a challenge.

While gold is entrenched within the range that formed earlier in the year, the long-term outlook remains structurally bullish. Most major banks are forecasting prices to climb toward $5,400 – $6,300 by the end of 2026 – 2027, with potential as high as $7,000 – $10,000 by 2030, driven by sustained central bank accumulation, investor diversification away from the dollar, elevated geopolitical risks, and persistent global debt and inflation concerns.

Incrementum noted in its latest IGWT Report: "[G]old ETFs recorded one of the largest monthly outflows in recent years, totaling 85 tonnes in March, while COMEX gold deliveries continued to decline from recent highs. Together, these dynamics point to easing speculative activity, a development that bodes well for the health and sustainability of the long-term gold bull market."


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$2.097 (+2.67%)
5-Day Change: +$5.091 (+6.76%)
YTD Range: $61.036 - $121.630
52-Week Range: $31.701 - $121.630
Weighted Alpha: +130.30

Silver continues to probe above the 100-day moving average and appears on track for its first higher weekly close in three. The white metal is being buoyed by the de-escalating situation in the Middle East and a weaker dollar, leading to a three-week high on Thursday, and what looks like it will be a more than 6% gain for the week.



Strong tech/AI earnings in recent weeks are contributing to the bid. They reinforce confidence in sustained heavy spending on cloud infrastructure, data centers, and AI hardware – sectors that are driving accelerating industrial silver demand for servers, electronics, connectors, and thermal management.

Industrial applications now make up nearly 60% of total silver demand (a record share). While overall industrial fabrication dipped slightly last year due to solar cutbacks, non-PV sectors continue showing structural, inelastic growth, contributing to persistent market deficits. This shift toward high-tech, hard-to-substitute uses underpins silver’s strong industrial floor.

While silver remains in the lower half of the wide $121.630/$61.036 range from Q1 of this year, the supply/demand equation remains broadly constructive. A convincing close above the 100-day at $80.633 would bode well for a retest of the mid-April high at $83.046. Above the latter, the midpoint of that wide range at $91.333 would be a logical attraction.

The convergence of the 50- and 20-day moving averages at the $76.798/$76.475 zone will be the important support zone to watch in the week ahead. Intervening supports are marked by today's low at $78.341 and Thursday's low at $77.005.

If silver can't hold above the 20-day, further consolidating in the lower half of the range would become likely. Potential would initially be back to this week's low at $72.264.


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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