Gold surges to new all-time highs, as silver takes a pause
Outside Market Developments: Focus today is on the Fed decision. While the central bank is widely expected to hold steady, the trade will still try to glean insight into future moves from the policy statement and Powell's presser.
Fed funds futures suggest the Fed may be on hold into H2, amid resilient growth and sticky inflation that remains above target. The next rate cut isn't fully priced until September.
Although unlikely to be mentioned today, there is still considerable concern about Fed independence. President Trump wil have the opportunity to replace Powell as chairman when his term ends in May.
BlackRock's Chief Investment Officer, Rick Rieder, lept passed "the Kevins" (Warsh and Hassett) as the new favorite to take over the helm of the Fed. Rieder has advocated for more aggressive rate cuts to get to a neutral Fed funds rate of 3%.
The market remains tilted toward risk-on, bolstered by persistent enthusiasm for tech and AI. Microsoft, Meta, and Tesla report earnings after the close today.
The potential for another partial U.S. government shutdown remains high as funding for several key agencies, including the Department of Homeland Security, expires at midnight on Friday. Senate Democrats have vowed to block that funding amid opposition to DHS/ICE deportation actions, including the recent shootings.
Shut-down risks are contributing to recent pressure on the dollar. Recent central bank jawboning and "rate checks" also weighed on the greenback. However, Treasury Secretary Bessent said on CNBC this morning that the U.S. is "absolutely not" intervening in the currency market to support the Japanese yen.
The dollar index tumbled to four-year lows on Tuesday. The breach of last year's low at 96.22 reestablishes the dominant downtrend in the greenback. While the DX is trading modestly higher within Tuesday's range today on Bessent's comments, the technical damage has been done. 
Scope is seen for a short-term test of the 95.09/00 level. Below that, a secondary retracement level at 94.67 would be in play.
MBA Mortgage Market Index fell 33.9 points to 363.30 in the week ended 23-Jan, versus 397.20 in the previous week. The 30-year mortgage rate rebounded to 6.24% from 6.16% in the previous week.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$80.50 (+1.55%)
5-Day Change: +$469.35 (+9.71%)
YTD Range: $4,310.83 - $5,311.38
52-Week Range: $2,745.87 - $5,311.38
Weighted Alpha: +100.25
Gold set new all-time highs for the eighth consecutive session, buoyed by relentless haven demand. While the dollar firmed today after Bessent's comments on intervention, yesterday's breach of key support should continue to provide a tailwind for the yellow metal.
Gold is outperforming silver today and is up nearly 10% over the last five sessions. Additionally, weighted alpha has cracked the 100 threshold for the first time in my memory. Upside momentum seems likely to carry the day, even as the market becomes increasingly overbought.
That overbought condition may lead to a corrective pullback, but at this point, the trade is disinclined to try to pick a top. They continue to view short-term setbacks as buying opportunities.
With Fibonacci objectives at $5,180.79 and $5,268.49 satisfied and exceeded, focus now shifts to the $5,400 psycholical barrier. Above the latter, additional b-g-round-numbers at $5,500 and $5,600 stand in front of the next Fibonacci level, which comes in at $5,674.97.
On the downside, intraday support at $5,242.07/41.12 protects today's Asian low at $5,157.93. Below that, congestion around $5,100 should help keep the more important $5,000 level at bay.
SILVER
OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.413 (+0.37%)
5-Day Change: +$18.332 (+19.69%)
YTD Range: $71.429 - $117.705
52-Week Range: $28.565 - $117.705
Weighted Alpha: +343.64
Silver is taking a bit of a pause, allowing gold to play some catch-up. While the last record high was set on Monday, the white metal is still up nearly 20% over the past week!
The gold/silver ratio has stabilized somewhat after testing below 44 on Monday, a level not seen since August of 2011. That being said, there's nothing to suggest at this point that a low is in place. With more than 78.6% of the entire rally from 31.707 (Apr'11 low) to 126.433 (Mar'20 high), potential is in fact all the way back to that low.
Several more sessions of congestion in silver would go a long way toward calming the market. Maybe that's too much to ask for at this point.
The CME is raising margin rates once again from 9% to 11% for hedges, and 12.1% for spec trades. The CME is also attempting to address the market access issue by launching a 100-ounce silver contract.
Today's Asian high at $116.092 now provides an intervening barrier ahead of Monday's recod high at $117.705. Beyond the latter, psychological barriers at $118, $119, $120, etc protect the next Fibonacci projection at $128.721.
Today's earlier U.S. low at $110.582 protects the $110.00 zone. Below that more important supports are found at $105.086, $103.437, and $102.445.
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.