Blog posts tagged with 'palladium'

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.

Gold jumps back above $3,400 on haven bid as Israel launches attacks on Iran

OUTSIDE MARKET DEVELOPMENTS: Israel has launched attacks against Iranian nuclear facilities, program scientists, and military leadership. The initial strikes came a day after the UN's nuclear watchdog confirmed that Iran was not complying with its nonproliferation obligations.

"I've made it clear time and again: Israel will never allow those who call for our annihilation to develop the means to achieve that goal," said Israeli Prime Minister Netanyahu. "We will not let the world’s most dangerous regime get the world’s most dangerous weapons. And Iran plans to give those weapons -- nuclear weapons! -- to its terrorist proxies," he added.

U.S. Secretary of State Marco Rubio stated that America was not involved in the attacks. However, Iran did threaten to strike back at U.S. bases in the Middle East if it were attacked. President Trump is meeting with the National Security Council today, and U.S. military assets are being repositioned in the region.

At this point, it's unclear if planned talks in Oman this weekend between the U.S. and Iran will proceed. President Trump indicated via TruthSocial that there's still an opportunity for Iran to make a deal.

However, Iran has vowed a 'powerful response' to Israel's attacks, so the risk of escalation seems considerable. CBS reports that Tehran launched more than 100 drones against Israel, but Iranian retaliation has been limited thus far.

Markets don't appear to be terribly concerned. While initial reports of the attacks swung market sentiment to risk-off, risk appetite has since rebounded.

The dollar got an initial boost on haven interest, but those gains have since moderated. While still higher on the day, the dollar index is poised for a significantly lower weekly close after reaching three-year lows on Thursday.

Michigan Sentiment rebounded to a four-month high of 60.5 in the preliminary reading for June, above expectations of 52.5, versus 52.2 in May. "All five index components rose, with a particularly steep increase for short and long-run expected business conditions, consistent with a perceived easing of pressures from tariffs," according to the survey.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$6.47 (+0.19%)
5-Day Change: +$120.12 (+3.63%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,295.86 - $3,495.89
Weighted Alpha: +49.61

Gold surged to a seven-week high of $3,444.29 overnight as IDF strikes on Iran sparked a strong haven bid. The yellow metal is poised for a third straight daily gain and a second consecutive higher weekly close.



Gold's response to Israel's attack was arguably pretty tepid, perhaps because of Iran's limited retaliation thus far, and the bounce in the dollar. However, as long as the current Iranian regime remains in power, more aggressive retaliation seems likely.

That would stoke already elevated geopolitical risk. If retaliation includes attacks on U.S. bases in the region, the situation could become very spicy, very fast.

Today's price action constitutes an upside breakout of the symmetrical triangle formation, and more than 78.6% of the correction has been retraced. This shifts the technical focus decisively back in favor of the dominant uptrend.

Fresh record highs would shift focus to the $3,596.20 Fibonacci objective initially, while also lending additional credence to the $4,000 target. The early-U.S. high at $3,444.29 marks first resistance.

An intraday low at $3,411.08 marks first support, which protects $3,401.81/$3,400.00. A breach of today's low at $3,381.08 after this significant uptick in Middle East risks would leave gold vulnerable back to the $3,300 zone.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$0.156 (-0.43%)
5-Day Change: +$0.237 (+0.66%)
YTD Range: $28.565 - $36.875
52-Week Range: $26.524 - $36.875
Weighted Alpha: +26.62

Silver is consolidating above $36 and is on track for a second straight higher weekly close after reaching a 12-year high of $36.875 on Monday. The white metal is being underpinned by gold's strength, a generally weak dollar, heightened expectations for easing, optimism on trade, and improved consumer sentiment.



In the wake of last week's range breakout, the focus remains squarely on the upside with sights now on the February 2012 high at $37.430. A breach of this level would bode well for a push to the next Fibonacci projection at $38.750. Such a move would bring $40 within striking distance.

On the downside, $36.00/$35.948 defines first support and protects the low for the week at $35.656. The 20-day moving average is well protected at $34.452.


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 firms on heightened haven interest and a weak dollar

OUTSIDE MARKET DEVELOPMENTS: The UN's nuclear watchdog organization has ruled that Iran is, in fact, in violation of its non-proliferation obligations. Iran responded angrily, threatening to escalate its enrichment activity.

The UN finding raises the risk of Israeli attacks on Iran's nuclear facilities. Iran has threatened to target U.S. bases in the Middle East if it is attacked, and would most certainly retaliate against Israel.

Market sentiment has swung to risk-off, and oil prices rose. Acknowledging the heightened risks, President Trump said the U.S. was moving personnel out of the Middle East because it "could be a dangerous place." More talks between the U.S. and Iran are slated for this weekend in Oman, but hopes for a deal are fading.

A day after trade tensions cooled between the U.S. and China, President Trump reminded the world that the pause on reciprocal tariffs is mere weeks away. "At a certain point, we're just going to send letters out ... saying, 'This is the deal. You can take it, or you can leave it,'" Trump said.

The PPI report confirmed that inflation remained subdued in May, a day after CPI data revealed the same. Rate cut expectations for the remainder of the year edged back above 50 bps, with the first 25 bps cut priced 

Looking ahead to next week's FOMC meeting, cooler inflation allows the Fed to lean more dovish, but the central bank will stay on hold amid ongoing tariff and growth uncertainty. Nonetheless, any move on rates next week seems highly unlikely.

The tilt toward dovishness, along with heightened geopolitical and trade tensions, has weighed on the dollar. The dollar index fell to a more than three-year low of 97.60.

PPI rose a scant 0.1% in May, below expectations of +0.2%, versus -0.5% in April; 2.6% y/y, up from 2.4% in April. Core +0.1%, below expectations of +0.3%, versus -0.4% in April; 3.0% y/y, versus 3.1% in April.

Initial Jobless Claims were steady at 248k in the week ended 6-Jun, above expectations of 241k. Continuing claims surged 54k to 1,956k in the 31-May week, the highest since November 2021.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$9.30 (+0.28%)
5-Day Change: +$32.97 (+0.98%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,295.86 - $3,495.89
Weighted Alpha: +46.91

Gold reached a new high for the week, buoyed by heightened haven interest and three-year lows in the dollar. While the yellow metal remains confined to the range within the range, a more bullish short-term bias is emerging.



A breach of last week's high at $3,401.81 is needed to put the record high back in play. A Fibonacci level at  $3,416.97, as well as the May highs at $3,431.46/63 provide additional intervening barriers.

A convincing push above $3,400 would bode well for an upside extension to the $3,596.20 Fibonacci objective, and bolster confidence in the scenario that calls for an eventual challenge of $4,000.

The ECB reports that gold has overtaken the euro as the second-largest reserve asset. According to the ECB's annual currency assessment, as of the end of 2024, gold accounts for nearly 20% of official global reserves, while euro reserves stand at 16%.

The dollar remains the dominant reserve asset at 46%. However, a trend toward de-dollarization accelerated in recent years amid concerns about U.S. weaponization of the greenback.

Today's Asian low at $3,344.27 marks first support. The 20-day moving average bolsters Wednesday's low at $3,320.62 and protects Monday's low at $3,297.69. The 50-day MA has risen to $3,282.15, providing additional support in this zone. The 29-May low at $3,251.28 is considered key short-term support and appears to be well protected at this point.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$0.046 (-0.13%)
5-Day Change: +$0.600 (+1.68%)
YTD Range: $28.565 - $36.875
52-Week Range: $26.524 - $36.875
Weighted Alpha: +26.76

Silver traded back below $36 as the gold/silver ratio continued to rebound from the 90 support zone. However, the white metal recovered intraday with help from increased haven interest, strength in gold, and a weak dollar.



I offered some words of caution in yesterday's commentary, noting that Friday's low at $35.654 was the "more significant level to watch." Today's low is $35.656 and the short-term significance of this support level has been reinforced.

Last week's major range breakout is the dominant technical feature on the silver chart. Sights are set on the February 2012 high at $37.430, with intervening barriers noted at 36.632 and 36.820/875.

An eventual push to 13-year highs above $37.430 would lend credence to a Fibonacci projection at $38.750, and make $40 increasingly attractive.


PLATINUM

I wrote much of the following in response to a request for comment on platinum from Reuters this morning. Platinum surged above $1,200 this week, a level last seen in June of 2021. 

The supply side of the platinum market is in turmoil, and a third straight year of deficit is expected. Infrastructure in South Africa – the world’s largest source of platinum – is a hot mess. That, along with labor strife, has adversely impacted mining operations.

This seems unlikely to resolve anytime soon amid weak growth, high unemployment, and plunging foreign investment stemming from political instability and policy uncertainty. The U.S. has already cut aid to South Africa, and sanctions are reportedly being considered.

Tensions between Russia and the West are rising as the war in Ukraine drags on, increasing the likelihood of more sanctions against the world’s second-largest producer of platinum. Russian platinum production has not been included in sanctions thus far, but that could change if new punitive measures are deployed.

Meanwhile, adoption of electric vehicles has slowed significantly, implying heightened demand for conventional vehicles with the added possibility of higher catalyst loading to reduce emissions. Catalytic converters for ICE vehicles are the biggest source of platinum demand. Additionally, record-high gold prices have shifted some jewelry demand to platinum.  

I see potential to the 2021 high at $1339.35 initially. A breach of this level would establish 11-year highs and shift focus to $1,500, supported by the aforementioned supply/demand fundamentals.

We’ll see technical corrections as platinum is a very small and thinly traded market. However, the South African problems are going to persist for some time, perhaps resolved only with political upheaval. Meaningfully increasing output in Zimbabwe, Canada, and the U.S. would take years, if not decades.

A peace deal between Russia and Ukraine would reduce tensions and instability in the market, but wouldn’t materially move the needle on supply.

It seems supply is destined to remain constrained for the foreseeable future. Any tempering of the price rise will likely have to come from the demand side. Palladium is the obvious substitute, but Russia and SA are the biggest suppliers of that metal as well.

Revived EV interest is perhaps the best bet for reducing PGM demand. Technological improvements might do that, but the quicker path would be higher government subsidies. I'm not sure there's much appetite for that right now. In fact, the pendulum seems to be swinging the other way.

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.