Blog posts tagged with 'precious metals'

Gold struggles above $4,000 despite a weaker dollar

OUTSIDE MARKET DEVELOPMENTS: The government shutdown drags on as Senate Democrats continue to block the House-passed continuing resolution. In the wake of Tuesday's election results, hopes for a bipartisan deal to reopen the government have seemingly been dashed as Democrats have dug in even harder on their demands for healthcare concessions before they would consider ending the filibuster.

Ultimately, Congress has a Constitutional and statutory obligation to pass a budget each fiscal year. Both parties have shirked this fundamental obligation for almost 30 years. The last time Congress passed all required appropriations bills (funding the full federal discretionary budget) on time – enacting them into law before the start of the new fiscal year on October 1 – was for fiscal year 1997. Since then, it's just been one CR or omnibus package after another for decades!

There is a lot of FedSpeak slated for today, but the gist thus far is one of caution. Cleveland Fed President Hammack said the central bank is carefully balancing its dual mandate of maximum employment and price stability on an "economic tightrope." Chicago Fed President Goolsbee warned that he's "even more uneasy" about front-loading further rate cuts due to the government shutdown creating a "blackout" on critical inflation data.

We're also going to miss another jobs report tomorrow due to the shutdown. This week's jobs data from private sources has been mixed. Wednesday's ADP survey beat expectations, but today's Challenger Layoffs print was higher than expected.

Perceived weakness in the jobs market has been an important contributing factor to recent Fed dovishness. The probability of a December rate cut edged up to 69.9% from 62% yesterday, but uncertainty prevails.

Recent gains in the dollar index were successfully capped by the 200-day moving average, prompting a retreat back below 100. Today's setback is reflective of the rebound in dovish Fed expectations.

Challenger Layoffs surged to a seven-month high of 153.1k in October, above expectations of 73k, versus 54k in September. It is the largest October gain in announced job cuts since 2003.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$38.95 (+0.98%)
5-Day Change: -$39.42 (-0.98%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,541.42 - $4,381.21
Weighted Alpha: +50.94

Gold climbed back above $4,000 in overseas trading, buoyed by a revived haven interest associated with the ongoing shutdown and fresh worries about the legality of Trump's tariffs. A softer dollar, stemming from an uptick in December rate cut expectations, provides some additional lift.



However, gains above $4,000 could not be sustained in U.S. trading. Recent choppiness is suggestive of a market trying to form a bottom, but I'm not convinced that the corrective low is in yet.

The World Gold Council acknowledged that gold experienced a "momentum flush out" in October. They note that technical analysis "points to a much-needed pause but no damage to gold’s trend, which remains supported by solid fundamentals."

The WGC outlook is consistent with my own. The dominant trend is still bullish, making the October losses corrective in nature. Subsequent consolidation continues to relieve the overbought condition that developed after successive record highs throughout the year.

We may still see a test of the 50-day moving average, but that could come from the 50-day catching up to the market at or near its current level. The indicator is already within $20 of the corrective low thus far at $3,887.03 (28-Oct). That's going to fortify that support level.

Intervening barriers are marked by lows from earlier this week at $3,930.59/29.37 and the 30-Oct low at $3,915.82.

I would view a close above the 20-day moving average at $4,083.01 as compelling evidence that the low is in. The 20-day continues to correspond closely with the 38.2% retracement level of the correction at $4,075.81.

A breach of the 30-Oct high at $4,045.01 would put $4,075.81/$4,083.01 in play. Above the latter, focus would shift to the halfway back point of the decline at $4,134.12.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.692 (+1.44%)
5-Day Change: -$0.798 (-1.63%)
YTD Range: $28.565 - $54.465
52-Week Range: $28.565 - $54.465
Weighted Alpha: +63.23

Silver is also struggling to sustain upticks today, despite improved hopes for another rate cut and weakness in the dollar. Uncertainty prevails on the trade and government shutdown fronts.



If Trump's tariffs are ruled to be illegal, will global trade start flowing as it was before April, or does the Trump administration have new measures queued up? It seems unlikely that President Trump will just fold.

Like gold, I see the October losses in silver as corrective within the dominant macro trend. All of the fundamental factors that drove silver to record highs are still in place, although, as mentioned in Tuesday's comment, there are some who believe regulatory action in China may ease the multi-year supply deficit. 

I'm watching the 20-day moving average for silver as well. The 20-day is at $49.530 and is protected by today's intraday high at $48.793 and the 31-Oct high at $49.359. A short-term close above the 20-day would bode well for a move back above $50 with potential to the $51.064 Fibonacci level.

On the downside, lows from earlier this week at $46.885/910 and the 50-day moving average at $46.147 protect the   $45.563 low from last week. The fact that the 50-day has climbed above the cycle low is significant, but here too, I'm not entirely convinced the low is in.

I expect the long-term bulls to continue to test the long side of the market when limited-risk opportunities are presented. 


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 are defensive despite heightened risk aversion

Outside Market Developments: The government shutdown has reached day 35 – tying the all-time record – as Senate Democrats continue to filibuster the House-passed continuing resolution. President Trump vowed in a 60 Minutes interview that aired on Sunday that he “won’t be extorted” by Democrats.

Senate majority leader John Thune (R-SD) expressed optimism that a deal could be reached to end the government shutdown by the end of the week, citing ongoing talks with Democrats and rank-and-file members. Senate Democrats may actually get their motivation to end the shutdown from today's elections.

Today’s off-year elections have the potential to set the tone for next year's midterms. If Democrats win the Virginia and New Jersey governorships, Mamdani wins the mayoral race in New York City, and Prop 50 passes in California, it bodes ill for GOP prospects in 2026.

A blue sweep today would set the stage for a potential Democratic majority in the House for the latter half of Trump's second term. That would hamstring his Presidency and likely lead to further impeachment efforts. Such an outcome would probably prompt the Dems to end the filibuster immediately and vote to reopen the government.

If Republicans can hold one of those governorships, it might be enough to keep their donor base engaged into the midterms. Prediction markets suggest the odds of that happening are long.

Today's reported drop in economic optimism is weighing on risk appetite. “Concerns about inflation and the impact of tariffs remain high, with food prices standing out as the leading economic worry. Additionally, the government shutdown is having a profound impact on the national psyche. An over-cautious monetary policy is paralyzing weaker sectors of the economy, such as housing, and dampening public confidence,” said Raghavan Mayur, president of TechnoMetric.

The trade continues to believe another rate cut in December is probable, but they're not nearly as certain as they were before last week's Fed decision. Fed funds futures put the probability for a 25 bps cut at the next FOMC meeting at 67.9%, up slightly from yesterday, but down from 90.5% a week ago.

RCM/TIPP Economic Optimism Index tumbled 9.1% to 43.9 in November, below expectations of 48.1, versus 48.3 in October. “Americans’ economic confidence sharply declined in November for the third consecutive month,” said Raghavan Mayur, president of TechnoMetrica, which conducted the survey.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$29.29 (+0.73%)
5-Day Change: -$1.37 (-0.03%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,541.42 - $4,381.21
Weighted Alpha: +49.14

Gold has failed to benefit from today's risk-off sentiment, amid uncertainty associated with today's elections, some hope for an end to the government shutdown, cautious FedSpeak, and a stronger dollar. The yellow metal is defensive at the low end of the recent range after upticks above $4,000 over the past week attracted selling interest.



If risk aversion is sustained, we could see some renewed haven interest develop. The convergence of Fibonacci resistance and the 20-day moving average at $4,075.81/$4,086.30 is the level that needs to be cleared to reinvigorate the bull camp. Friday's high at $4,045.01 provides a solid intervening barrier.

On the downside, $3,915.82 (30-Oct low) stands in front of the cycle low thus far at $3,887.03 (28-Oct). If the latter gives way, the rising 50-day MA at $3,844.64 would be the initial attraction.

The dollar index has regained the 100 handle for the first time since August. The 100.26 high from 01-Aug corresponds closely with the declining 200-day moving average at 100.38.

 

A breach of this level would suggest potential for further dollar gains and an intensified headwind for gold. At this point, it seems like revived hopes for a December rate cut are needed to take the bid out of the dollar.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.308 (-0.64%)
5-Day Change: +$0.493 (+1.05%)
YTD Range: $28.565 - $54.465
52-Week Range: $28.565 - $54.465
Weighted Alpha: +60.56

Silver has retraced more than 61.8% of its recent rebound, weighed by risk aversion, weakness in gold and copper, and strength in the dollar. The fade in economic optimism poses an additional headwind.

 

J.P. Morgan expressed concerns earlier in the year that Chinese regulatory curbs on solar installations could lead to an unwinding of earlier front-loaded demand for both silver and copper. They thought the potential drag in silver demand could be 5–8%, amid fewer housing-integrated systems and project delays.

This could shrink the projected supply deficit by more than 25%. While the silver market is expected to remain in deficit for a ninth consecutive year in 2026, it may be less severe than originally forecast.

Scope is seen for a short-term run at last week's cycle low at 45.563, which now corresponds closely with the rising 50-day MA at $45.780. A breach of this area would shift focus to Fibonacci support at $44.571.

A rebound above the 20-day MA at $49.633 is needed to return a measure of credence to the underlying uptrend. Solid intervening barriers are noted at $48.083, $48.106 (3-Nov high), and $49.359 (31-Oct high).


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 are poised for monthly gains, despite recent corrective action

OUTSIDE MARKET DEVELOPMENTS: The trade continues to digest Powell's hawkish tilt at the end of this week's FOMC meeting. Rate cut expectations were trimmed significantly after Powell said, "A rate cut in December is not a foregone conclusion, far from it."

Fed funds futures put the probability of another 25 bps cut in December at 63%. That's down from 72.8% yesterday and  91.7% a week ago.

Speaking today, Atlanta Fed President Raphael Bostic, a swing voter, explained that he "eventually" supported the recent 25 bps rate cut but emphasized caution amid economic turbulence, structural changes like immigration and tariffs, and widespread housing affordability complaints, underscoring the challenges of proactive policy in uncertain times. Cleveland Fed President Beth Hammack, a hawkish non-voter, stated she would not have voted for the cut, aligning with a more restrained approach to future easing given persistent inflation risks and the need for clear evidence of cooling before December.

The U.S. tech market shrugged off the prospect of a pause in the Fed's easing campaign, getting a boost from blockbuster Q3 earnings from Amazon and Apple. The NASDAQ hit fresh record highs, while the broader indexes remain within striking distance of all-time highs.

The U.S. government shutdown drags on, now in its 31st day. The Senate adjourned Thursday without a breakthrough and won't reconvene until Monday, potentially tying the record for the longest funding lapse in history at 34 days.

President Trump is urging Republicans to eliminate the Senate filibuster via the "Nuclear Option" to override Democratic opposition, amid escalating impacts like the impending suspension of SNAP food benefits on November 1 and delayed paychecks for federal workers. Meanwhile, unions are dialing up pressure on Senate Democrats to end their filibuster and vote to reopen the government.

The American Federation of Government Employees (AFGE), the largest federal employee union, sent a letter to Senate Democrats on October 29 pleading for passage of a clean CR, warning of "catastrophic" impacts on workers and families. Teamsters President Sean O'Brien demanded Democrats "stop playing politics" and reopen the government immediately.

The Wall Street Journal reports that the Trump administration has decided to launch strikes on Venezuelan military installations, including ports, airfields, and naval bases allegedly used by drug cartels tied to President Nicolás Maduro.
The White House has dismissed the reports as unreliable, and President Trump himself denied the claim aboard Air Force One.

Chicago PMI rose 3.2 points to a three-month high of 43.8 in October, above expectations of 42.0, versus 40.6 in September. "The increase was mainly driven by a rebound in New Orders, alongside rises in Production and Order Backlogs," according to the report.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$17.01 (-0.42%)
5-Day Change: -$86.89 (-2.11%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,541.42 - $4,381.21
Weighted Alpha: +51.97

Gold is trading in a choppy manner on both sides of $4,000. The yellow metal is poised for its second straight lower weekly close, but will notch a third consecutive higher monthly close.



AI momentum has stocks on the bid, which is weighing on gold's safe-haven interest. Diminished hopes for a December rate cut pushed the dollar index to 13-week highs, providing an additional headwind for gold.

While further tests of the downside can not be ruled out, I continue to view recent losses as corrective within the long-term uptrend. UBS concurs, saying the "decline will prove a pause that resumes later, as demand for gold remains strong."

While gold registered a close above $4,000 on Thursday, another to end the week is needed to bolster the confidence of the bull camp for next week. More important resistance is well defined by the convergence of the 20-day moving average and Fibonacci resistance at $4,075.81/$4,086.53. Today's earlier high at $4,045.01 provides an intervening barrier.

A close below $4,000 would put the intraday low at $3,973.68 in jeopardy. A breach of the latter would highlight chart support at $3,923.46/15.82, with potential back to Tuesday's low at $3,887.03. If these levels give way, potential for a test of the rising 50-day MA at $3,820.94.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.015 (+0.03%)
5-Day Change: +$0.511 (+1.05%)
YTD Range: $28.565 - $54.465
52-Week Range: $28.565 - $54.465
Weighted Alpha: +64.86

Silver needs to close above $48.582 to record a higher weekly close. While the short-term tone is defensive, the nearly 7% rally from Tuesday's low at $45.563 has eased pressure on the downside. The white metal is on track for a more than 4% gain in October, which would be its sixth straight winning month.



Silver is an important component in AI infrastructure, so optimism in that sector is helping to underpin the white metal. However, less dovish Fed expectations and a firmer dollar pose headwinds.

More than 38.2% of the total decline has already been retraced. That's encouraging, but intraday gains faltered ahead of the 20-day moving average at $49.683. A breach of the 20-day would shift focus to the halfway back point of the decline at $50.014.

Today's intraday low at $48.396 marks the first tier of support. Secondary levels are noted at $47.278 (30-Oct low) and $46.873 (29-Oct low). Another minor level at $46.097 stands in front of the cycle low (thus far) at $45.563.


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 retreat into their ranges as Powell's hawkish tilt boosts the dollar 

Outside Market Developments: As expected, the Fed cuts rates by 25 bps today, noting that "uncertainty about the economic outlook remains elevated." There were two dissents, one favoring a 50 bps cut (Marin) and one favoring steady policy (Schmid).

"In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks," according to the statement. This implies that the Fed remains data-dependent regarding further cuts.

Chairman Powell still sees the economy expanding moderately, but he expressed concerns during the presser about the government shutdown weighing on economic activity, the rise in near-term inflation expectations, and the significant slowdown in job gains. "A rate cut in December is not a foregone conclusion, far from it," Powell stressed.

While there are risks on both sides of the dual mandate, Powell seems to be intentionally trying to tamp down December rate cut expectations. The market is obliging and Fed funds futures now put the probability at 67%, down from 88% earlier today, 90.5% yesterday, and 95.5% a week ago.

The dollar index has rallied to two-week highs. A breach of the October high of 99.56 would favor a challenge of more important resistance at 100.00/100.26. Some of the stock market exuberance has also been tempered.

The Bank of Canada also trimmed rates by 25 bps today, in line with expectations. It was the fourth rate cut this year
amid mounting growth risks and persistent trade tensions with the U.S. The Governing Council views the current rate of 2.25% as appropriate to maintain inflation near 2% while supporting the economy through structural adjustments, signaling a potential pause unless the outlook deteriorates further.

Tomorrow's Trump/Xi summit in South Korea looms large. News earlier in the week that a trade deal framework had been agreed to tamped trade war worries and stoked risk appetite.

Democrat senators continue to block a vote on the House-passed continuing resolution, pushing the government shutdown into its 29th day. Senate Minority Leader Chuck Schumer warned the impasse could drag into November, as millions risk losing SNAP food benefits and federal workers face missed paychecks.

Israel accused Hamas of ceasefire violations, prompting airstrikes across Gaza that targeted militants. The IDF said it will abide by the truce after striking dozens of terror targets, while Hamas denies responsibility for attacks on IDF troops and reaffirms its commitment to the deal.

MBA Mortgage Applications jumped 7.1% in the week ended 24-Oct as 30-year mortgage rates fell to a 13-month low of 6.30%.

Pending Home Sales Index held steady at 74.8 in September, below expectations of +1.6%, versus +4.2% in August.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$71.22 (+1.80%)
5-Day Change: -$101.31 (-2.47%)
YTD Range: $2,607.16 - $4,381.21
52-Week Range: $2,541.42 - $4,381.21
Weighted Alpha: +50.42

Gold rebounded above $4,000 in advance of today's FOMC decision as traders squared positions ahead of the news. However, the yellow metal has retreated into today's range as Fed Chairman Powell's comments weigh on December rate cut expectations.



Today's Asian low at $3,923.46 protects yesterday's low at $3,887.03. Penetration of the latter would suggest potential to the rising 50-day moving average around $3,800.

In yesterday's comment, I suggested a close back above $4,000 was needed to provide some encouragement to the bull camp. That now seems unlikely today. More important resistance is well defined by the convergence of the 20-day moving average and Fibonacci resistance at $4,074.08/$4,075.81. Today's earlier high at $4,029.92 provides an intervening barrier.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.132 (+2.41%)
5-Day Change: -$0.381 (-0.79%)
YTD Range: $28.565 - $54.465
52-Week Range: $28.565 - $54.465
Weighted Alpha: +60.21

Silver is holding onto intraday gains in the wake of yesterday's reversal day. The white metal retreated along with gold as Powell's hawkish tilt boosted the dollar.



Optimism about a potential U.S./China trade deal seems to be offsetting the implications of dimmed December rate cut prospects and a firmer dollar. The gold/silver ratio is probing back below 83, suggesting modest overperformance.

I'm now watching intraday support at $47.269 and today's low at $46.873. An additional minor level is noted at $46.097, protecting yesterday's low at $45.563.

A short-term close above $48 (still possible) would ease pressure on the downside, but chart/Fibonacci resistance around $49 and the 20-day MA at 49.560 are the more important levels that must be cleared to return some confidence to the underlying uptrend. The halfway back point of the entire corrective decline comes in at $50.014.


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.