Gold continues to consolidate last week's runup to $3,500, awaiting fresh inputs
OUTSIDE MARKET DEVELOPMENTS: The first 100 days of Trump 2.0 are being assessed, and as you might imagine, the grades vary wildly. President Trump delivered quickly on border security, but fulfilling economic and geopolitical pledges has proven more difficult.
A ceasefire in Gaza earlier in the year could not be sustained, and the war in Ukraine rages on. Russian President Putin unilaterally declared a 72-hour ceasefire to begin on 08-May, but a permanent ceasefire, and ultimately the peace deal Trump wants, remains elusive. That's keeping geopolitical tensions elevated.
On the trade front, on-again-off-again tariffs have stoked uncertainty and frayed long-standing relationships. While Trump's goal is to reduce the trade deficit, massive front-running of tariffs has actually had the opposite effect.
The advance trade balance for March just came out today, and it was a record -$162.0 bln. That print was well outside market expectations and exceeded the previous record from January by -$7.4 bln.
More recently, some degree of optimism has surfaced about a handful of key trade deals. While this has resulted in improved risk appetite, the erratic implementation of tariffs and ongoing uncertainty about how tariffs will impact inflation, growth, and monetary policy are keeping global markets on edge.
The surge in imports has the market anticipating that growth slowed sharply in Q1. Advance Q1 GDP comes out tomorrow, and median expectations are +0.4%, versus +2.4% in Q4'24.
The Atlanta Fed's GDPNow has been painting a much grimmer picture since mid-quarter, with the latest reading for Q1 at -2.7%. This is attributed to the widening deficit and weaker consumer spending, but inputs have been volatile, so there are some expectations that GDPNow is overstating the contraction.
If Wednesday's Q1 GDP print is closer to GDPNow than market expectations, doubt about Trump's policies will intensify. Stocks are likely to suffer even if rate cut expectations grow. At this point, Fed funds futures continue to predict 100 bps in easing by year-end, with the first 25 bps cut likely in June or July.
In an interesting turn, Trump may have inadvertently helped the liberal party remain in power in Canada. The country had been supremely dissatisfied with the previous liberal government of Justin Trudeau, prompting him to resign in January. The liberal party made Mark Carney their leader, and he served as Prime Minister until a snap election could be held.
Canada seemed poised for a resounding swing to the right. However, Trump's tariffs, demands for more military spending, and gibes about making Canada the 51st state swung the polls back to the left. The liberals appear to have won yesterday's election by a slim margin. Carney won a seat in the House of Commons and is expected to remain as PM.
Balance of Trade (advance) -$162.0 bln in March, outside expectations of -$143.0 bln, versus a revised -$147.8 bln (was -$147.9 bln).
FHFA Home Price Index rose 0.1% in February to 437.3, versus a revised 436.7 in January (was 436.5). It was the twelfth straight monthly increase.
S&P Case-Shiller Home Price Index (20-cities) rose 0.7% in February to 335.1, versus a revised 332.7 in January (was 332.6). The record high was set in July at 335.8. The annual pace of appreciation decelerated slightly to 4.5% from 4.7% y/y in January.
Consumer Confidence continued to erode in April, falling 7.9 points to 86.0. That's below expectations of 87.2, versus a positive revised 93.9 in March (was 92.9). It was the fifth consecutive monthly decline to the lowest print since April 2020.
JOLTS Job Openings declined 288k in March to 7,192k, below expectations of 7,480k, versus a revised 7,748k in February (was 7,568k).
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$31.38 (-0.94%)
5-Day Change: -$74.15 (-2.19%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,281.97 - $3,495.89
Weighted Alpha: +47.80
Gold is trading lower within Monday's range, which was within Friday's range. The yellow metal appears to be consolidating last week's runup to $3,500 and awaiting new economic data and fresh info on tariffs.
If tomorrow's advance Q1 GDP print undershoots market expectations by a wide margin, haven interest in gold would reignite. However, be aware of the potential for another bout of deleveraging pressure if stocks tank.
Such a move would be seen as a buying opportunity, but the recent lows at $3,274.4, $3,269.62, and $3,265.55 are not secure yet. A test of the $3,200 zone would have to be considered.
Ongoing weakness in the dollar provides some underpinning for gold, and a weak GDP print would spark more dovish Fed expectations. Hotter than expected PCE inflation could see rate cut expectations trimmed somewhat, but probably not significantly.
A short-term rebound above the halfway back point of last week's decline at $3,380.72 would return a measure of confidence to the uptrend. Yesterday's high at $3,351.87 and Friday's high at $3,366.18 provide intervening barriers.
Silver set new highs for the week in early U.S. trading, but last week's highs at $33.662/655 remain well protected. A weak dollar and expectations of further Chinese stimulus provide some support, but the market is waiting for U.S. growth and inflation data before it takes a run at the key highs above $34.
Some significant breakthrough on the trade front, and perhaps specifically with China, is probably needed to truly set silver free. If that happens, the cycle high from last October at $34.853 would likely be exceeded.
A convincing move above an important Fibonacci level at $35.217 would shift focus to $37.430 initially, but $40 would look pretty attractive at that point.
On the downside, yesterday's low at $32.696 and the 50-day moving average at $32.651 protect more important support at 32.188/134/125, where the 20-day moving average and a couple of recent lows converge.
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 is trading within Friday's range, awaiting fresh tariff and economic news
OUTSIDE MARKET DEVELOPMENTS: Market angst is in retreat amid hints of progress on the trade front, underpinning risk appetite. China reportedly removed tariffs on some U.S. goods last week. “I’ve made 200 deals,” President Trump told Time Magazine.
That seems unlikely, and no details were provided. Bloomberg estimates that cargo shipments have plummeted 60% since the U.S. slapped tariffs on China earlier in the month. Top retailers are now warning that we could start seeing empty shelves and higher prices in May.
I'm anticipating another week of mixed messages on trade, which will keep uncertainty elevated. There is also a host of earnings and important economic releases. April jobs data, PCE inflation, and Q1 advance GDP are all on tap.
The market is only expecting 0.4% GDP growth for Q1. Expectations for nonfarm payrolls are 130k, but there are some risks of an undershoot as tariff front-running ebbed in April.
Dallas Fed Index plunged 19.5 points to a 59-month low of -35.8 in April, versus -16.3 in March. "Perceptions of broader business conditions continued to worsen notably in April. The general business activity index fell 20 points to -35.8, its lowest reading since May 2020. The company outlook index also retreated to a postpandemic low of -28.3. The outlook uncertainty index pushed up 11 points to 47.1," according to the Dallas Fed.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$27.38 (-0.83%)
5-Day Change: -$131.12 (-3.83%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,281.97 - $3,495.89
Weighted Alpha: +46.91
Gold eked out its third straight higher weekly close, despite last week's rejection from $3,500. While de-escalation on trade was a contributing factor to the retreat, the yellow metal was also quite overbought and therefore vulnerable to correction.
Gold firmed in early U.S. trading on the grim Dallas Fed Index print, suggesting there is indeed still haven interest out there. A breach of the halfway back point of last week's decline at $3,380.72 would return a measure of confidence to the underlying uptrend. Friday's high at $3,366.18 provides an intervening barrier.
With those resistances intact, it's premature to suggest the corrective low is in at Wednesday's low of $3,265.55. That level is fortified by subsequent lows at $3,269.62 and $3,274.47.
Global ETFs saw net inflows of 15.4 tonnes. It was the 13th straight week of net inflows.
Given last week's volatility, perhaps it's not surprising to see North American investors on hold. European investors recorded outflows of 8.8 tonnes. However, Asian investors picked up the slack, inspired by the lower price of gold and a weak dollar.
The COT report showed that net speculative long positions fell 26.8k last week to a more than one-year low of 175.4k contracts, versus 202.k in the previous week. It was the fifth consecutive weekly decline.
Silver notched a third straight higher weekly close last week. Friday saw the first daily close above $33 since 02-Apr.
With more than 78.6% of the decline from the late-March high at $34.543 now retraced, a fair amount of confidence has been returned to the uptrend. However, volatility in silver has been high this year, and wild gyrations on tariff news may well continue.
Friday's setback was extended in Asian trading, but the 50-day moving average successfully contained the downside. This leaves more important support at 32.134/125 protected, a level that is bolstered by the 20-day moving average at $32.215.
On the upside, a close back above $33 today would bode well for another run at last week's highs at $33.662/655. Above the latter, potential to the March high at $34.543 and the cycle high from October at $34.853 would be confirmed.
The latest COT report showed net speculative long positions rebounded 0.8k last week to 44.7k contracts, versus 43.9k in the previous week. Recent volatility is probably keeping the spec sidelined.
CFTC Silver speculative net positions
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 recent losses on heightened geopolitical risk
I'm writing today from the bourse floor at the CSNS show in Schaumburg, booth 1404. We've got coffee! Stop by for a cup.
OUTSIDE MARKET DEVELOPMENTS: Russia conducted a large missile and drone strike against the Ukrainian capital of Kyiv. The attack comes as the U.S. is trying to broker a peace deal, and prompted President Trump to demand that Putin "STOP."
“I am not happy with the Russian strikes on KYIV. Not necessary, and very bad timing. Vladimir, STOP! 5000 soldiers a week are dying. Lets get the Peace Deal DONE!” Trump wrote on TruthSocial.
The escalation of geopolitical tensions had a limited impact on risk appetite, with markets remaining optimistic about ongoing trade negotiations. Meanwhile, a dozen U.S. states have sued the Trump administration seeking a court order declaring that tariffs imposed under the International Emergency Economic Powers Act are illegal.
Durable Orders surged 9.2% in March, well above expectations of +2.0%, versus +0.9% in February. Ex-trans was unch on expectations of +0.3%, versus +0.7% in February.
Initial Jobless Claims rose 6k to 222k in the week ended 19-Apr, in line with expectations, versus 216k in the previous week. Continuing claims fell 37k to 1,841k.
Chicago Fed National Activity Index fell 0.27 points to -0.03 in March from 0.24 in February.
Existing Home Sales fell 5.59% to 4.02M in March, below expectations of 4.13M, versus 4.27M in February.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$40.91 (+1.24%)
5-Day Change: +$7.89 (+0.24%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,281.97 - $3,495.89
Weighted Alpha: +48.02
Gold is consolidating within yesterday's range, buoyed by heightened geopolitical tensions. Despite the sharp sell-off from $3,500 earlier in the week, the yellow metal is clinging to a weekly gain.
Today's Asian high at $3,362.22 protects the halfway back point of this week's decline at $3,380.72. Penetration of the latter would bode well for renewed tests above $3,400.
On the downside, the Asian low at $3,288.35 stands in front of yesterday's low at $3,265.55. Fresh lows for the week would signal additional downside potential to the $3,200 zone.
Silver is consolidating at the high end of yesterday's range. The white metal jumped to a three-week high of $33.655 on Wednesday, and the ability of silver to sustain gains above $33 is seen as encouraging to the bull camp.
With more than 78.6% of the entire decline off the late-March high at $34.543 now retraced, that level, both $34.543 and the 22-year high from October at $34.853, are considered in play. However, upside prospects remain very much contingent on ongoing progress on trade negotiations.
A retreat below $33 would put the bullish scenario back on pause, favoring a return to the 20- and 50-day moving averages around $32.00 would become likely.
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 continues to correct as trade optimism boosts risk appetite
I'm traveling today, so I'll keep it brief. I hope to see some of you at the Central States Numismatic Society Show in Chicago this week. We'll be at booth 1404.
OUTSIDE MARKET DEVELOPMENTS: Talk of de-escalating trade tensions with China and progressing trade talks with India and Japan is the kind of news markets were desperate for. U.S. stocks are higher amid improved risk appetite.
According to Treasury Secretary Scott Bessent, neither the U.S. nor China sees the current trade war as sustainable. President Trump is “setting the stage for a deal with China,” said Bessent on Tuesday, and de-escalation should happen in the "very near future."
The President also dialed down pressure on the Fed, saying he had "no intention of firing" Chairman Powell and never did. “I would like to see him be a little more active in terms of his idea to lower interest rates,” Trump said Tuesday evening.
The dollar index firmed on Tuesday, but gains stalled well shy of 100. The greenback is lower today, and the overall bias remains bearish after falling to a three-year low on Monday.
MBA Mortgage Applications fell 12.7% in the week ended 18-Apr as 30-year mortgage rates rose to a nine-week high of 6.90%.
S&P Flash Manufacturing PMI rose to 50.7 in April, above expectations of 49.1, versus 50.2 in March.
S&P Flash Services PMI fell to 51.4 in April, below expectations of 52.5, versus 54.4 in March.
New Home Sales rose to 0.724M in March, above expectations of 0.686M, versus a revised 0.674M in February (was 0.676M).
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CST: -$51.37 (-1.52%)
5-Day Change: -$23.52 (-0.70%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,281.97 - $3,495.89
Weighted Alpha: +47.74
Gold peaked just shy of $3,500 on Tuesday after positive news on the trade front sparked profit taking. Follow-through losses today pushed the yellow metal to new lows for the week. 
While gold is nearly $200 off yesterday's record high, I still see losses as corrective. The next level of support is marked by the 17-Apr low at $3,290.51.
The $3,210.36/$3,198.36 zone offers more substantial chart support and should correspond with the 20-day moving average over the next several sessions. An additional intervening barrier is noted at $3,229.84 (16-Apr low).
Ongoing weakness in the dollar is seen as a limiting factor on the downside for gold. The market will also be monitoring events on the trade front. I categorize recent trade optimism as 'fragile,' particularly with regard to China.
A climb back above $3,400 would return confidence to the dominant trend, which is still very clearly bullish. As noted yesterday, some sources show highs above $3,500. It seems likely that the market will want to return to that level to confirm.
Silver is probing above $33 again, underpinned by heightened optimism on trade and a soft dollar. Gains above $33 have been a struggle recently, but this time might be the charm.
A breach of the previous highs at 33.050/053 would clear the way for a challenge of the $33.264 Fibonacci level. Above the latter, the late-March high at $34.543 and the cycle high from October at $34.853 would be in play.
An intraday chart point at $32.782 should keep today's Asian low at $32.276 at bay. The 50- and 20-day moving averages continue to be significant with respect to the close.
A short-term close below the 20-day MA at $32.334 would set up a test of chart support at $32.134/125, but I would suggest potential at that point would be back to the 100-day MA at $31.613.
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 pressured $3,500 before retreating below $3,400
OUTSIDE MARKET DEVELOPMENTS: Citing heightened trade tensions, the IMF slashed its 2025 U.S. growth forecast by nearly a full percent to 1.8%, versus 2.7% in January. The risk for a U.S. recession was raised to 40% from 25% in October.
“The common denominator ... is that tariffs are a negative supply shock for the economy imposing them,” said IMF chief economist, Pierre-Olivier Gourinchas.
The global growth forecast was cut to 2.8% from 3.3% previously. “The April 2 Rose Garden announcement forced us to jettison our projections — nearly finalized at that point — and compress a production cycle that usually takes more than two months into less than 10 days,” wrote Gourinchas.
The IMF also raised inflation expectations for advanced economies to 2.5% from 2.1% in January. The organization thinks that the reaction of central banks to inflationary pressures will be dependent “on whether the tariffs are perceived to be temporary or permanent.”
Some U.S. trading partners seem to be more worried about disinflation. "[T]he tariffs actually represent more of a disinflationary risk than an inflationary risk," said BoE MPC member Megan Greene.
Greene believes UK consumers could pivot to cheap Asian exports. She also cited a weaker dollar and softening demand as potential sources of downward pressure on prices.
Despite IMF concerns about growth and inflation, risk appetite rebounded after U.S. Treasury Secretary Bessent acknowledged that the trade war between the U.S. and China was unsustainable. He reportedly said he thinks the situation will de-escalate, prompting a strong rally in U.S. shares.
Richmond Fed Index fell 9 points to a five-month low of -13 in April, below expectations of -6, versus -4 in March. Prices paid surged 1.62 points to 5.37, and prices received rose a more modest 0.31 points to 2.65. "Firms expected heightened growth in prices paid and prices received over the next 12 months," according to the survey results.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$29.74 (+0.87%)
5-Day Change: +$206.57 (+6.40%)
YTD Range: $2,607.16 - $3,495.89
52-Week Range: $2,281.97 - $3,495.89
Weighted Alpha: +55.00
Gold extended to the upside in overseas trading, setting yet another round of new all-time highs amid ongoing tariff worries and dollar weakness. Some sources show trades just above $3,500, but my chart shows the latest record high as $3,495.89. Time and sales on the ZMhedge platform don't show any fills with a 3500 handle.
One thing is certain: My $3493.00 Fibonacci objective (261.8% retracement of the last meaningful correction) was satisfied before profit taking surfaced and the yellow metal retreated into the range.
Intraday losses accelerated on an indication from Treasury Secretary Bessent that de-escalating the trade war with China was desirable. Gold fell to new intraday lows below $3,400, leaving a range for the day greater than $100.
De-escalation with China would be a good move; finding enough common ground to strike a trade deal is no small task. It's likely to take some time. Global uncertainty will remain elevated, suggesting the retreat is corrective.
The low from earlier U.S. trading at $3,380.50 now protects a minor chart point from yesterday at $3,369.43. More substantial supports are marked by last Thursday's high at $3,354.76, and yesterday's low at $3,315.13.
Having the world's largest consumer market means the U.S. has the stronger hand. The last thing China wants is to start closing factories and laying off workers, as it creates a risk for civil unrest.
On the upside, the midpoint of today's range is at $3,438.20. A confirmed penetration of $3,500 would shift focus to $3,539.97 initially, but the potential would be to $3,600.
Global ETF inflows totalled 33.4 tonnes last week, with Asian investors accounting for nearly half of that. It was the twelfth straight weekly net inflow.
The latest COT report shows net speculative long positions edged up 1.5k contracts to 202.5k in the week ended 18-Apr, versus 200.7k in the previous week. However, spec long positioning remains well below the highs from earlier in the year.
Silver remained relatively subdued during gold's earlier run-up as the IMF report stoked global growth worries. The white metal ticked back above $33, but once again, gains could not be sustained.
Bessent's comments have provided some hope that the U.S. and China might start moving toward a trade deal. That lifted silver off the intraday low.
A convincing breach of last week's high at $33.050 is needed to clear the way for a test of the next Fibonacci objective at $33.264. Penetration of the latter would bode well for retests of the late-March high at $34.543, and the more important 22-year high from October at $34.853.
On the downside, I'm still watching the 50- and 20-day MAs on a close basis. The low for the day at $32.370 now protects secondary support at $32.134/125. Below the latter, $32.000 and $31.833 would be in play.
In light of recent volatility, it's not surprising that net speculative long positions declined for a third straight week from 46.5k contracts to 43.9k.
CFTC Silver speculative net positions
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.
