Gold and silver consolidate ahead of this week's Fed decision
5-Day Change: -$25.16 (-0.59%) YTD Range: $2,607.16 - $4,381.21 52-Week Range: $2,585.51 - $4,381.21 Weighted Alpha: +59.27 Gold is consolidating in the lower half of last week's range, weighed by a firmer dollar and some level of Fed policy uncertainty for next year. While a 25 bps rate cut is favored for Wednesday, the guidance and the dots will likely determine the yellow metal's next move.  A more dovish tilt from the Fed this week would weigh on the dollar and push gold back toward record levels. On the other hand, if guidance is more hawkish, I'd look for further consolidation within the broader $3,887.03/$4,381.21 range. Overall, the outlook for gold remains very constructive, with an eventual upside breakout of the range favored. The yellow metal has been one of the best-performing assets of the year, gaining more than 60% YTD. While there may be some temptation for institutional investors to book some of those profits ahead of year-end, the significant driving forces behind this year's rally are expected to carry over into 2026. Ongoing U.S. policy uncertainties (e.g., tariffs, fiscal pressures from $1.8T deficits) and global tensions continue to underpin demand. Central bank gold buying remains robust, even though the pace is off from the previous three years. Y-t-d reported central bank gold buying trails the previous three yearsCumulative reported gold buying, tonnes*  The World Gold Council believes "markets are largely pricing in a continuation of the status quo." In their 2026 Gold Outlook, they go on to note that "the frequency of tail risk events is on the rise. Whether such developments trigger risk-on or risk-off sentiment could play a decisive role in shaping performance across asset classes and gold’s role as a strategic diversifier." On the upside, Friday's high at $4,259.21 reinforced last week's high set on 01-Dec at $4,264.30. Penetration of the latter would bode well for a retest of the all-time high at $4,381.21. A Fibonacci level at $4,275.46 provides a minor intervening barrier. Today's dip below Friday's low at $4,192.63 leaves $4,175.89 (4-Dec low) and $4,164.99 (3-Dec low) vulnerable to tests. The rising 20-day MA now bolsters this area. The 50-day comes in at $4,083.06. SILVER OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.025 (-0.04%) 5-Day Change: +$0.326 (+0.56%) YTD Range: $28.565 - $59.331 52-Week Range: $28.565 - $59.331 Weighted Alpha: +107.50 Silver is consolidating within Friday's range, well within striking distance of record levels and the $60 objective. A firmer dollar and caution ahead of this week's Fed decision may limit the upside for the time being, but the trend remains unquestionably bullish.  While more hawkish forward guidance could trigger a corrective pullback, dips are still likely to be viewed as buying opportunities. As noted on Friday, revived concerns about AI sector overvaluation remain a downside risk as well. Friday's record high at $59.331 now protects the targeted $59.966/$60.000 level. Beyond that, there's a very long-standing Fibonacci objective at $60.417 (127.2% retracement of the entire move from the 2011 high at $50 to the 2020 low at $11.703). Today's Asian low at $57.638 protects more significant tiers of support at $56.999 (5-Dec low), $56.509 ($-Dec low), and last week's low at $56.232. If the latter were to be violated, former highs at $54.465/390 would be in play. 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 little changed on the week, as silver hit yet another record high
OUTSIDE MARKET DEVELOPMENTS: Markets continue to anticipate a rate cut next week after the delayed release of the Fed's favored inflation measure was essentially a non-event. Headline PCE inflation ticked up to 2.8% y/y in September, while core PCE inflation ticked down to 2.8%.
Fed funds futures didn't move meaningfully, with personal income and PCE generally in line with assumptions. The data are also four months old, so only a large surprise in either direction was likely to move the needle. The probability of a 25 bps rate cut continues to hover just below 90%.
The preliminary read on consumer sentiment for December showed improvement over November, and one-year inflation expectations moderated to 4.1% from 4.5%. However, "the overall tenor of views is broadly somber, as consumers continue to cite the burden of high prices," according to the University of Michigan.
Risk appetite remains broadly tilted toward 'risk-on' heading into year-end, with the major stock indexes at or near record levels. A rate cut next week certainly would provide a tailwind, but the trade will be paying close attention to the tenor of the FOMC statement and the dots to gauge the likelihood of further easing in 2026. At this point, a pause in January appears likely.
Personal Income rose 0.4% in September, in line with expectations, versus +0.4% in July.
PCE rose 0.3% in September, on expectations of +0.4%, versus a revised +0.5% in July (was +0.6%).
PCE Price Index rose 0.3% in September, in line with expectations, versus +0.3% in July; +2.9% y/y, up from 2.8% in July. Core +0.2% m/m, in line, versus +0.2% in July; 2.8% y/y, down from 2.9% in July.
Michigan Consumer Sentiment (prelim) rose 2.3 points to a four-month high of 53.3 for December, above expectations of 52.0, versus 51.0 in November. The current conditions reading, however, hit a record low of 50.7. One-year inflation expectations moderated to 4.1% from 4.5%, while the 5-10 year inflation measure fell to a 12-month low of 3.2% from 3.4%.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$20.09 (+0.48%)
5-Day Change: -$5.05 (-0.12%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,585.51 - $4,381.21
Weighted Alpha: +61.28
Gold heads into the weekend slightly lower on the week, with price action since Wednesday confined to the range that was established on Monday and Tuesday. The yellow metal continues to be underpinned by rate cut expectations, a weaker dollar, and high-flying silver.
Monday's push to six-week highs keeps the technical bias tilted toward the upside within the broader range. A test of the $4,275.46 Fibonacci level is considered likely, with potential above that, back to gold's all-time high at $4,381.21. New record highs would shift focus to the $4,515.53 Fibonacci projection, while bolstering confidence in the longer-term objective at $5,000.
The early U.S. session low at $4,200.08 protects the low for the day set in Asia at $4,195.31. Below the latter, more substantial supports are noted at $4,175.89 (4-Dec low) and $4,164.99 (3-Dec low). The rising 20-day MA should correspond with the latter early next week.
SILVER
OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.673 (+2.96%)
5-Day Change: +$1.767 (+3.12%)
YTD Range: $28.565 - $59.331
52-Week Range: $28.565 - $59.331
Weighted Alpha: +108.26
Silver extended to yet another all-time high in early U.S. trading following the benign inflation data. While the white metal has since stabilized within the intraday range, it is on track for a weekly gain of more than 3% and the second straight higher weekly close.
Silver has gained more than 100% year-to-date, spurred by robust supply/demand dynamics, Fed easing expectations, a weaker dollar, elevated geoplitical and trade risks, and rising worries about the U.S. fiscal situation. None of these drivers are likely to change materially in the new year, keeping focus on the upside.
That being said, silver remains quite extended and is historically prone to violent corrective activity. Record-high prices are attracting retail physical sellers. Even investors who bought in as recently as last month have already made more than a 20% return, which could prompt some profit-taking. It's also likely that commodity funds will look to book silver profits ahead of year-end.
However, I think the greatest near-term risk to the uptrend is revived concerns that the AI sector is overvalued. If such concerns are pushed to the fore again, the trade would anticipate a slowing of the build-out of data centers and AI infrastructure. NVIDIA's Q3 earnings beat pushed those worries to the back burner in November, but overvaluation risks linger.
The next upside target is well established at $59.966/$60.000. Beyond that, there's a very long-standing Fibonacci objective at $60.417 (127.2% retracement of the entire move from the 2011 high at $50 to the 2020 low at $11.703).
The early U.S. low at $57.839 protects the overseas low at $56.888. Thursday's low at $56.509 stands in front of the low for the week from 1-Dec at $56.232. Below the latter, former highs at $54.465/390 would be in play.
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 in the upper half of its range, buoyed by a weak dollar and strong silver 5-Day Change: +$46.53 (+1.12%) YTD Range: $2,607.16 - $4,381.21 52-Week Range: $2,585.51 - $4,381.21 Weighted Alpha: +61.08 Gold continues to consolidate in the upper half of its range, underpinned by rising rate cut expectations and a weaker dollar. Fresh record highs in silver provide additional support.  Monday's push to six-week highs has already returned considerable credence to the underlying uptrend, but the trade seems inclined to remain cautious and monitor incoming data leading up to next week's FOMC meeting. The Fed's favored measure of inflation comes out on Friday. New highs for the week above $4,264.30 would put the $4,275.46 Fibonacci level to the test. Above the latter, gold's all-time high at $4,381.21 would be back in play. Further out, $4,515.53 and $5,000 remain valid objectives. Tuesday's low at $4,164.99 now provides intervening support ahead of last Friday's low at $4,153.68. The rising 20-day moving average comes in at $4,122.12. SILVER OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.093 (-0.16%) 5-Day Change: +$5.007 (+9.39%) YTD Range: $28.565 - $58.974 52-Week Range: $28.565 - $58.974 Weighted Alpha: +107.63 Silver reached another all-time high, but the intraday rally faltered just shy of $59. The white metal has reached record levels in three of the last four sessions, buoyed by robust fundamentals, expectations for a rate cut next week, and a weaker dollar.  You can see on the chart that silver began the year just below $29. The price has more than doubled as of Monday! A Bloomberg article notes that silver gains have been amplified by robust industrial demand in sectors such as electric vehicles, solar panels, batteries, and electronics. That accounts for more than half of the total demand. On top of that, investors use it to hedge against inflation, political uncertainty, currency weakness, and heavy national debts, which have fueled massive ETF inflows exceeding 100 million ounces. John Ciampaglia, CEO of Sprott Asset Management, says, "Silver is the Rodney Dangerfield of the precious metals—it gets no respect." The more than 30% plunge in the gold/silver ratio from nearly a five-year high of 107.21 in April to a four-year low of 71.662 today suggests investors are finally coming to grips with the realities of supply and demand. While silver has retreated into the range intraday, the trade seems inclined to view short-term setbacks as buying opportunities. A hot PCE inflation number is probably the greatest risk for a more sustained correction ahead of next week's FOMC meeting. The delayed nature of that report arguably adds a degree of uncertainty to the market consensus of +0.3% m/m. Personally, I think the data will reflect sticky but not terribly troubling inflation. Nonetheless, it wouldn't be surprising to see some profit-taking ahead of the data. Today's intraday low at $57.567 provides an intervening support level ahead of Tuesday's low at $56.597 and the low for the week at $56.233. Below the latter, the next significant support is marked by the old high at $54.465. 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 pulled higher by surging silver, weaker dollar
OUTSIDE MARKET DEVELOPMENTS: U.S. consumers shrugged off inflation concerns and hunted early holiday deals, leading to the strongest Black Friday sales in history. Total sales were estimated $31.7 bln, a 4.1% increase over last year. Online spending alone hit a record $10.8 bln, up 9.8% year-over-year, according to Adobe Analytics.
Markets continue to eye the next week's FOMC meeting, and bets for a third consecutive rate cut have surged in recent weeks. The dovish pivot was driven by weaker – and perhaps dubious –incoming data and FedSpeak that suggested further easing was warranted. This offset last month's concerns about inflation and labor resilience. Fed funds futures currently put the probability of a 25 bp rate cut at 87.6%.
Fed Chairman Powell will participate in a panel discussion this evening at Stanford, where he may comment on the economic outlook and monetary policy. Technically, Powell's remarks would fall within the Fed's pre-FOMC meeting 10-day "quiet period." If he does comment, I suspect he will remain neutral, perhaps with a slight dovish tilt.
The BLS will not be reporting the November jobs data this week as the repercussions from the government shutdown continue to reverberate. October data were withheld entirely and will be rolled into November in a delayed release slated for 16-Dec. That will leave the market to focus on claims data, the ADP survey, and Challenger Layoffs this week.
S&P Global Manufacturing PMI was revised up to 52.2 in November, versus a 51.9 preliminary read and 52.5 in October.
Manufacturing ISM slipped to a four-month low of 48.2 in November, below expectations of 48.6, versus 48.7 in October. The employment gauge retreated to 44, below expectations of 47, versus 46 in October.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$27.47 (+0.65%)
5-Day Change: +$96.13 (+2.33%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,585.51 - $4,381.21
Weighted Alpha: +62.15
Gold extended to six-week highs on the first trading day of September, building on the nearly 1.5% monthly gain notched in November. The yellow metal is being buoyed by record highs in silver, expectations for further Fed easing, and a weaker dollar.
The breach of the 13-Nov high at $4,244.81 clears the way for a challenge of the $4,275.46 Fibonacci level. Above that, gold's all-time high at $4,381.21 would be back in play.
With silver charging higher into record territory, I do expect gold to follow suit. Beyond $4,381.21, focus would be $4,515.53 based on a Fibonacci projection, but such a move would also return considerable credence to the long-standing $5,000 objective.
The $4,207.09/$4,200.00 zone marks initial support. Friday's low at $4,153.68 is the more important short-term level to watch.
SILVER
OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.762 (+1.34%)
5-Day Change: +$6.940 (+13.51%)
YTD Range: $28.565 - $58.833
52-Week Range: $28.565 - $58.833
Weighted Alpha: +107.36
Silver has extended to new record highs for a second straight session, driven by expectations that the Fed will cut rates next week, a weaker dollar, and diminished worries about the AI sector. Silver posted its seventh straight monthly gain in November and is off to a great start in December. 
The white metal has gained more than 10% in just the last two sessions alone! Scope is seen for a short-term test of $60, which corresponds closely with a Fibonacci extension target at $59.966. Beyond that, there's a very long-standing Fibonacci objective at $60.417 (127.2% retracement of the entire move from the 2011 high at $50 to the 2020 low at $11.703).
Yes, the market is overbought, and corrections are likely to be violent, but buying into dips remains favored amid broadly supportive fundamentals. Hang onto your hats!
First support is marked by previous intraday highs $57.582/812. The $57 zone provides an additional intervening barrier ahead of today's Asian low at $56.232.
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.
