Blog posts tagged with 'gold'

Gold remains defensive on trade optimism

OUTSIDE MARKET DEVELOPMENTS: News of a "full and comprehensive" trade deal with the UK has stoked optimism that other deals may soon drop. The easing of trade tensions is stoking risk appetite. The fact that China and the U.S. will begin 

To be fair, a trade deal with the UK was the easy one. The U.S. typically runs a trade surplus with the UK (+$11.9 bln in 2024). Striking a deal with China will be far more difficult, but that talks are beginning is encouraging.

The EU is seeking public comment on $109 bln in retaliatory tariffs if ongoing negotiations fail to bear fruit. “Since the US imposed its unjustified and harmful tariffs, the EU has prioritized finding a mutually beneficial and balanced solution through negotiations,” the EU said in a statement.

This chart from Bloomberg, which was included in the World Gold Council's latest commentary, shows the unprecedented level of trade policy uncertainty. 

In a widely anticipated move, the Bank of England cut the bank rate by 25 bps to 4.25%. Amid ongoing uncertainty, MPC members had mixed views, with two members voting for a 50 bps cut and two favoring steady policy.

"Uncertainty surrounding global trade policies has intensified since the imposition of tariffs by the United States and the measures taken in response by some of its trading partners. There has subsequently been volatility in financial markets, and market-implied policy rates have moved lower. Prospects for global growth have weakened as a result of this uncertainty and new tariff announcements, although the negative impacts on UK growth and inflation are likely to be smaller." – Bank of England Monetary Policy Report

Meanwhile, Sweden's Riksbank and Norway's Norges Bank left rates unchanged. Both cited global trade uncertainty and expressed dovish leanings.

The Fed remained on pause when policy was announced yesterday. Chairman Powell acknowledged that solid economic fundamentals allow the Fed to continue playing the waiting game.

“The labor market is solid, inflation is low. We can afford to be patient as things unfold. There’s no real cost to our waiting at this point,” Powell said during his presser. President Trump called him a "fool" this morning on TruthSocial.

Q1 Productivity (preliminary) fell 0.8% on expectations of -0.6%, versus a revised +1.7% in Q4 (was +1.5%). ULC surged 5.7%, above expectations of +5.2%, versus a revised +2.0% in Q4 (was +2.2%).

Initial Jobless Claims fell 13k to 228k in the week ended 03-May, below expectations of 233k, versus 241k in the previous week. Continuing jobless claims fell 29k to 1879k in the 26-Apr week, versus a revised 1,908k in the previous week.

Wholesale Sales rose 0.6% in March, below expectations of +0.9%, versus a negative revised +2.0% in February (was +2.4%). Inventories rose 0.4% on expectations of +0.5%, versus a revised +0.5% in February (was +0.3%).


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$22.45 (-0.67%)
5-Day Change: +$115.14 (+3.56%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,287.64 - $3,495.89
Weighted Alpha: +47.31

Gold is trading lower for a second session after failing to sustain gains above $3,400 earlier in the week. Easing global trade jitters and a modestly firmer dollar are weighing on the yellow metal.



This week's powerful rebound stalled at the 78.6% retracement level yesterday. The subsequent retreat into the range suggests a period of consolidation is likely, but the dominant trend remains decisively bullish.

The World Gold Council cited "a significantly weaker US dollar and overall heightened risk" for driving gold to record highs in April. The WGC expects "US policy and structural risks to continue driving gold investment" moving forward. They acknowledge that "profit taking could bring pause but may also encourage consumers."

 

The WGC also noted strong ETF inflows as a driving force. "In Q1, gold ETFs amassed US$21bn of inflows – the strongest quarter in three years – with an additional US$11bn in April," the organization reported.

Despite the longer-term bullish prospects, today's breach of support at $3,318.27/11.82 (halfway back point of the recent rally, and  20-day MA) suggests scope for additional retracement towards $3,300. The 61.8% retracement level of the rally from $3,204.91 to $3,431.63 comes in a $3,291.52.

A rebound above intraday resistance at $3,365.93 would set a more favorable short-term tone, suggesting potential for renewed probes above $3,400.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$0.025 (-0.08%)
5-Day Change: -$0.005 (-0.02%)
YTD Range: $28.565 - $34.543
52-Week Range: $26.524 - $34.853
Weighted Alpha: +13.21

Silver is trading within yesterday's range. While trade optimism provides some underpinning, weakness in gold and a firmer dollar weigh.



The 50- and 20-day moving averages have converged at $32.690/698, and today's close in relation to those indicators could be telling. A close above would favor more tests above $33, while a close below would leave the white metal vulnerable to tests below $32.

It seems likely that a move back above $33 would invite further selling interest, leaving the 25-Apr high at $33.662 protected.

On the downside, Monday's low at $32.009 stands in front of the 100-day moving average at $31.793. Below the latter, the $31.195/114 level (200-day MA, halfway back point of the rally from $28.565) would be in play.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
pgrant@zanermetals.com
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 retreats into the range on trade optimism, awaits FOMC policy statement

OUTSIDE MARKET DEVELOPMENTS: Treasury Secretary Bessent will travel to Switzerland tomorrow to meet with Swiss President Karin Keller-Sutter.  "While in Switzerland, Secretary Bessent will also meet with the lead representative on economic matters from the People’s Republic of China (PRC)," according to the Department of the Treasury.

Markets are encouraged that China and the U.S. are set to begin talks, underpinning risk appetite. However, that's being counterbalanced by rising geopolitical tensions.

India fired missiles at what it called "terrorist infrastructure sites" within Pakistan, raising tensions between the two nuclear-armed neighbors. Pakistan claims to have shot down five Indian jets and drones and vowed further retaliation.

The U.S. and Houthi rebels in Yemen have reportedly reached a ceasefire agreement. Some see the deal as a precursor to nuclear talks with Iran.

The Houthis were quick to clarify that the ceasefire did not extend to Israel, and that those attacks would continue. “There is no turning back from supporting Gaza, no matter the cost," said Houthi leader Mahdi al-Mashat. Israel has struck key Yemeni infrastructure this week.

Russia and Ukraine continue to trade attacks, a day before a three-day ceasefire is slated to take effect. When recently asked about Ukrainian strikes on Russian territory, Putin ominously said: “There has been no need to use those (nuclear) weapons ... and I hope they will not be required.” 

The Fed is expected to remain on pause when it announces policy this afternoon. The statement and Chairman Powell's responses to questions will be dissected for clues as to when the next rate cut might occur. However, in light of recent tariff uncertainty, I expect the Fed to keep its cards close to the vest.

MBA Mortgage Applications rebounded 11.0% in the week ended 02-May after falling 4.2% in the previous week. The 30-year mortgage rate eased to 6.84% from 6.89% in the previous week.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$38.68 (-1.13%)
5-Day Change: +$100.35 (+3.05%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,287.64 - $3,495.89
Weighted Alpha: +49.53

Gold has retreated from the two-week high set early in the Asian session at $3,431.63 as news that the U.S. and China would hold trade talks this week in Switzerland sapped the haven bid. However, rising geopolitical risks are providing some underpinning.



This week's gains stalled just shy of the 78.6% retracement level of the decline from the record high. Nonetheless, the magnitude of the retracement thus far suggests that the corrective low is in place at $3,204.91.

However, progress toward a trade deal with China, or evidence that deals are being struck with other major trading partners, could put the yellow metal under heavier pressure within the range. This strikes me as a scenario where a symmetrical triangle (a series of lower highs and higher lows) is likely to form.

Such a pattern is considered a continuation pattern within the dominant trend. In the case of gold, the dominant trend remains decisively bullish. Further near-term attacks on the $3,500 level are anticipated, with longer-term potential still seen to $4,000.

Initial support is marked by the Asian low at $3,365.18. The more important zone to watch is $3,326.29/18.27/08.12, where Tuesday's low, the halfway back point of the recent rally, and the 20-day MA are all in close proximity.

 

Silver has once again failed to sustain gains above $33, despite optimism on the trade front and a fresh round of Chinese stimulus. While price action remains confined to yesterday's range, the fact that silver is underperforming gold is troubling.



The 50- and 20-day moving averages are being pressured at $32.677/636. A breach of this level would clear the way for a return to the $32.00 zone, which is highlighted by Monday's low at $32.009.

Silver may have to dip further into the range to gather itself for a more serious test of key highs above $34. A drop below $32 would shift focus to the 100-day MA at $31.777 initially, but potential at that point would be to $31.152/114, where the halfway back point of the rally from $28.565 corresponds with the 200-day MA.

I'm going to remain suspicious of upticks above $33 as long as 25-Apr high at $33.662 is intact. I see the upside as limited until the high for the year at $34.543 and the more important 22-year high from October at $34.853 are negated. I also want to see the gold/silver ratio fall back below 100.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
pgrant@zanermetals.com
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 surges back above $3,400 on revived haven interest

OUTSIDE MARKET DEVELOPMENTS: Risk is off amid revived tariff worries and heightened geopolitical tensions. U.S. shares are under pressure, and safe-haven demand has returned to the precious metals.

The Trump administration continues to profess that deals with some key trading partners are close at hand, but markets are growing impatient. Canadian PM Carney will meet with President Trump at the White House today.

President Trump signed an executive order on Monday that incentivizes the manufacture of pharmaceuticals in America. He said he would announce tariffs on imported pharmaceuticals within the next couple of weeks.

The threat of a 100% tariff on movies produced outside the U.S. is the latest surprise. Hollywood is understandably fretting over the implications, but broader market jitters are amplified as it suggests the Trump administration is not done throwing levies at the wall to see what might stick.

The U.S. trade balance reached a record wide deficit of -$140.5 bln in March as importers continued to front-run tariffs. This is likely to weigh on Q1 GDP revisions.

There is still an expectation of positive growth in Q2, but recent port data suggest both imports and exports have contracted significantly. “We haven’t seen anything like this since the disruptions of summer 2020,” said Kyle Henderson, CEO of trade tracker Vizion, in a CNBC article. That's going to boost recession worries.

Yields are under pressure after a strong 10-year auction with good domestic and foreign interest. Weakness in stocks is providing additional support for Treasuries. Softer yields are putting some pressure on the dollar.

Balance of Trade expanded to a record wide -$140.5 bln in March, outside expectations of -$136.7 bln, versus a revised -$123.2 bln in February (was -$122.7 bln).

RCM/TIPP Economic Optimism Index fell 1.2 points to a seven-month low of 46.0 in May, below expectations of 50.2, versus 49.1 in April. It was the third consecutive print below 50, indicating pessimism.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$50.06 (+1.50%)
5-Day Change: +$58.04 (+1.75%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,287.64 - $3,495.89
Weighted Alpha: +48.71

Gold reached two-week highs above $3,400, boosted by renewed risk aversion associated with tariff uncertainties and geopolitical risks. The dollar index weakened further within its recent range, providing some additional lift for the yellow metal.



More than 61.8% of the recent correction has now been retraced, and the 78.6% Fibonacci level at $3,433.62 has come within sight. Penetration of this level would lend confidence to the bullish scenario that calls for further attacks on the $3,500 zone.

Pending new record highs, focus would shift to $3,575.04 based on a Fibonacci extension. Such a move would also lend further credence to the longer-term $4,000 objective.

A new Gallup poll has gold supplanting stocks/mutual funds as the second-best long-term investment. Real estate remained at the top of the list for a twelfth straight year.

Of those surveyed, 23% picked gold as the best investment, up from 18% last year. Only 16% said stocks/mutual funds were the best long-term investment, down from 22% in 2024.

At least one major distributor noted stronger customer buying in April. "At FideliTrade, buying during the month increased enough to match the customer selling. This has not happened in over a year," according to their newsletter.

Heraeus reports that investment demand remains robust, citing a 170% year-over-year increase in bar and coin demand in Q1. This is offset to a large degree by a marked drop in jewelry demand associated with record-high prices.

The low from early in today's U.S. session at $3,375.20 marks initial support. Secondary support is at $3,326.29 (today's Asian low).  The rising 20-day moving average is at $3,291.18 today and should climb above $3,300 this week.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$0.532 (+1.64%)
5-Day Change: +$0.152 (+0.46%)
YTD Range: $28.565 - $34.543
52-Week Range: $26.524 - $34.853
Weighted Alpha: +16.51

Silver is back above $33, buoyed by strength in gold and a weaker dollar. The white metal is defying ongoing trade and global growth worries, but the market has struggled above $33 in recent weeks.



Last week's high at $33.471 protects the high from the previous week at $33.662. Beyond that, formidable barriers are marked by the high for the year at $34.543 (28-Mar) and the 22-year high from October at $34.853.

Failure to sustain gains above $33 would leave silver vulnerable to a retreat below $32. The convergence of the 50- and 20-day MAs at $32.661/551 offers a good intervening barrier ahead of Monday's low at $32.009.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
pgrant@zanermetals.com
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 regains $3,300 on rising geopolitical tensions

OUTSIDE MARKET DEVELOPMENTS: Houthi rebels in Yemen fired a ballistic missile on Sunday that struck near Tel Aviv's Ben Gurion airport. The famed Iron Dome defense system failed to intercept the projectile. Israel has vowed retaliation.

Also over the weekend, Israel's security cabinet voted unanimously to ramp up operations in Gaza. The plan is now to capture and reoccupy the entire Gaza Strip.

"The plan will include, among other things, the capture of the Strip and holding the territories, moving the Gazan population south for its defence, denying Hamas the ability to distribute humanitarian supplies, and powerful attacks against Hamas," the official said.

The UN has scheduled a high-level meeting for June to discuss a two-state solution to the Israeli-Palestinian conflict. A couple of weeks ago, UN Secretary-General Guterres worried that “the promise of a two-state solution is at risk of vanishing altogether." That opportunity may indeed be gone.

President Trump continues to suggest that deals are in the offing with some key trading partners. He also hinted at walking back tariffs on China during an interview on Meet the Press. “At some point, I’m going to lower them, because otherwise, you could never do business with them, and they want to do business very much,” Trump said.

However, Trump indicated he had no plans at this time to speak directly with Xi Jinping. This has the market worried that the trade war between the U.S. and China will continue for some time.


S&P Global Services PMI was revised down to 1 17-month low of 50.8 in the final read for April, versus 51.4 flash and 54.4 in March.

Services ISM rose 0.8 points to 51.6 in April, above expectations of 50.2, versus 50.8 in March. Prices jumped 4.2 points to a six-month high of 65.1, versus 60.9 in March.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$72.53 (+2.24%)
5-Day Change: -$27.19 (-0.81%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,287.64 - $3,495.89
Weighted Alpha: +45.18

Gold rebounded back above $3,300, buoyed by heightened geopolitical tensions, persistent trade uncertainty, and a softer dollar. The yellow metal is up more than 2% to start the week.



Last week, the yellow metal notched its first lower weekly close in four. Today's price action remains confined to last week's range thus far, with a minor chart point at $3,323.15 protecting the more important $3,351.87 level.

Penetration of the latter would constitute a more than 50% retracement of the correction off the $3,495.89 all-time high from 22-Apr. At that point, focus would shift to the 61.8% and 78.6% retracement levels at $3,384.74 and $3,433.62, respectively.

Recent losses are considered corrective within the dominant uptrend. Successive violations of these resistance levels heighten the likelihood of further attacks on the $3,500 zone. Above that, the next Fibonacci objective is at $3,575.04.

Goldman Sachs believes gold will continue to outperform silver due to ongoing central bank demand. Official sector demand has increased fivefold since Russian assets were frozen in 2022, and that trend seems likely to continue.

"With Chinese solar production now slowing amid oversupply, high recession risk, and central bank gold buying remaining strong in 2025, we expect gold to continue out-glittering silver," the bank said.

Goldman believes gold is in a structural bull market with potential to $3,700 by year-end, and $4,000 by mid-2026. If the U.S. slips into recession, safe-haven flows could drive gold to $3,880 this year.

On the downside, first supports are $3,300.00 and 3,289.15. The latter is bolstered by the midpoint of today's range at $3,280.43 and protects today's Asian low at $3,239.98.

Silver is trading higher to start the week, underpinned by renewed strength in gold and a softer dollar. However, the white metal's recent struggles above $33 suggest that at least the short-term tone is consolidative in the upper half of this year's range.



Ongoing tariff uncertainty and concerns about oversupply in the solar market are seen as headwinds for silver. So too are fading prospects for a Fed rate cut this summer, despite pressure from the White House for monetary easing.

A failure to reclaim the 33-handle would bode well for further tests below $32. Last week's low at $31.762 corresponds closely with an important retracement level and the 100-day moving average. A push below the $31.763/727/715 area would shift focus to the convergence of the next tier of Fibonacci support and the 200-day MA at $31.124/114.

Fresh five-week highs above $34.662 are needed to return focus to the high for the year at $34.543 and the more important 22-year high from October at $34.853.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
pgrant@zanermetals.com
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.