Blog posts tagged with 'gold'

Gold poised for lower weekly close on resilient risk appetite and firmer dollar

OUTSIDE MARKET DEVELOPMENTS: Israel and Iran continue to exchange strikes a week into the conflict as President Trump opened a two-week window to find a diplomatic solution. “I will make my decision whether or not to go within the next two weeks,” according to a statement from President Trump.

The U.S. joining the fight on the side of Israel would be a major escalation. Nonetheless, the two-week reprieve and talks between Iran and European diplomats in Geneva have prompted a rebound in risk appetite.

President Trump continues to take Fed Chairman Powell to task for failing to cut interest rates. “Europe had 10 cuts, and we had none. And I guess he’s a political guy, I don’t know. He’s a political guy who’s not a smart person, but he’s costing the country a fortune,” Trump said.

While "uncertainty about the economic outlook has diminished," according to Powell, it "remains elevated." That uncertainty is reflected in the wide dispersion on the dot plot.

Powell acknowledged the recent good inflation prints, but believes it can take some time for tariffs to be fully reflected in prices. "Ultimately, the cost of the tariff has to be paid, and some of it will fall on the end consumer," he said. Powell pointed out that the Fed is "adapting in real time" to ever-changing tariff policies.

Fed Governor Waller (hawk) told CNBC this morning that he doesn't see tariffs boosting inflation significantly, and the central bank should consider easing as soon as the next meeting in July. "I’m all in favor of saying maybe we should start thinking about cutting the policy rate at the next meeting, because we don’t want to wait till the job market tanks before we start cutting the policy rate,” he said.

The market isn't buying into Waller's dovish tilt just yet, with Fed funds futures showing just a 14.5% probability of a 25 bp cut in July. A quarter-point cut isn't fully priced in until October, with 48 bps in easing priced for year-end.

Philly Fed Index was unchanged at -4.0 in June, below expectations of 0.0, versus -4.0 in May and a two-year low of -26.4 in April.

Leading Indicators -0.1% in June, in line with expectations, versus a negative revised -1.4% in May (was -1.0%). 


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$14.48 (-0.43%)
5-Day Change: -$87.17 (-2.54%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,295.86 - $3,495.89
Weighted Alpha: +44.21

Gold is poised for its first lower weekly close in three, and the biggest loss since the 12-May week. With the Fed still on hold, the dollar is set to close higher on the week, which has provided some pressure on the yellow metal.  Resilient risk appetite has also weighed on gold this week, despite elevated geopolitical risks and ongoing tariff uncertainty.



Additional information on the large metals discovery in Argentina may also be providing a headwind. Lundin Mining issued an update to the Mineral Resource estimate on Monday, essentially affirming its original estimates from May. Jack Lundin called it “one of the most significant greenfield discoveries in the last 30 years."

Estimates include the following: 13-million tonnes of measured and indicated copper, with 25-million tonnes inferred; 32-million ounces of gold measured and indicated, and 49-million ounces inferred; and 659-million ounces of silver measured and indicated, with 808-million ounces inferred.

Despite being under pressure this week, gold's corrective action below $3,400 has been limited. The 20-day moving average attracted some buying interest and kept more important supports at $3,320.62/19.56 and $3,300.00/$3,297.69 at bay.

A move back above $3,400 early next week would favor a retest of Monday's eight-week high at $3,449.13. Penetration of the latter, would bode well for a resumption of the dominant uptrend and a decisive push above $3,500.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.271 (-0.74%)
5-Day Change: +$0.304 (+0.83%)
YTD Range: $28.565 - $37.288
52-Week Range: $26.524 - $37.288
Weighted Alpha: +25.49

Silver is set to close lower on the week, despite having set a 13-year high at $37.288 on Wednesday. Combined with an outside week (higher high, lower low), this creates some technical downside risk for the week ahead, with the gold/silver ratio holding support at 90.



While tests below $36 did attract some buying interest today, the $35.317/225 level (20-day MA and 23.6% retracement level) may be the initial short-term attraction. Today's overseas low at $35.570 now marks an intervening barrier.

A close above $36 to end the week would be somewhat encouraging. However, a move back above the midpoint of this week's range at $36.429 is needed to shift focus back above $37.

The February 2012 high at $37.430 is now protected by this week's high at $37.288. The former must be negated to keep silver on track for a push to the $38.750 Fibonacci objective.


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.

Gold and silver consolidate, awaiting news from Fed

OUTSIDE MARKET DEVELOPMENTS: Geopolitical tensions are higher today on speculation that the U.S. is poised to join Israel in its war against Iran. President Trump demanded UNCONDITIONAL SURRENDER on Tuesday via TruthSocial and met with his national security team.

"I may do it, I may not do it, nobody knows what I'm going to do," Trump replied when asked if the U.S. would participate in strikes on Iran's nuclear and military facilities. Tehran rattled its saber in response, warning that U.S. involvement would risk "all-out war."

The Fed is expected to remain on hold when the central bank announces policy this afternoon. The market will dissect the policy statement, economic projections, and Powell's presser in hopes of discerning when the easing campaign might resume. I believe the Fed will be intentionally opaque.

Sweden's Riksbank delivered the expected 25 bps cut. The BoJ left rates unchanged earlier in the week, which was also in line with expectations.

ECB Governing Council member Panetta warned that there are "substantial and difficult-to-quantify risks" for the economic outlook. Panetta specifically cited "conflicting signals in the U.S. trade policy" and the "recent escalation of the conflict between Israel and Iran." 

"Against this backdrop, the ECB's Governing Council, at its most recent meeting, reaffirmed a flexible approach, keeping its options open," he said. 

Japanese Prime Minister Shigeru Ishiba met briefly with President Trump at the G7 Summit on Monday but failed to extract any concessions on auto tariffs that are slated to be reinstated on July 9. The two leaders agreed to continue negotiating.

Housing Starts tumbled 9.8% to a five-year low 1.256M pace in May, below expectations of 1.360M, versus a revised 1.392M in April (was 1.361M). Permits fell 2% to a 1.393M pace from 1.422M in April. Completions rose  5.4% to 1.526M, versus 1.448M in April.

Initial Jobless Claims fell 5k to 245k in the week ended 14-Jun, in line with expectations, versus a revised 250k in the previous week. Continuing claims fell 6k to 1,945k in the 7-Jun week, above expectations of 1,940k, versus a revised 1,951k in the previous week (was 1,956k).


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$8.53 (-0.25%)
5-Day Change: +$31.92 (+0.95%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,295.86 - $3,495.89
Weighted Alpha: +46.63

Gold remains consolidative below $3,400 amid conflicting pressures as the market awaits today's Fed policy decision. The central bank is widely expected to remain on hold, but the trade is hoping to find clues about the Fed's intentions for the remainder of the year.



The ongoing war between Israel and Iran should keep the yellow metal generally underpinned with haven interest. If the U.S. joins the fray, it would be a substantial escalation.

Meanwhile, Israel continues to fight Hamas in Gaza and exchange attacks with Houthi rebels in Yemen. The Lebanese government has warned Iranian proxy Hezbollah to stay out of the fight. And let's not forget that the war in Ukraine continues to rage.

A convincing move back above $3,400 would favor a retest of Monday's high at $3,449.13. Scope remains for new record highs above $3,500, which would shift focus to the $3,596.20 Fibonacci objective.

While the dollar index is trading off the three-year low set last week, the downtrend on the greenback remains broadly supportive to gold.

Initial support at $3,373.55/46 protects the more important $3,347.54/$3,344.27 zone, where the 20-day moving average corresponds with the 12-Jun low. Secondary tiers of support are noted at $3,320.62 and $3,300.00/$3,297.69.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.023 (+0.06%)
5-Day Change: +$0.648 (+1.79%)
YTD Range: $28.565 - $37.288
52-Week Range: $26.524 - $37.288
Weighted Alpha: +29.64

Silver eked out a fresh 13-year high of $37.388 in overseas trading before retreating modestly. Focus remains squarely on the upside in the wake of this month's range breakout.



That breakout projects as high as $41.159 based on a simple measuring objective. A breach of the February 2012 high at $37.430 is needed to perpetuate the uptrend. Such a move would lend credence to my next Fibonacci objective at $38.750, as well as the next big-round-number at $40.

A minor chart support at $36.592/514 protects recent lows at $36.183/065. I suspect dips back within the range will be seen as buying opportunities.

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.

Gold consolidates below $3,400 as silver surges to 13-year highs above $37

OUTSIDE MARKET DEVELOPMENTS: President Trump posted an ominous warning to residents of Tehran last night, urging them to "immediately evacuate." Israel claims to have air superiority over much of Iran after neutralizing much of the country's air defenses over the past several days.

This leaves Iran quite vulnerable, with the IDF able to attack with impunity using conventional munitions. Meanwhile, Iran continues to fire limited and expensive ballistic missiles at Israel, where a large percentage are intercepted.

With the Israeli air force able to linger over Iran, each Iranian missile launch presents an opportunity to take out another launcher. Reportedly, a third of Iranian launchers have already been destroyed.

Iran's defensive and offensive capabilities are being systematically deteriorated, not to mention their nuclear program. Tehran is reportedly keen on a ceasefire and a return to the negotiating table, which has ratcheted down geopolitical risks.

President Trump departed the G7 summit in Alberta early, presumably to deal with the Israel-Iran conflict. The summit has not generated any breakthroughs, underscoring the fragility of global cooperation amid trade disputes, regional conflicts, and shifting alliances. G7 members did commit to continued dialogue.

The two-day FOMC meeting begins today. The Fed is widely expected to remain on hold when policy is announced tomorrow. At this point, Fed funds futures aren't fully pricing in a rate cut until December as growth risks have generally moderated, today's economic data notwithstanding.

China's retail sales surged 6.4% in May – the strongest print since December 2023 – boosted by government subsidies. However, consumer sentiment remains weak, suggesting this level of consumption may not be sustainable.

Retail Sales fell 0.9% in May, below expectations of -0.6%, versus a negative revised -0.1% in April (was +0.1%). Ex-auto -0.3% on expectations of +0.2%, versus UNCH in April. Tariff distortions were highlighted by a 3.5% drop in vehicle sales.

Industrial Production fell 0.2% in May, below expectations of UNCH, versus a revised +0.1% in April (was UNCH). Capacity utilization slipped to 77.4% from 77.7%.

Business Inventories were unchanged in April, in line with expectations, versus +0.1% in March.

Import Price Index was unchanged in May, inside expectations of -0.3%, versus +0.1% in April.

Export Price Index fell 0.9% in May, below expectations of -0.2%, versus +0.1% in April.

NAHB Housing Market Index fell 2 points to 32 in June, below expectations of 36, versus 34 in May.  According to the report, "37% of builders reported cutting prices in June, the highest percentage since NAHB began tracking this figure on a monthly basis in 2022."


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$12.23 (+0.36%)
5-Day Change: +$64.26 (+1.93%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,295.86 - $3,495.89
Weighted Alpha: +46.68

Gold is modestly defensive below $3,400 on elevated risk appetite and a firmer dollar. However, the yellow metal remains slightly more than $100 off the record high, underpinned by geopolitical risks, persistent trade uncertainty, U.S. fiscal and political worries, and a generally weak dollar.



While gold remains within the broad range, last week's initial push above $3,400 returned a measure of credence to the underlying uptrend. Scope remains for new record highs above $3,500, which would bode well for an upside extension to the $3,596.20 Fibonacci objective.

The World Gold Council's latest Central Bank Gold Reserves survey reinforces the notion that official demand will continue to be an ongoing bullish driver. According to the survey, "95% of respondents believe that global central bank gold reserves will increase over the next 12 months."

Additionally, "a record 43% of respondents also believe that their own gold reserves will also increase over the same period."  No survey participants "anticipate a decline in gold holdings."

Setbacks within the well-defined range will likely be viewed as buying opportunities. The first level of support I'm watching is $3,344.27/$3,43.31, where the low from June 12 and the 20-day moving average. Secondary tiers of support are noted at $3,320.62 and $3,300.00/$3,297.69. 


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.763 (+2.1%)
5-Day Change: +$0.304 (+0.83%)
YTD Range: $28.565 - $37.178
52-Week Range: $26.524 - $37.178
Weighted Alpha: +29.37

Silver surged to new 13-year highs above $37 on China's retail sales beat, shrugging off the modest dip in gold and a slightly firmer dollar. The gold/silver ratio appears poised for another challenge of support around 90.



Today's gains bring the February 2012 high at $37.430 within striking distance. A breach of this level would bode well for a push to the next Fibonacci projection at $38.750. Beyond that, $40 looks increasingly enticing.

The early-U.S. low at $36.816 marks first support. Another minor chart point at $36.592/514 protects recent lows at $36.183/065.


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.