Blog posts tagged with 'palladium'

Gold rebounds from Tuesday's setback, buoyed by haven interest, softer dollar, surging silver

OUTSIDE MARKET DEVELOPMENTS: Last night's State of the Union address added to already high levels of uncertainty, particularly in financial markets and among investors. The lengthy speech – the longest on record at nearly 1 hour 48 minutes – focused heavily on touting economic victories, immigration enforcement, and patriotism while defending aggressive tariff policies amid recent legal setbacks. The address offered no major surprises to calm nerves, instead reinforcing an unpredictable policy landscape ahead of midterms.

President Trump reaffirmed his plan to impose temporary global tariffs of 15% under an alternative authority after the Supreme Court struck down the prior broader regime. This has amplified existing trade policy volatility, with analysts noting renewed jitters over potential higher costs for businesses and consumers, supply chain disruptions, and retaliatory actions from trading partners.

Trump emphasised his desire for a diplomatic resolution with Iran, but his address was laced with threats and red lines. A third round of indirect talks begins in Geneva on Thursday. Meanwhile, the U.S. continues to build up military forces within striking distance of Iran, described as the most significant since the 2003 Iraq invasion 

Nonetheless, the market is in risk-on mode today as attention turns to NVIDIA's highly anticipated earnings report after the market close. NVIDIA is viewed as a bellwether for the AI sector, and analysts are anticipating massive profit growth, perhaps as high at +70% y/y. This would bolster broader AI sentiment, at least temporarily alleviating overvaluation concerns as a headwind.

Yesterday's better-than-expected consumer confidence report is helping the cause. “Confidence ticked up in February after falling in January, as consumers’ pessimistic expectations for the future eased somewhat,” said Dana M Peterson, Chief Economist at The Conference Board.

This week's chaos in Mexico – stemming from the killing of a cartel kingpin and that cartel's retaliation – has largely subsided, with flights resuming, public transportation reopening, and the U.S. State Department declaring conditions "returned to normal." However, experts are warning of potential lingering instability stemming from ongoing power struggles within the cartel.

Japan PM Takaichi has nominated two dovish academics to the Bank of Japan board, which heightened concerns that further interest rate hikes by the BOJ would be delayed or limited. This put additional pressure on the yen, after Takaichi expressed reservations earlier this week about further rate increases.

Yen weakness is helping to underpin the dollar. Nonetheless, gains in the dollar index since the late-January low are still seen as corrective within the longer-term downtrend.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$37.67 (+0.73%)
5-Day Change: +$224.66 (+4.51%)
YTD Range: $4,310.83 - $5,595.02
52-Week Range: $2,835.23 - $5,595.02
Weighted Alpha: +86.67

Gold has rebounded from Tuesday's setback amid ongoing trade and geopolitical risk, with help from a softer dollar and soaring silver. The yellow metal remains confined to yesterday's range at this point, but the underlying fundamentals and technicals are broadly positive.

 

While dollar strength poses a short-term headwind, a breach of Tuesday's high at $5,259.54 would bode well for an upside extension to $5,300 and the $5,340.72 Fibonacci level (78.6% retracement). An eventual penetration of the latter would go a long way toward confirming potential for new all-time highs above $5,595.02.

Previously established objectives at $5,675.25, $5,700, $5,800 remain valid. A newer Fibonacci projection at $5,918.25 would draw gold within striking distance of $6,000. 

With gold tracking above the important moving averages, setbacks within the well-established range are likely to be viewed as buying opportunities. However, short to near-term volatility is likely to remain a challenge.

Today's overseas low at $5,127.41 marks first support. The more important levels to watch are the low for the week from Tuesday at $5,097.51 and the 20-day moving average at $5,011.75.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$3.323 (+3.81%)
5-Day Change: +$13.431 (+17.40%)
YTD Range: $64.140 - $121.630
52-Week Range: $28.565 - $121.630
Weighted Alpha: +214.41

Silver has surged to trade back above $90 for the first time in four weeks, spurred by persistent haven interest, revived optimism about the tech/AI sector, unrest in Mexico, and a weaker dollar. The white metal is already up nearly 8% this week, on the heels of a more than 9% gain last week.


 
Strong earnings from NVIDIA after the close today will likely perpetuate the rebound in silver, which favors a challenge of $92.885, the midpoint of the huge $121.630/$64.140 range. The high for February at $92.186 provides an intervening barrier.

If silver can clear the halfway back point of the January/February plunge, a return to the $100 zone becomes likely. This level is reinforced by the 61.8% retracement level at $99.668.

According to Heraeus, the Perth Mint’s sales of silver bars and coins surged 188% m/m in January, to 1.7Mmoz, while gold sales fell by 19% to 29koz. This is "consistent with price-sensitive retail buyers jumping into silver as it outperformed gold during the price rally."

Certainly, those retail customers were rattled by the subsequent rout, but physical buyers tend to have more conviction than investors in paper (digital) representations of precious metals. They are likely to be reemboldened upon a rebound above $100.

Heraeus also noted that Hecla Mining Company "is leaning harder into its 'silver-first' positioning." Hecla agreed to sell its 
Casa Berardi gold mine in Quebec, Canada, along with nearby exploration properties, to Orezone Gold Corporation. Hecla CEO Rob Krcmarov described it as an "important milestone" to concentrate capital and operations on "world-class silver assets" for better returns on invested capital and long-term value creation.

There seems to be a growing commitment to continued silver outperformance. The rebound in the gold/silver ratio stalled above 70, and signs of renewed weakness are evident. The ratio is trading below 58 today. A move below 50 would bode well for a retest of the January low at 43.573, with potential as low as the 31.707 low from 2011.


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.

Good morning. The precious metals are higher in early U.S. trading.

U.S. calendar features MBA Mortgage Market Index, EIA Data. FedSpeak due from Barkin and Musalem.

Gold and silver extend to multi-week highs on haven bid

Outside Market Developments: Last week's Supreme Court ruling against the Trump administration's use of the International Emergency Economic Powers Act to impose sweeping tariffs is stoking uncertainty and risk aversion at the start of the week. Trump blasted the ruling as "terrible" and "extraordinarily anti-American," and quickly announced he would impose a new temporary 15% global tariff on all imports using an alternative legal authority.

Treasury Secretary Bessent downplayed the ruling's impact, framing it as narrow and technical rather than a rejection of Trump's tariff strategy overall. He did acknowledge a loss of leverage, but went on to say, "in a way, they have made the leverage that he has more draconian" because the ruling affirmed the president's authority for a "full embargo" or product-line cutoffs if no revenue is generated.

SCOTUS punted on the issue of refunding the $130-$175 billion in tariff revenue generated thus far. That burning question will likely be resolved in the lower courts, but it will take months or perhaps even longer.

Tensions between the United States and Iran remain extremely high, with the situation teetering between last-ditch diplomacy and the credible threat of U.S. military action. The core issue is Iran's nuclear program, where the Trump administration demands zero uranium enrichment on Iranian soil, curbs on ballistic missiles, and reduced support for regional proxies—demands Tehran has largely rejected so far.

A third round of indirect negotiations is scheduled for later this week in Geneva. Iran is expected to present a detailed counterproposal soon, but the 86-year-old Supreme Leader is widely regarded as recalcitrant when it comes to U.S. demands.

Mexico is experiencing widespread violence and chaos following the killing of the leader of the powerful Jalisco New Generation Cartel during a Mexican military operation on Sunday, aided by U.S. intelligence. The cartel retaliated with coordinated attacks – torching buses, businesses, and clashing with security forces – resulting in dozens of deaths. 

The U.S. State Department has directed American citizens in affected areas of Mexico to shelter in place amid fears of escalating unrest. If any Americans are harmed or kidnapped, Trump would likely respond with intense pressure on the Mexican government, and arguably, direct military intervention against cartel assets would be on the table.

State of the Union addresses are not typically big market movers. However, in light of everything going on right now, tomorrow night's speech before Congress has the potential to further stoke uncertainty. Trump will tout economic gains, affordability measures, cartel crackdowns, and his success in sealing the southern border. He will likely defend his tariff policies and aggressive immigration enforcement, while also addressing foreign policy hotspots and heightened trade tensions.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$42.93 (+0.84%)
5-Day Change: +$220.09 (+4.41%)
YTD Range: $4,310.83 - $5,595.02
52-Week Range: $2,835.23 - $5,595.02
Weighted Alpha: +87.27

Gold begins the week on the bid, buoyed by ongoing haven interest and a slightly easier dollar. The yellow metal has extended to more than three-week highs, trading above $5,200 for the first time since the 30-Jan plunge.



Following Friday's close above the 20-day moving average, more than 61.8% of the entire decline from $5,595.02 has now been retraced. The technical improvement and the winding down of the Lunar New Year holiday in Asia are likely to embolden the bull camp. The next levels to watch on the upside ar $5,300 and $5,340.72 (78.6% retracement).

Asian markets dominate global physical gold flows. As traders and investors return from holiday, we're already hearing rumblings of tight physical supply that would be price supportive.

Net ETF inflows were a scant 2.5 tonnes last week, reflecting a tentative investor base and diminished Asian interest during the holiday. The North American region was responsible for 3.1 tonnes of inflows, Europe saw modest outflows, and Asia was unchanged.

  

Today's early U.S. low at $5,152.56 protects more substantial support at $5,107.62/05. The rising 20-day moving average at $5,024.65 will remain significant on a close basis.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.963 (+2.32%)
5-Day Change: +$11.719 (+15.29%)
YTD Range: $64.14 - $121.630
52-Week Range: $28.565 - $121.630
Weighted Alpha: +203.76

Silver is up more than 2%, driven by safe-haven interest and a softer dollar. The white metal is getting an additional boost from the chaos in Mexico that has raised concerns about supply disruptions.



Mexico is the world's largest producer of silver, accounting for roughly 25% of global mine output. Mexico produced approximately 6,300 metric tonnes of silver in 2024, and production is expected to remain steady to slightly higher through 2026. 

Friday's close above the 50-day MA was encouraging, shifting focus to the $86.233/287 (11-Feb high and 20-day MA). With the latter now definitely exceeded as well, sights are now on $90, $92.186 (04-Feb high), and the halfway back point of the Jan/Feb decline at $92.885.

A rise into the upper half of the range is needed to revive confidence in the long-term uptrend. While extreme volatility is likely to persist for the foreseeable future, I suspect the bulls will now buy on dips with a little less trepidation. Minor supports at $88, $87.420, and $85.741/586 stand in front of the more important $84.730/625 zone.


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 poised for higher weekly closes on haven bid

OUTSIDE MARKET DEVELOPMENTS: The Fed's favored measure of inflation accelerated in December, reinforcing the recent more hawkish tilt on policy expectations. Sticky inflation has kept policymakers cautious, prompting a "higher for longer" stance on rates and even discussions of potential hikes if price pressures fail to ease meaningfully.

The PCE price index rose 0.4%, above expectations of +0.3%, versus +0.2% in November. The annualized rate edged up to 2.9% from 2.8% previously. Core PCE also rose 0.4% m/m, on expectations of +0.3%, versus +0.2% in November; 3.0% y/y versus 2.8% in November. 

Advance Q4 GDP disappointed at just 1.4%, well below the consensus of 3.0%, versus 4.4% in Q3. The protracted government shutdown late last year weighed. Slowed growth provides a counterbalance to the price risks noted above. Certainly, the White House will keep pressure on the Fed to resume its easing campaign.

Fed funds futures continue to suggest 50 bps of easing this year. However, that first 25 bps cut is no longer fully priced for September.

The Supreme Court has ruled 6-3 against the Trump administration's use of the International Emergency Economic Powers Act to impose sweeping tariffs. This represents a major setback for the White House, potentially requiring billions in refunds to importers, disrupting global trade deals, and creating substantial uncertainty.

Arguably, Trump has been testing the limits of executive power in the first year of his second term. This ruling reaffirms Congress's exclusive authority over tariffs, shifting power back to the legislative branch and limiting the president's unilateral trade actions.

The Trump administration is likely to respond by swiftly shifting to alternative legal authorities to reimpose or replace the invalidated tariffs, aiming to retain as much of the existing trade policy as possible through targeted national security investigations or unfair trade probes.

Pivoting to alternative tariff authorities could at least temporarily mitigate the risk of a widening trade deficit during this transition period. Additionally, countries and companies that committed to major U.S. investments as part of prior trade negotiations might face retaliation if they begin to backtrack on or delay those pledges.

Tensions between the U.S. and Iran continue to ratchet higher. President Trump delivered an ultimatum on Thursday, giving Tehran 10 to 15 days to reach a "meaningful" nuclear deal addressing its enrichment activities, ballistic missiles, and proxy support, or face unspecified "really bad things," presumed to include military strikes.

A massive U.S. military buildup in the Middle East involving multiple carrier strike groups, fighter jets, and other assets is ongoing. In response, Iran has conducted joint naval drills with Russia in the Gulf of Oman and Strait of Hormuz, fortified its nuclear and military sites, issued warnings of retaliation against U.S. bases or a "regional war" if attacked, and signaled defiance while keeping limited diplomatic channels open for any ongoing diplomacy.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$21.28 (+0.43%)
5-Day Change: +$13.02 (+0.26%)
YTD Range: $4,310.83 - $5,595.02
52-Week Range: $2,835.23 - $5,595.02
Weighted Alpha: +77.54

Gold is setting new highs for the week, as high geopolitical risks and trade uncertainty stemming from today's SCOTUS decision stoke haven interest. Diminished easing expectations and the stronger dollar pose headwinds, but the yellow metal appears to be on track for a third straight higher weekly close.



A close today back above the midpoint of the range and the 20-day moving average would provide some encouragement to the bull camp for the week ahead. Scope would be for renewed tests above $5,100.

A breach of last week's high at $5,117.94 is needed to put the next retracement level at $5,141.08 back in play. Above the latter, focus would shift to $5,200 and the 78.6% retracement level at $5,340.72. 

On the downside, the early U.S. low at $5,007.42 fortifies the $5,000 zone, protecting the overseas low at $4,985.34. Thursday's low at $4,960.86 provides an additional tier of support ahead of the lows from earlier in the week at $4,855.15/$4,847.74.

The new level of broad uncertainty associated with today's SCOTUS decision, along with the risk for armed conflict with Iran, setbacks in the range are likely to be viewed as buying opportunities. This lends credence to the scenario that suggests the corrective low is on at $4,406.69 and the long-term uptrend will ultimately reassert itself.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.924 (+2.45%)
5-Day Change: +$4.699 (+6.07%)
YTD Range: $64.140 - $121.630
52-Week Range: $28.565 - $121.630
Weighted Alpha: +170.17

Silver has moved decisively back above $80, buoyed by spillover haven interest. Moves in the white metal often amplify those of gold in such environments due to its higher beta. Silver is poised for its first higher weekly close in four weeks.



A close above the 50-day moving average at $82.028 today would be a bullish technical signal, putting the more important $86.233/287 level in play, where the 11-Feb high corresponds with the declining 20-day moving average. Penetration of the latter in the week ahead would shift focus to $92.186 (04-Feb high) and the halfway back point of the Jan/Feb decline at $92.885.

An eventual move into the upper half of the range would go a long way toward confirming $64.140 as the corrective low. However, I suspect silver will be relegated to choppy trade within the extraordinarily wide $121.630/$64.140 range for some time to come, even as gold moves on to new all-time highs.


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 rebounds from losses early in the week to probe back above $5,000

Outside Market Developments: Risk appetite is elevated as fears of "AI disruption" have abated once again. Arguably, the tech/AI overvaluation trade is overdone, and the announced multiyear, strategic partnership between Meta Platforms and Nvidia has helped foster a more balanced view of the sector.

The Munich Security Conference (held February 13 - 15) also provided some lift for the sector, albeit a result of rising concerns, by highlighting the erosion of the post-1945 rules-based international order. The conference report specifically cited "wrecking-ball politics," including U.S. tariffs, trade coercion, wavering Ukraine support, and transatlantic strains. This is likely to prompt Europe to accelerate defense spending, industrial capacity buildup (especially in drones, AI, and tech), and greater strategic autonomy, which has boosted European defense stocks and related sectors.

The conference reinforced expectations for heightened geopolitical risks and global market uncertainty, and warned that the U.S. abandoning benign hegemony could further erode the dollar's reserve currency status. This will lead to broader headwinds for global growth-sensitive assets, while underpinning safe havens like gold.

The dollar peaked in September 2022 as pandemic concerns waned, and the dollar index hit four-year lows in late January amid a rising interest in global de-dollarization. While the greenback is garnering some support from less dovish Fed expectations, the dollar's trend still looks pretty bearish.

The trade was eagerly anticipating today's release of the FOMC minutes from the January meeting. The committee voted 10-2 in favor of holding rates steady at 3.50% - 3.75% after three 25 bps cuts in late 2025. Participants were divided on the future path, with several indicating that further cuts would depend on inflation declining as expected. In contrast, others favored maintaining rates for some time or even considering hikes if disinflation stalls.

The tone of the minutes is deemed to be mildly hawkish, emphasizing patience and a "wait-and-see" approach to assess incoming data and the effects of prior easing. Nonetheless, Fed funds futures continue to reflect expectations for 50 bps in easing by year-end, with the next rate cut not fully priced until September.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$35.44 (+0.73%)
5-Day Change: -$105.84 (-2.08%)
YTD Range: $4,310.83 - $5,595.02
52-Week Range: $2,835.23 - $5,595.02
Weighted Alpha: +73.83

Gold has recovered from the losses earlier in the week, probing back above $5,000. The yellow metal is getting support from bargain hunting on dips, and haven interest stemming from global concerns expressed at the Munich Security Conference. The yellow metal is shrugging off the slightly more hawkish tilt of the Fed minutes and a firmer dollar amid diminished volumes during the Lunar New Year holidays in Asia.



While I suspect short-term volatility within the range will persist, a close back above the midpoint of that range at $5,000.85 and the 20-day moving average at $5,004.95 would provide some encouragement for the bull camp. Such a close would bode well for further tests above $5,100.

A breach of last week's high at $5,117.94 is needed to put the next retracement level at $5,141.08 back in play. Above the latter, focus would shift to $5,200 and the 78.6% retracement level at $5,340.72.

Global ETFs saw net inflows of 14.8 tonnes last week, with Europe and Asia leading the charge at +5.6 and +5.5 tonnes, respectively. Perhaps, surprisingly, there has been just a single week of net outflows (so far) in the wake of the recent massive surge in volatility. This suggests some degree of investor resilience.



Failure to sustain and extend gains above $5,000 into the end of the week would send the bulls back to the sidelines to await their next buying opportunity. Intraday support at $4,906.74 protects the lows from earlier in the week at $4,855.15/$4,847.74. New lows for the week would target $4,800 initially, but potential at that point would be to the 06-Feb low at $4,656.30.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.925 (+2.62%)
5-Day Change: -$7.560 (-8.97%)
YTD Range: $64.14 - $121.630
52-Week Range: $28.565 - $121.630
Weighted Alpha: +146.19

Silver has recovered from the drop earlier in the week to a two-week low of $72.092, buoyed by revived AI/tech sector optimism and perhaps a bit of haven interest as well. The white metal has set a new high for the week, but today's nearly $6 range reflects persistent volatility, warranting ongoing caution.



The next level of resistance is marked by the 13-Feb high at $79.330. A breach of this level would favor tests back above $80, with potential to the 50-day MA at $81.339. More important resistance is presently well protected at $86.287 (11-Feb high), which should correspond closely with the declining 20-day MA by early next week. An eventual penetration would shift attention to the halfway back point of the decline at $92.885.

At this point, a return to the $70 zone can not be ruled out. Minor supports at $75.349 and $74.002/000 stand in front of the recent lows at $72.336/092.

The iShares Silver Trust (SLV) – the primary and largest silver ETF – has seen significant outflows. Those outflows are estimated to be in the $400–$800M range based on available recaps. This reflects an investor base that got steamrolled in recent weeks and is unlikely to return unless they sense a real bargain, or renewed strength convinces them of the potential for a move back above $100.


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.

Good morning. The precious metals are trading lower in the latter half of the London session.

U.S. markets are closed in observance of the Presidents' Day holiday.

Gold looks poised for a higher weekly close, while silver is set for its 3rd straight lower weekly close

OUTSIDE MARKET DEVELOPMENTS: Today's CPI report showed U.S. consumer prices rose 0.2% in January, below expectations of +0.3%, versus +0.3% in December. The annualized rate of inflation dropped to 2.4%, on expectations of 2.5%, versus 2.7% y/y in December. That's the slowest pace since May 2025.

Core CPI rose 0.3%, in line with expectations, slightly warmer than the +0.2% print in December; 2.5% y/y, down from 2.6% in December. That's the slowest annual pace of core inflation since March 2021.

Rate cut expectations that dimmed following the NFP beat earlier in the week have rebounded slightly, but not significantly enough to alter the policy outlook reflected by Fed funds futures. The Fed is likely on pause through the first half of the year. A half-point of easing is still favored by year-end,  with the first 25 bps cut not fully priced until September. 

While odds for a third 25bps cut in 2026 edged up, risk appetite remains subdued as the market digests Thursday's tech/AI selloff. The trade remains concerned about overvaluation and expectations for large capital expenditures.

President Trump confirmed that he is repositioning a second carrier group to the Middle East "in case we don't make a deal" with Iran on its nuclear program. After meeting with Israeli Prime Minister Netanyahu on Thursday, Trump said he 
preferred a diplomatic deal with Iran, but would keep military options open. Tensions remain high.

Netanyahu insists that any deal must include vital elements for Israel's security beyond a halt to Iran's nuclear activities, including strict limits on its ballistic missiles, and curbs on its support for regional proxies. While Bibi noted that Iran "made a mistake last time by not reaching an agreement," he was skeptical that a new comprehensive deal could be reached. 

Monday is Presidents' Day. Long holiday weekends are often somewhat disruptive to markets, primarily due to reduced trading volume, lower liquidity, and potential for increased volatility or exaggerated price moves. 


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$32.14 (+0.65%)
5-Day Change: +$42.91 (+0.86%)
YTD Range: $4,310.83 - $5,595.02
52-Week Range: $2,835.23 - $5,595.02
Weighted Alpha: +78.92

Gold has rebounded into the holiday weekend, buoyed by geopolitical tensions and a soft dollar. Much of Thursday's selloff has been retraced, and the yellow metal remains poised for a second straight higher weekly close, but the comparative weakness in silver today is troubling.



While price action remains confined to the previous day's range (inside day), a close back above the 20-day moving average looks likely. While the bull camp will view that as encouraging, I wouldn't be surprised to see prices moderate ahead of the long weekend. As we saw on Thursday, some longs are quick to hit the exits on any sign of technical weakness.

If gold can sustain gains above the 20-day, look for renewed tests above $5,100 early in the week ahead. A breach of Wednesday's high at $5,117.94 would clear the way for a true test of the 61.8% retracement level at $5,141.08. Above the latter, $5,200, and the 78.6% retracement level at $5,340.72 would attract.

On the downside, initial support is marked by the 20-day MA at $4,974.96. Below that, today's Asian low at $4,890.72 protects the low for the week at $4,882.43. Given that volatility remains high and the bulls still have some trepidation, a drop back to the $4,800 zone remains a possibility.

While it does seem likely that we're in for further consolidation within the broad $5,595.02/$4,406.69 range, I continue to believe the dominant trend is up. Ronald-Peter Stöferle and Mark J. Valek of Incrementum concur, writing, "In our view, the sharp pullback, while large on the surface, becomes more reasonable in light of recent dynamics and still allowed gold to post an impressive +12.75% in USD for the month. Combined with broad strength across all currencies we track, this remains typical of a healthy bull market and signals a correction after a vertical move rather than a trend reversal."

I might quibble with their use of the term "typical," as a three-day decline of more than $1,000 is anything but. That being said, I have a lot of respect for the analysis generated by Incrementum. Their Monthly Gold Compass can be found here.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$2.039 (+2.71%)
5-Day Change: +$0.203 (+0.26%)
YTD Range: $64.140 - $121.630
52-Week Range: $28.565 - $121.630
Weighted Alpha: +157.00

Silver edged to a new low for the week in Asian trading before rebounding into the range. While a higher daily close seems likely, the white metal appears on track for a third consecutive lower weekly close, as well as a close back below the 50-day moving average.



A comparatively buoyant gold market, a slightly more dovish Fed outlook, and a soft dollar provide some support. Still positive fundamentals like structural supply deficits, strong investment and industrial demand, and geopolitical/macro support lend credence to the belief that the underlying trend remains positive.

However, the magnitude of the recent volatility has stoked considerable trepidation amongst market bulls, making them reluctant to recommit to the upside, perhaps especially ahead of a long holiday weekend. Ongoing concerns about the tech/AI sector – and the potential knock-on effects for industrial demand – add additional uncertainty to the outlook.

The failure of the market to sustain midweek gains above the 38.2% retracement level at $86.101 leaves the $90 zone well protected for the time being. We may have to see the 70-handle again to trigger renewed bargain hunting.

The halfway back point of the entire decline at $92.885 probably needs to be cleared to truly reinvigorate the bull camp. The declining 20-day MA will bolster the significance of the $90 zone as an intervening barrier early in the new week.

Choppy, volatile trading is likely to persist. Keep your arms and legs inside the ride at all times!


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.