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.