However, the bull camp is likely benefiting from a surprise jump in Chinese first-quarter gold consumption which increased by 5.9% from year-ago levels.

Apparently, mainland China's March gold imports through Hong Kong increased by 40% from February giving credence to news earlier this month that Chinese investors were seeking to hold gold to avoid weakness in the domestic currency...[MORE]

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Fortunately for the bull camp, the dollar is showing signs of tracking lower this morning as the aggressive liquidation this week has clearly rocked the bull camp back on its heels.

While the February to April rallies in gold and silver were not fueled by definitive inflows to ETF holdings, both gold and silver holdings continue to decline in a sign that small investors have not been enticed by the second half of April setback...[MORE]

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While the trade remains vulnerable to additional stop-loss selling today from very large net spec and fund positioning, further extraction of war premium is also expected with the gold futures and options positioning (adjusted into the recent highs) likely at three year highs!

However, Bloomberg overnight carried a story suggesting a large portion of the gold rally was sparked by aggressive buying at the Shanghai futures exchange...[MORE]

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However, ongoing liquidation of flight to quality longs from lower ME angst is certainly adding to the washout while typical outside market influences of the dollar and treasury yields have not been a noted influence and are unlikely to be a key impact today.

In retrospect, there was apparently more flight to quality longs in off the potential for a widespread Middle East war than expected and that should be remembered if conflict returns...[MORE]

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While silver ETF holdings continue to decline very rapidly, gold ETF holdings declines are less significant. Last week gold ETF holdings declined by 478,713 ounces, while silver ETF holdings declined by 22.8 million!

Even though we suspect the Chinese central bank will continue to add to reserves (following 17 straight months of purchases) we suspect lower prices will have only a marginal impact on the size of Chinese Central Bank purchases...[MORE]

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While not a major bearish development gold and silver ETF holdings continue to decline with the declines in gold and silver ETF holdings very significant yesterday (Gold -218,995 ounces & Silver -6.3 ml ounces).

Even the technical picture has shifted in favor of the bear camp with the overnight spike-up move squarely rejected...[MORE]

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However, a new concern may be rising in the marketplace as significant declines in Japanese and South Korean currencies were acknowledged by the US Treasury Secretary at the IMF meeting with the US, Japan, and South Korean officials agreeing on the need to monitor and consult with other central banks on the situation.

Not surprisingly, the IMF dialogue has resulted in a downside extension in the US dollar this morning which could be the primary source of the gold and silver rebounds.

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Overall, silver demand exceeded silver supply in 2023 for the third consecutive year, resulting in a structural market deficit of 184.3 Moz...[LINK]

However, yesterday gold impressively managed gains despite another significant extension of upside action in the dollar and in the face of another higher high in US treasury yields.

There are some discussions in the marketplace that some form of crisis is ahead because of the unrelenting gold market gains and the only other major market reaction to a looming global flight to quality event is the surging US dollar...[MORE]

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However, soft US housing data could provide a brief respite from the strong dollar for gold and silver longs this morning.

Unfortunately for the bull camp gold and silver ETF holdings continue to decline highlighting a lack of small investor interest in one niche of the metal markets.

On the other hand, Citi has doubled down on its bullish gold price forecast projecting gold to reach $3000 in the next 6 to 18 months...[MORE]

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Fortunately for the bull camp, US interest rates fell back slightly on Friday with traders thinking the upward track in interest rates will now abate.

However, the Iranian drone attack directly against Israel is clearly an expansion of the fighting and could mean a country fighting a country instead of a country fighting a terrorist group...[MORE]

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In fact, overnight Chinese import, and export readings came in significantly below expectations which facilitates more anxiety toward an economy thought to have serious problems.

It is also likely that rising concerns of financial pressures on developing countries are fostering flight to quality buying of gold and silver in anticipation of a financial crisis in the emerging market sector...[MORE]

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We suspect the downgrade of China provides a measure of flight to quality buying. However, China is also the largest consumer of gold, and the last mainland China gold import tally showed a month-over-month reduction of almost 50% and therefore the downgrade could injure classic physical gold demand expectations.

In a sign of volatility potential in the current market, the Shanghai Futures Exchange implemented trading limits on gold and copper starting Friday...[MORE]

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Therefore, it is unlikely gold is tracking a classic safe harbor issue with a broad global origin.

In a slightly negative signal, both gold and silver ETF holdings declined yesterday, with the gold extraction of 299,047 ounces the largest single-day exodus in three months...[MORE]

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However, a small portion of the upside impetus is likely the failed Middle East peace talks undertaken by Egypt.

It appears that gold and silver ETF holdings have started to climb with the flat price of gold in a potential beginning of the end of the rally...[MORE]

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Certainly, the markets have been disappointed by Fed dialogue seemingly playing down and or pushing back the prospect of rate cuts!

However, the gold and silver trade will likely remain sensitive and perhaps poised to rally if today's key nonfarm payroll reading is softer and the takeaway from US data shifts sentiment toward economic risk...[MORE]

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Apparently, the latest surge was ignited by a bullish interpretation of Fed commentary yesterday reiterating the likely prospects of rate cuts "this year". Surprisingly, the Fed's vagueness on timing for a cut and even less guidance on the number of potential cuts has not deterred gold buyers or dollar sellers.

Seeing gold ETF holdings rise by 78,610 ounces yesterday and silver ETF holdings jumping by 2.8 million ounces, the record run in gold appears to have finally gotten the attention of small investors...[MORE]

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According to overnight press coverage from Asia, gold prices are being lifted by inflationary pressures resulting in the purchasing of gold as a hedge.

However, we are suspicious of that argument as inflation data has softened and delays in cutting interest rates should reduce inflationary expectations...[MORE]

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Utilizing typical market interactions, the gold run seems to be unfolding in a virtual vacuum. In fact, the gains in gold and silver prices yesterday took place in the face of heavy headwinds from a strong dollar and rising US interest rates.

While the reduced probability of three rate cuts may create economic uncertainty and a measure of anxiety, thereby providing flight to quality interest in gold, that theory is squashed by the lack of anxiety in equities and the lack of upside action in Bitcoin...[MORE]

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Another potential myth regarding the record run in gold is talk that global central bankers are dumping the dollar in favor of long gold positions.

While we suspect central bankers have investment plans in motion to buy gold, the dollar has not suffered from a massive rotation.

On the other hand, hedge fund managers continue to build their long positions...[MORE]

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However, Waller's comments do not preclude a June rate cut considering the two-month qualifying statement, with [Friday's] PCE readings for February.

This morning the CME Fed watch tool pegs the odds of a June 12th rate cut at only 55.4% compared to 64% yesterday...[MORE]

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Today's US economic report slate presents minimal news from weekly mortgage applications and a seven-year note auction at midsession.

With June gold flaring sharply higher and giving up those gains quickly yesterday, the market has given off another blowoff top signal on the charts. However, the gold market also forged a blowoff top last week and at times yesterday had recovered $42 of the $66 slide...[MORE]

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Certainly, gold will continue to draft support from the long list of flight-to-quality issues, but signs of an overbought condition in the Indian gold market is concerning.

With growing concerns of exploding gold loans, the Reserve Bank of India has instructed the country's largest gold loan non-bank finance company to halt fresh gold loans, and there are reports that Indian buyers are experiencing price shock...[MORE]

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Going into the weekend and with one holiday-shortened week left in the first quarter, both metals are vulnerable to profit-taking and additional long liquidation today.

The FOMC meeting results maintained the Fed's projection of 75 basis points in rate cuts by the end of this year, and that has increased the chances for a June rate cut which in turn provided a boost to the precious metals...[MORE]

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June gold has reached a new record high while May silver reached a 3 1/2-month high early in today's action, and both are holding onto those gains this morning.

Gold and silver have benefited from the sizable pullback in the dollar after it reached a 3-week high before the FOMC meeting results. While the dollar has found its footing, it remains well below Wednesday's high and is providing support to metals markets...[MORE]

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After this afternoon's Fed meeting results and Fed Chair Powell's press conference, gold and silver are likely to break out of those tight ranges.

The dollar has rallied to a 3-week high in a "buy the fact" reaction to the first Bank of Japan rate hike in 17 years, and that continues to pressure gold and silver prices...[MORE]

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The Broadmoor is a spectacular venue and the crowds didn't seem deterred at all by the snowstorm that began on Wednesday and continued into Thursday.

The Upstate Coin & Gold client appreciation dinner at the United States Olympic Museum was amazing!

We had many great conversations about hedging precious metals inventory, eCommerce solutions, and inventory management. We hope to continue those conversations in the weeks ahead.

Shout-out to Dane and Adam of Olevian Numismatic Rarities, Tom Hallenbeck of Hallenbeck Coin Gallery, Inc., and all the rest for freely sharing your valuable industry insights. We fully anticipate incorporating some of your ideas into upcoming product releases.

It was great to see old friends and make new connections. We look forward to seeing all of you at upcoming shows.

In the meantime, if you have questions about our product offerings or wish to get set up with a demo of the Tornado Hedging Platform, please give us a call at 312-549-9986.

There was a role reversal Monday with gold regaining the upper hand on silver as both remain close to 2024 price highs.

The dollar has extended its mid-March recovery to a 3-week high in the wake of the Bank of Japan's first rate hike since 2007 as the Yen had a "sell the fact" reaction falling to a new low for the move and that in turn put early pressure on precious metals prices...[MORE]

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The precious metals saw mixed results on Friday as gold could not shake off mild early pressure by the close, while silver rallied to a 3½-month high.

A mixed tone in recent US economic data has led to uncertainty over the Fed's rate cut outlook this year...[MORE]

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On the one hand, gold and silver prices deserved a measure of corrective weakness after such massive gains over the last two months.

However, the corrective action in gold and gold-related instruments was broad yesterday with gold mining shares giving back recent noted gains...[MORE]

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Fortunately for the bull camp, the US dollar has not rallied on stubborn signs of sticky US inflation and declining US rate cut hopes, but that could change if Tuesday's inflation concern is reconfirmed by today's inflation news.

It should also be noted that Bitcoin posted new all-time highs again and, most gold mining shares showed significant gains yesterday with Newmont and Barrick up 1.7%, Harmony gold up 3.6% and Sibanye Stillwater up 6.7%...[MORE]

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However, gold and silver should be cushioned by continued chatter about a European rate cut in June.

In today's action, the markets could simply "mark time" as the other shoe to drop (Thursday's PPI) could easily rekindle another upward pulse in the dollar and downward pulse action in gold and silver...[MORE]

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In our opinion, part of the significant rally in gold is the market's attempt to mirror the record rally in Bitcoin, with a lesser force from hopes of a June rate cut.

Clearly, traders are becoming price-sensitive as Friday's massive range-up move has stalled and trading volume has moderated significantly...[MORE]

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However, the gold market is vulnerable this morning following comments from the Indian Bullion and Jewelers Association suggesting Indian wedding season demand will soften due to record pricing.

Along those lines, the domestic Indian gold trade has seen prices shift into a discount relative to global markets, with Chinese premiums narrowing...[MORE]

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In addition to a multiweek low in US treasury yields, the gold and silver bulls were presented with a downside extension in the dollar to the lowest levels since the middle of January!

In retrospect, outside market forces for gold this week became entrenched in favor of the bull camp with a distinct pattern of US slowing evidence, a slightly dovish US Fed takeaway, and increased expectations for a June rate cut from the ECB...[MORE]

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Another bullish catalyst for gold and other physical commodities came from strong Chinese commodity imports which provides hope the Chinese economy is recovering. Keep in mind, the Chinese are the world's largest gold consumers!

However, April gold has continued to surge over the last 48 hours while Bitcoin has seemingly stalled questioning the correlation between the two markets...[MORE]

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Nonetheless, with gold and silver prices vaulting higher yesterday and gold prices forging record highs again, the bull camp retains control even without a definitively apparent bullish fundamental theme.

However, gold has forged a five-day low-to-high rally of $123 which suggests the bull camp will need some "help" from the US Federal Reserve Chairman's testimony this morning...[MORE]

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In fact, given a significant dip in eurozone producer prices of 0.9%, the prospects of an ECB rate cut in June have jumped.

Apparently, the gold and silver trade are not unnerved by the disappointing Chinese Caixin services PMI reading, but that could be the result of anticipation of a Chinese stimulus package announcement...[MORE]

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However, the CME Fed Watch tool did not show a significant increase in the probability of a June rate cut from just below 50% early last week to only 52.8% after the close Friday.

Therefore, the gold and silver markets are anticipating the continuation of soft US and international data which has already resulted in widespread talk of eurozone, Japanese, and Canadian rate cuts in June...[MORE]

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Furthermore, gold managed to shrug off headwinds from signs of slowing in the US and European economies especially with gold at times over the last several weeks seemingly benefiting from "hope" of a recovery in physical/industrial gold demand following a global macroeconomic euphoria wave.

Apparently, the gold trade interpreted yesterday's US PCE report result as a sign inflation was slowing which apparently keeps US rate cut hopes alive...[MORE]

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Fortunately for the bull camp, open interest in gold has come down significantly since the middle of last month, potentially suggesting the market found solid value earlier this month around $2,000.

Unfortunately for the bull camp, a US PCE reading above +0.3% will likely relaunch the dollar sharply higher and set the stage for a return to $2,000 in April gold in the coming sessions...[MORE]

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However, it is also possible the dollar is feeding higher off persistent hawkish views from Federal Reserve members which could be expected to reach a fever pitch just before midsession today with the Fed's Bostic, Collins, and Williams speaking just ahead of midsession.

Expectations for US GDP call for no revision in a previous growth rate of 3.3%. While not a definitive bullish impact, a Russian gold mining group indicated last year's gold production declined by 6.8% on a base output of 412,500 Troy ounces...[MORE]

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The dollar was clearly undermined by disappointing US new home sales readings for January yesterday, and we suspect the trade saw some anticipatory selling ahead of what is expected to be a very soft US durable goods report today (expectations -4.5%).

While we think softer economic activity will undermine gold and silver prices because of the recent focus on the potential for improved physical demand, it is possible a very disappointing US durable goods report will knock the dollar sharply lower and in turn help gold and silver find firm support...[MORE]

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While not a major supportive development, treasury prices have added to last week's late rebound early today.

With a lack of global economic data overnight, generally lower equities, and a veritable avalanche of US scheduled data ahead this week some gold longs might be taking profits and moving to the sidelines temporarily...[MORE]

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Spot gold edged down 0.1% to $2,033.89 per ounce as of 1005 GMT, after rising to its highest since Feb. 7 on Friday. U.S. gold futures dropped 0.3% to $2,043.30 per ounce...[LINK]

Therefore, with the downside breakout/plunge in the dollar to the lowest level since February 2nd overnight, US treasury yields potentially capping out just below three-month highs, and broad-based risk-on sentiment from good Nvidia earnings the bull camp has several credible themes.

While it is possible that gold is deriving some investment support from surging Harmony gold mining shares, the company also predicted their production would increase by 14% and they recorded higher grades of ore than year-ago levels which are limiting gold futures prices...[MORE]

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Surprisingly April gold managed the higher high despite a measure of strength in the dollar.

However, a very minor and indirect negative impact on gold overnight came from a very hot New Zealand producer price index reading which for some keeps fear of global inflation in place.

In today's early action traders will be confronted with a US Fed speech, a 20-year US treasury bond auction, and perhaps most importantly the release of the FOMC meeting minutes from the Fed's most recent meeting...[MORE]

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Spot gold was up 0.2% at $2,027.96 per ounce as of 1012 GMT. Prices had climbed to their highest since Feb. 9 earlier in the session...[LINK]

Spot gold was flat at $2,018.03 per ounce, as of 0341 GMT. Most of the U.S. markets were closed on Monday for the President’s Day holiday...[LINK]

Spot gold was up 0.3% at $2,019.99 per ounce, as of 0530 GMT, hitting its highest since Feb. 13...[LINK]

Core +0.5%, above expectations of +0.2%, vs downward revised -0.1% in Dec; 2.0% y/y, vs revised 1.7% in Dec.

Gold has softened in reaction but remains confined to yesterday's range.

While we see the current fundamental and technical trend pointing down, as expected or softer than expected PPI readings (expectations of +0.1%) could dramatically increase respect for the $2000 level and prompt a short covering wave capable of sending April gold up to $2026.

However, the trade will be presented with a second wave of US inflation information in the form of the University of Michigan five-year consumer inflation expectations report for the month of February...[MORE]

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Unfortunately for the bull camp, gold ETF holdings continue to slide with year-to-date outflows of 2.8% taking place in less than 50 days.

While Indian gold imports in January increased to $1.9 billion that is probably a function of the recovery in gold prices and not necessarily from increased volume...[MORE]

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Today the markets will have a pause from US inflation news with several Fed speeches potentially providing some fireworks.

However, the US dollar is sitting right on the spike-up highs from yesterday early today leaving the currency influence on gold and silver bearish...[MORE]

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The gold/silver ratio was just above 92 at yesterday's close and approaching the 17-month high reached in mid-January.

The dollar remains well below Monday's 2 1/2-month high which has underpinned metals prices early today.

Fed speakers gave mixed comments on upcoming Fed policy yesterday, and the market's disappointment that there was not an overall dovish tone has weighed on gold and silver prices...[MORE]

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Silver prices have reached a 2-week low while platinum and palladium are also under moderate early pressure.

The Dollar has extended its pullback after a surprise downtick from a private survey of US economic optimism, which carried more weight with the market than usual on Tuesday as there were no top-tier US economic numbers to digest...[MORE]

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Global silver demand is forecast to reach 1.2 billion ounces in 2024, which would mark the second-highest level on record, the Silver Institute said in a recent report...[LINK]

Spot gold was last down 0.08% to $2,033.79 per ounce. U.S. gold futures fell 0.09% to $2,049.30 per ounce...[LINK]

Fed Chair Powell's comments on 60 Minutes put to rest any ideas that the Fed would consider cutting rates in March, and this sparked a breakout rally in the dollar to its highest level since November 14.

Comments from other Fed officials reinforced this stance, with Fed Governor Michele Bowman saying it is too soon to consider lowering interest rates and Chicago Fed President Austin Goolsby saying he wants to see more inflation progress...[MORE]

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With the gold market adding to the January recovery rally last week before failing and reversing the market was giving off technical signs of an intermediate top last week.

Unfortunately for the bull camp, outside market impacts of the dollar and treasuries shifted patently bearishly after the much stronger-than-expected US nonfarm payroll reading...[MORE]

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Sentiment toward gold early today is disappointing to the bull camp as a downside breakout in the dollar has not produced a wave of fresh buying yet.

In fact, it should be noted that the March dollar index fell below its 200-day moving average and posted a seven-day low in the early trade...[MORE]

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Spot gold was down 0.1% to $2,054.29 per ounce. U.S. gold futures were up 0.1% to $2,071.40...[LINK]

Global economic news overnight was mixed to slightly softer, which might be considered a negative to gold but more so to silver given its industrial focus.

However, the overriding weight on the back of gold prices this morning is clear sentiment from the US Fed chairman that a rate cut in their next meeting in March is not their base case...[MORE]

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Spot gold eased 0.1% at $2,034.37 per ounce by 03:10 p.m. ET (2010 GMT) after rising as much as 1% earlier in the session. Bullion was down 1.3% this month but have held above the $2,000 per ounce psychological level so far this year...[LINK]

Outside market influences early today are offsetting with supportive treasuries countered by minimal strength in the dollar.

The gold market is likely experiencing some headwinds following the release of the World Gold Council's latest report. In fact, global gold demand fell by 5% last year even without including the negative demand registered by outflows from ETF and OTC gold-based instruments...[MORE]

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Furthermore, the market should find fresh support from news that Indian 2023 gold imports in their latest fiscal year increased by 26.7%.

However, comparative Indian gold imports from the prior year were also sharply higher potentially suggesting an improved Indian gold import pattern...[MORE]

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However, with a stronger Dollar to start, the positive start in gold and silver might indicate the metals are embracing flight to quality uncertainty from China which saw a major property company forced by a Hong Kong Court to liquidate its assets.

The markets continue to see chatter regarding rate cuts from the ECB and stories suggesting the Fed is already acting which signal a pivot...[MORE]

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Therefore, gold may see some limited flight to quality buying interest, but as mentioned many times over the last year, the gold and silver trade are not as sensitive to flight to quality events as in the past.

On the other hand, if the situation becomes dire and there is a chance of contagion that could pull in a noted measure of spec and fund longs...[MORE]

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However, we see no reason to take control away from the bear camp with the hedge funds reducing their long positioning last week, another week of ETF holding declines, an overbought net spec and fund positioning, a residual negative global commodity market environment, and perhaps most importantly from growing economic concerns in China.

With the last COT positioning report showing the net spec and fund long in gold near the highest levels since May 2022, falling trading volume and declining open interest on last week's recovery bounce, the bear camp retains control over the trend...[MORE]

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In fact, despite initial weakness in the dollar, disastrous retail sales readings from the UK should leave the dollar in favor and physical commodities like gold off balance.

Furthermore, US treasury yields have clawed higher this week with yields overnight reaching the highest level since December 13th...[MORE]

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In addition to hawkish ECB dialogue predicting no rate cuts until summer, expectations for a US cut have been pushed further into the future with US data continuing to signal an economy holding together which in turn has been accompanied by a consistent reduction in the probability of a first quarter US rate cut.

However, the bull camp should get some credit for prices tracking in positive territory this morning especially with the Chinese Premier discounting the prospects of a stimulus package from the government...[MORE]

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However, the charts in the dollar project higher action ahead, and the US economic reports slate today is very active potentially rekindling rate cut timing debate.

In the end, the dollar is underpinned, and gold is pressured from Fed Gov. Waller's comments yesterday cautioning the Fed against rushing to cut rates before establishing inflation has been slayed...[MORE]

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Adding to the bearish track for gold and silver to start the new trading week, US treasury yields are climbing and gold ETF holdings at the end of last week had posted nine straight days of outflows, with holdings last week reduced by 656,635 ounces. Year-to-date gold ETF holdings are already down 1.2% while silver ETF holdings are down only 0.6% year-to-date.

From a longer-term perspective, the gold market could see lift from Chinese President Xi Jinping who announced China would push for high-quality development of its financial sector and would accelerate the creation of a modern financial system as that necessitates the need for a faster expansion of Chinese central bank gold reserves to backstop its currency in the eyes of the world trade...[MORE]

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Spot gold was down 0.8% at $2,037.40 per ounce, as of 1212 GMT. U.S. gold futures fell 0.5% to $2,041.50...[LINK]

Spot gold was up 0.3% at $2,053.51 per ounce, as of 1320 GMT. U.S. gold futures rose 0.3% to $2,058.00, with trading expected to be low due to the Martin Luther King Day holiday...[LINK]

Apparently, the oil and precious metal markets see the onshore strikes in Yemen as an escalation and perhaps a catalyst for an expansion of military aggression in the area.

While the crude oil market is only up $2.40, a flight-to-quality situation is unfolding and has sparked an unusual migration to gold and silver...[MORE]

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Spot gold was up 1% at $2,048.20 an ounce at 1254 GMT, extending its run above the $2,000 level to nearly a month. U.S. gold futures were up 1.7% at $2,053.50...[LINK]

Fortunately for the bull camp in gold and silver the action in bond and dollar markets this week has not shifted definitively bearish from the reduction in rate cut expectations but today presents a possible breakout session with a dollar trade above 102.385 a big problem for the bull camp.

On the other hand, a trade in the dollar below 101.835 could save the day for the bull camp and launch February gold above $2050...[MORE]

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Spot gold was up 0.5% at $2,033.70 per ounce, as of 1206 GMT. U.S. gold futures also rose 0.6% to $2,038.90...[LINK]

The range trade is certainly justified considering that neither gold nor silver has a definitive internal fundamental driven bias with prices of gold within proximity to all-time highs and the speculative positioning in gold futures and options leaving the market vulnerable to stop loss selling on violations of key support.

With the US dollar posting a higher high yesterday and posting a higher low, and treasury prices likely to remain capped, the gold market could fail at the $2,025 level in the coming sessions...[MORE]

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Spot gold gained 0.2% to $2,033.90 per ounce, as of 1148 GMT. U.S. gold futures rose 0.3% to $2,040.00 per ounce...[LINK]

In fact, it should be noted that the declines in gold have been accompanied by periodic jumps in trading volume which we think confirms the downward tilt.

While gold has seen outside market influence wain, treasury prices appear to be trending negative for gold, and we see the general impact from outside markets as bearish in the near term...[MORE]

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Spot gold was up 0.5% at $2,038.99 per ounce after hitting its lowest level since Dec. 18 on Monday. U.S. gold futures rose 0.6% to $2,045.4 per ounce...[LINK]

Certainly, the gold bulls were initially heartened by the failure to sustain dollar gains after a better-than-expected US jobs report but given the lack of definitively bullish internal fundamental storylines for gold, the bull camp "needs" a definitively weaker dollar!

Not surprisingly, investors remain cool toward gold with ETF holdings last week falling by 349,662 ounces leaving holdings down 0.4% early in the new year...[MORE]

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Spot gold slipped 0.9% at $2,027.87 per ounce as of 1033 GMT, hovering near its lowest level since Dec. 19 touched in the last session. U.S. gold futures GCcv1 fell 0.7% to $2,034.40...[LINK]

In other words, without a surprisingly weak jobs report reductions in the probability of a March rate cut should continue.

Keep in mind, US non-farm payroll counts are still "growing" (albeit monthly additions are shrinking) and impatient bond traders have started to question their perception of the potential for a March cut...[MORE]

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Spot gold was down 0.2% to $2,038.49 per ounce as of 1223 GMT. U.S. gold futures fell 0.2% to $2,045.40...[LINK]

Although the depth of this bull move is questionable as many bond traders have cut their March rate cut probabilities to 70%, from 85%, sending US rates higher.

With other nations potentially cutting interest rates more aggressively than the Fed, the dollar is at risk of staying stronger than expected, putting pressure on gold prices, even despite potential rate cuts. Gold bulls must take this shift in timing and probabilities seriously...[MORE]

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Spot gold was up 0.2% to $2,044.69 per ounce as of 1210 GMT, after hitting its lowest since Dec. 21 on Wednesday. U.S. gold futures rose 0.5% to $2,052.10 per ounce...[LINK]

This gold sell-off comes as central banks continue to talk about the need for weaker economic data before they discuss rate cuts, and, on cue, we saw better-than-expected employment data in Europe, adding to worries of a slower-than-expected central bank pivot.

Furthermore, the trade today could see early selling intensify if US ISM manufacturing data comes in positive as expected especially with the afternoon release of the FOMC meeting minutes as any pushing back of US rate cut timing is clearly a major blow to the bull case...[MORE]

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Spot gold was down 0.3% to $2,053.10 per ounce. U.S. gold futures were down 0.5% to $2,062.20 per ounce...[LINK]

There is fear that this might be the start of a deeper regional destabilization following the US Navy's sinking of three Houthi ships in the Red Sea, and Iran sending a warship into the Red Sea.

US interest rates were higher overnight and the dollar managed to rally sharply to start the year...[MORE]

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Spot gold is on track to post a 13% annual rise in 2023, its best year since 2020, trading around $2,060 per ounce...[LINK]

Certainly, a slight uptick in implied treasury yields suggests the rate-cut mentality is at least temporarily overplayed.

On the other hand, today's US initial and ongoing claims data will likely revive the rate cut watch with the probability of Fed easing rising incrementally with each soft US data point...[MORE]

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Spot gold was steady at $2,072.09 per ounce at 1206 GMT after earlier rising as high as 2,088.29, the most since Dec. 4. U.S. gold futures were down 0.5% at $2,082.20...[LINK]

In addition to the constant lift from the fully entrenched expectation of lower global rates gold and silver are likely to benefit from favorable Chinese industrial profit results as China remains the number one consumer of gold.

Apparently, the Chinese central bank has predicted China will achieve its 5% growth target next year and that combined with signs of continued cash infusions from the Bank of India provides a very solid demand base...[MORE]

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Spot gold was flat at $2,067.14 per ounce, not far from an over two-week high of $2070.39 hit on Friday. Bullion was on track to mark an over 10% gain this year — its best since 2020...[LINK]

Spot gold was up 0.4% at $2,062.63 an ounce near 7:30 a.m. ET after hitting a more than two-week high of $2,070.39 in the previous session. U.S. gold futures rose 0.2% to $2,073.20...[LINK]

In other words, "significant" declines in UK, eurozone, and Italian inflation (Italian year-over-year producer prices declined by a startling 12.6%) directly or indirectly provide the US Fed with evidence that US inflation is also poised to fall.

While the CME Fed funds watch tool has not registered a significant increase in the probability of a March US rate cut this week, it is possible that reality is catching up with what the Feds Goolsbee earlier this week indicated was market expectations for cuts running ahead of the Fed's internal dialogue...[MORE]

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Spot gold was up 0.3% at $2,034.79 per ounce, as of 1217 GMT, trading in a narrow $10 range in the session so far. U.S. gold futures fell 0.1% to $2,046.30...[LINK]

In fact, the CME Fed watch tool raised prospects of a January 31st cut by 4% to 12.4% and increased its March rate cut prospect to 71%.

However, despite renewed rate cut chatter and a downward bias in the dollar both gold and silver are trading lower signaling a lack of bullish sensitivity today...[MORE]

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Spot gold was little changed at $2,032.60 per ounce, as of 0131 GMT. U.S. gold futures fell 0.2% at $2,046.10...[LINK]

However, an offset to the negative demand signals from declining Swiss gold exports is the fact that Chinese purchases from Switzerland increased by ten percent on 25 tons in sales versus the lower 16.4 ton sales to India.

With both volume and open interest falling off and given the reversal from last week's highs, we suspect the bullish bias from last week has run its course...[MORE]

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Spot gold was steady at $2,026.30 per ounce. U.S. gold futures were also flat at $2,041.20...[MORE]

While we suspect gold and silver will take a huge amount of direction from the dollar and from US treasuries there is a developing physical demand threat from ongoing malaise in the Chinese economy.

The struggling Chinese economy is partially verified by ongoing weakness in Chinese equity markets relative to the very impressive gains in global equity markets...[MORE]

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Spot gold was up 0.3% at $2,025.49 per ounce. U.S. gold futures were higher by 0.2% at $2,039.40...[LINK]

Evidence of the bulls piling on the trade was seen overnight from Commerzbank predicting gold to reach $2150 in the second half of next year and silver to reach $30 per ounce by the end of next year.

As we have indicated in financial market coverage all week the magnitude of the anticipated pivot by the Fed, after a historic rate hike cycle obviously justifies a significant and sustained reaction in precious metal prices...[MORE]

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Spot gold, which edged up 0.3% at $2,041.70 per ounce, has risen 1.9% so far this week. U.S. gold futures gained 0.6% to $2,056.40...[LINK]

As in other markets, near-term overbought technical signals in gold and silver should be ignored by the markets today, as traders continue to embrace euphoria which is likely to extend through today's session.

Obviously, the sharp slide in the dollar and the precipitous drop in interest rates combined with a dovish Fed is a perfect bullish storm that is likely to be capable of attracting buying fuel despite a quickly expanding and overdone net spec and fund long positioning...[MORE]

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Spot gold was 0.4% higher at $2,034.35 per ounce, after surging 2.4% on Wednesday. U.S. gold futures jumped 2.6% to $2,049...[LINK]

In fact, further evidence of the negative bias toward gold and silver is the lack of support from a resumption of a falling US interest rate environment.

The bear camp should also be emboldened by the prospects of slumping Chinese physical demand as troubles in the Chinese economy (verified by continued weakness in Chinese equity markets and a disappointing new loan report) should crimp Chinese gold imports...[MORE]

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Spot gold gained 0.1% at $1,981.30 per ounce, as of 1157 GMT. U.S. gold futures rose 0.2% to $1,997.60...[LINK]

A pullback in the Dollar has provided gold and silver with early support in front of this morning's critical US inflation data after gold and silver moved below their 200-day moving averages yesterday.

Expectations for a soft US CPI report later today should strengthen the bull case if the report matches expectations of a gain of 0.1%...[MORE]

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Spot gold was up 0.4% at $1,988.69 per ounce, as of 1211 GMT. U.S. gold futures rose 0.5% to $2,004.10...[LINK]

From a technical perspective, the massive rally last week exhibited a classic blowoff top and reversal with confirmation from an explosion in trading volume and a subsequent decline in open interest.

From a fundamental perspective, the mainstay of the bull case in precious metal markets since October has been a weakening dollar which now appears to have recovered especially with the market's decision that despite signs of US slowing, the US will likely hold up better than most in the face of the lagged headwinds from the unprecedented rate hike cycle...[MORE]

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Spot gold was down 0.4% at $1,994.70 per ounce. U.S. gold futures eased 0.3% to $2,009.10...[LINK]

Recently, the focus of gold and silver has shifted primarily to the dollar with US treasury rates a secondary and inconsistent influence.

Pushed into the market, we favor the bear track with the aggressive blowoff reversal and a follow-through slide in gold and silver prices this week threatening the bull camp...[MORE]

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Spot gold was up 0.1% at $2,029.49 per ounce by 1203 GMT. Bullion, however, has fallen nearly 1.9% for the week so far. U.S. gold futures were flat at $2,046.00...[LINK]

Yesterday the laser focus on the prospect of a US rate cut early next year was lost again as cumulatively this week's jobs reports have signaled slowing.

Perhaps the trade is waiting for ultimate confirmation of slowing from the most important jobs report of the cycle, the nonfarm payroll report on Friday...[MORE]

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Spot gold rose 0.4% to $2,032.90 per ounce by 1155 GMT. U.S. gold futures gained 0.1% to $2,050.20...[LINK]

Bulls will be watching this morning's ADP data for evidence of further weakness in the US economy that might warrant Fed dovishness

.

The Perth Mint reported that gold sales jumped 26.52%, to 53,520oz this month, as the demand for physical bullion surged...[MORE]

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The trend underscores heightening uncertainty about growth prospects in the world's second-largest economy, which has not recovered from COVID-19 lockdowns as fast as consumers and job hunters had expected...[LINK]

Spot gold rose 0.2% to $2,023.62 per ounce by 1247 GMT. U.S. gold futures gained 0.3% to $2,041.60...[LINK]

In fact, today's US scheduled data window will likely add or subtract to the first quarter rate cut assumption (generally held by the trade), but we give the edge to the dollar bears/gold bulls from the potential for a softening US economy take away through this morning's US reports.

We must note the lack of a flight to quality surge in gold overnight following Moody's downgrade of Chinese credit especially with a lack of gold buying following a noted uptick in Chinese credit default swap rates...[MORE]

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Spot gold was down 0.3% at $2,024.30 per ounce by 1200 GMT. Bullion had climbed to an all-time high of $2,135.40 on Monday, before dropping more than $100 in a single day to close 2% lower...[LINK]

With the dollar showing early strength and US treasuries showing slightly higher yields, the gold and silver markets obviously received buying from something other than their recent focus.

It appears the markets garnered flight to quality buying from two separate issues related to military events. Flight to quality issues thought to be lifting precious metal prices overnight were the ballistic missile attack of two Israeli ships and Chinese accusations that the US Navy "seriously violated" their sovereignty after sailing into the South China Sea...[MORE]

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Gold prices are on course to hit fresh highs next year and could remain above $2,000 levels, analysts said, citing geopolitical uncertainty, a likely weaker U.S. dollar and possible interest rate cuts...[LINK]

However, the jury is out on the impact of today's PCE and initial claims readings, with soft PCE and higher initial claims data still capable of resurrecting the bull case in gold and silver.

Therefore, further evidence of a US Fed pivot early next year to lower rates has been heavily factored with the November low-to-high rally of $127 and it now needs fresh bullish fuel...[MORE]

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Spot gold eased 0.3% to $2,038.59 per ounce by 1207 GMT. Bullion is up 2.8% so far this month after rising 7.3% in October...[LINK]

It should also be noted that several prominent fund/money managers have predicted US rate cuts in the first quarter of 2024 and that combined with a developing pattern of softer US data should leave the dollar in a downward track and in turn leave gold and silver in upward tracks.

Along those lines, today's scheduled data could present a temporary dip in gold if US GDP readings match expectations of a minimal improvement...[MORE]

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Spot gold gained 1.4% at $2,041.55 per ounce by 3:00 p.m. ET (2000 GMT), highest since May 10...[LINK]

However, the trade will face another US note auction today (seven-year notes), and we caution traders against assuming somewhat positive auction results today as was noted from the short-end auction yesterday.

In conclusion, another average auction result and/or a soft auction will thicken resistance over gold and weaken support under gold...[MORE]

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Spot gold was steady at $2,013.59 per ounce by 1306 GMT, after hitting its highest since May 16 earlier in the session...[LINK]

Therefore, the gold trade continues to focus on dollar and interest rate action at the expense of classic internal supply and demand developments.

In fact, while the story should be regarded as "old" the trade continues to pound the drum on an on-hold global central bank theme...[MORE]

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Spot gold was up 0.5% at $2,012.33 per ounce by 1147 GMT, after reaching its highest since May 16 at $2,017.82. U.S. gold futures also rose 0.5% to $2,013.10...[LINK]

Gold is still digesting yesterday's FOMC Minutes as it shows the Fed is weary of worsening financial conditions. But with the bond yields failing to fall further overnight, we might expect gold bulls to take a break.

Today's focus will be on this morning's Durable Goods release, where the market is expecting a rather large drop from last month...[MORE]

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Spot gold was up 0.1% at $2,000.38 per ounce as of 1201 GMT, after rising as high as $2006.19 earlier in the session. Bullion scaled a three-week high of $2,007.29 on Tuesday...[LINK]

In our opinion, the gold and silver are primarily focused on action in the dollar. With the dollar (and many non-dollar currencies) sitting on 200-day moving averages, several trend signals could be in the offing.

Part of the bullishness from the 53% jump in Swiss gold exports last month was factored in following news last week that Indian gold imports had jumped sharply...[MORE]

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Spot gold climbed 0.5% to $1,987.79 per ounce, as of 1215 GMT, after hitting its highest level since Nov. 3 earlier in the session...[LINK]

In fact, with the Indian government pegging October gold imports jumped by 60% over year-ago levels (the highest in 31 months), a surging bear case in the dollar, and expectations the FOMC meeting minutes will again confirm the US rate hike cycle is done, the gold market should be up $11 instead of down $11.

In addition to the strong jump in Indian gold imports, the Reserve Bank of India added 9 tons of gold in the third quarter which should revitalize hopes of ongoing global central bank gold purchases...[MORE]

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Spot gold was down 0.4% at $1,972.26 0 per ounce as of 1146 GMT, after rising as high as $1,993.29 on Friday. U.S. gold futures fell 0.5% to $1,974.60...[LINK]

However, we favor the downward tilt with the euphoria from the end of the historic US interest rate hike cycle fully injected into gold and silver prices with the rallies earlier this week.

We think the focus will be primarily on US continuing claims this morning which will be followed by what is expected to be soft US heavy industry/manufacturing data...[MORE]

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Spot gold gained 0.3% to $1,965.08 per ounce, as of 1056 GMT. U.S. gold futures rose 0.2% to $1,967.70...[LINK]

However, the market's reaction to the second key US inflation reading (PPI) should be less significant as the trade has priced a large portion of the "end of the historic rate hike cycle" mentality.

On the other hand, the gold market is not without fresh bullish developments with India reporting a significant jump in gold imports...[MORE]

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Spot gold rose 0.4% to $1,970.45 per ounce at 1224 GMT, after earlier touching its highest since Nov. 7. U.S. gold futures also gained 0.4% to $1,974.70...[LINK]

We also see the fundamental bias pointing down in gold and silver as a muted US CPI reading fosters a thin measure of long liquidation from long-suffering gold inflation bulls.

However, the bull camp hopes that muted inflation will spark talk of the end of the rate hike cycle and potentially provide a measure of misguided buying off talk of rate "cuts" next year...[MORE]

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Spot gold was little changed at $1,947.39 per ounce, as of 1021 GMT, trading in a narrow range of $6, after hitting its lowest in more than three weeks on Monday. U.S. gold futures rose 0.1% to $1,951.30...[LINK]

With the last day of Diwali tomorrow the opportunity for Indian festival demand is past.

While there will be an avalanche of global inflation readings this week, we do not see that information playing a determining role for gold and silver prices, and most readings are expected to show only incremental changes it is unlikely there will be a definitive opinion on the direction of upcoming central bank policy changes.

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Spot gold was little changed at $1,936.67 per ounce, as of 1212 GMT. U.S. gold futures gained 0.2% to $1,940.60...[LINK]

While the selling yesterday was reportedly from the hawkish Fed chairman dialogue, that is unlikely the source of today's noted weakness as the gold market recovered and closed in positive territory yesterday after the Fed news yesterday.

Even though the gold market has not shown consistent interest in flight to quality issues, we see a major financial and economic market decision in the coming seven days...[MORE]

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Autocatalyst palladium, meanwhile, extended its slump en route to its worst week in over 15 months, hurt by excess stocks amid wider adoption of electric vehicles while automakers switch to cheaper platinum...[LINK]

However, generally dovish chatter in the market has not provided gold with any support which clearly points to a bearish preference by the trade.

With an avalanche of global central banker speeches this morning and the Fed chairman yesterday indicating he thinks Fed economic forecasters need to be open-minded and consider inputs beyond typical indicators gold isn't even looking for bullish prospects...[MORE]

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Spot gold was down 0.1% at $1,948.39 per ounce by 1141 GMT after hitting its lowest since Oct. 18. U.S. gold futures fell 0.2% to $1,953.30...[LINK]

In fact, a notable Gold ETF holdings inflow yesterday of 136,494 ounces and news that the UK government is sanctioning two of Russia's largest gold producers (Nord Gold and Highland Gold) have been largely discounted by the financial Press this morning. In fact, the UK government indicated they are especially cracking down on Russian gold and oil networks that are providing funding for the Russian war economy!

Unfortunately for the bull camp typical bearish dollar developments are being discounted in the currency trade and perhaps more importantly the prospect of further declines in US treasury yields has been pushed to the sidelines by Dollar traders...[MORE]

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Spot gold was down 0.3% at $1,961.70 per ounce by 1227 GMT. U.S. gold futures slipped 0.2% to $1,968.80...[LINK]

Some of the normal bullish gold catalysts have been completely discounted. Furthermore, Benjamin Netanyahu announced that Israel will now take 'indefinite' control over Gaza, and that has failed to give support to gold prices.

On the bullish side, China recorded a record gold holding this month with 71.2Mn ounces. What makes this data unique is the fact that Chinese FX reserves dropped sharply over the past three months, which normally signals weaker gold demand, as they dollar-cost-average their holdings...[MORE]

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Spot gold fell 0.5% to $1,967.09 per ounce by 1050 GMT, its lowest since Oct. 25. U.S. gold futures dropped 0.8% to $1,973.50...[LINK]

With the war lacking flight to quality type anxiety, traders will now start to turn their focus back to the Fed Chairman speech on Wednesday.

Despite two-sided volatility in the dollar last week and a range of 220 points, ultimately a downside breakout to the lowest level since September 20th is a major technical signal of a top in the dollar...[MORE]

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Spot gold was down 0.3% at $1,987.29 per ounce at 1152 GMT after rising above the key $2,000 level on Friday. U.S. gold futures fell 0.2% to $1,994.50...[LINK]

On the political front Asian nations are now asking Iran to go get their foreign nationals from Hamas, while Anthony Blinken arrives in Israel to try and negotiate a "humanitarian pause".

This comes after the IDF started to demolish houses belonging to terrorists in Gaza. Israeli defense forces were reported to have cut Gaza into two, wedging their forces from the Mediterranean coast to isolate the Hamas-rich northern part of Gaza.

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Spot gold ticked up 0.1% to $1,987.79 per ounce by 1154 GMT, trading in a tight $6 range. U.S. gold futures also rose 0.1% to $1,995.40...[LINK]

Obviously, the idea that the Fed will be on hold in the December 13th meeting, the downside breakout in US treasury yields today, and the definitive reversal/gap downslide in the dollar early this morning gives the edge to the bull camps in gold and silver.

However, the initial gains are somewhat disappointing given the noted favorable shift in market psychology, especially with the potential for the war to provide out-of-nowhere buying...[MORE]

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Spot gold was up 0.3% at $1,988.40 per ounce at 1120 GMT. U.S. gold futures gained 0.5% to $1,996.70...[LINK]

Of more importance today is the Federal Reserve's interest rate decision and, more importantly, wording from the statement and Fed press conference.

While the gold market has displayed some bullish resiliency throughout October, a lack of incendiary developments in the Middle East and renewed strength in the US dollar initially stalled December gold again around the $2,017.70 level and ultimately prompted a wave of long profit-taking yesterday...[MORE]

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Spot gold was little changed at $1,983.32 per ounce by 1214 GMT. U.S. gold futures ticked lower by 0.1% to $1,992.40...[LINK]

This comes as the Israelis clinched the key thoroughfare that connects northern Gaza with the south.

The bull camp should be further deflated from the lack of gains this morning following declines in the dollar and a surprising and massive single-day gold ETF inflow of 690,904 ounces yesterday...[MORE]

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Spot gold was unchanged at $1,996.11 per ounce by 0910 GMT, having spiked as high as $2,009.29 on Friday. U.S. gold futures were also steady at $2,005.80...[LINK]

Spot Gold Daily Chart through 10/30/2023

With the IDF expanding ground operations into the Gaza Strip, there is growing concern that Iran may prompt Hezbollah, its proxy in the north, to open a second front against Israel. According to an op-ed in Monday’s Wall Street Journal, “Tehran can’t sit back and watch Israel obliterate Hamas.”

In an effort to quell the potential for expansion to a broader regional conflict, the U.S. continues to deploy additional troops and advisors to the area. Iranian-backed militias have already perpetrated attacks against U.S. forces in Syria and Iraq.

While the war in the Middle East seems to have pushed Ukraine from the headlines, that war rages on as well. Russia launched an offensive this month in an effort to take the town of Avdiivka in the contested Donbas region. Both sides are reportedly experiencing heavy losses.

Russian defense minister Sergei Shoigu speaking at a defense forum in Beijing accused the U.S. of stoking geopolitical tensions and warned of the risk of conflict between nuclear-armed countries. “Having provoked an acute crisis in Europe, the West is seeking to spread conflict potential to the Asia-Pacific region, and in several directions,” said Shoigu.

Robust U.S. economic data may be tempering the upside for gold amid rising concerns that the Fed may hike rates again before year-end. Advance Q3 GDP came in at a blistering 4.9% pace, the fastest pace in nearly 2 years.

Consumer spending is the driving force, but analysts wonder how long it can last. Evidence suggests that savings are being depleted and consumers are increasingly turning to credit cards.

The average APR on retail credit cards hit a new all-time high of 28.93% according to Bankrate. Even bank cards are approaching 30% APR for those with less than pristine credit ratings.

A CFPB report found that credit card companies charged borrowers a record-high $130 bln in interest and fees in 2022. Total credit card debt is now more than $1 trillion, while total household debt exceeded $17 trillion at the end of Q2.

American consumers are seemingly following the lead of their government, which has accumulated more than $30 trillion in debt. Spending what you do not have is de rigueur, putting the Fed in a bit of a bind.

 Silver

Silver closed down 1.16% last week, ending the string of higher weekly closes at two. The white metal is not garnering the same haven interest as gold, focusing instead on the economic uncertainty associated with war along with the rest of the commodity complex.

Spot Silver Daily Chart through 10/30/2023

The rally since the beginning of the Middle East conflict has stalled in a range where the major moving averages have converged. The old range that held for much of the summer between $26.14 and $22.11 is back in play.

Selling silver in a flight-to-quality environment is not a particularly attractive play. Look for at least a slight upward bias to persist, particularly if the Fed remains on hold. If gold pushes higher toward new all-time highs, investors may well turn to silver as a less-expensive alternative.

A rebound above the $24.05 Fibonacci level would set a more favorable tone within the range, shifting focus to the $25.27 high from 17-Jul.

A retreat below $22.00 would suggest potential for further retracement to $21.57.

PGMs

 Platinum jumped nearly 3.5% on Monday, adding to gains seen over the previous three weeks. The breach of nearby technical levels may have sparked the gains, sending platinum back above the midpoint of the Covid-era range as well as the 100-day SMA.

Spot Platinum Daily Chart through 10/30/2023

A Bloomberg article over the weekend suggested that traders and banks were showing renewed interest in Russian metals. This may be impacting prices favorably at least initially even though in theory it could conceivably increase the supply of PGMs.

Palladium is off the 5-year low set last week, but upticks appear to be corrective in nature. The trend remains definitively bearish.

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 positioning in the Commitments of Traders for the week ending October 24th showed Managed Money traders net bought 48,815 contracts and are now net long 90,682 contracts. Non-commercial & non-reportable traders were net long 169,754 contracts after increasing their already long position by 43,725 contracts.

With the December gold contract into the high Friday sitting $37 above the level where the last positioning report was measured, the net spec and fund long is only the highest since July...[MORE]

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Spot gold was down 0.6% at $1,993.71 per ounce by 0936 GMT. U.S. gold futures rose 0.3% to $2,003.50...[LINK]

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Spot gold was steady at $1,985.30 per ounce by 0950 GMT. U.S. gold futures fell 0.1% to $1,996.20...[LINK]

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Spot gold rose 0.4% to $1,986.69 per ounce by 1131 GMT, trading just shy of its highest level since May 16 hit on Friday...[LINK]

So far this week, the primary focus of the gold and silver trade has been on bond yields, with less sensitivity to the dollar.

Nonetheless, strength in the dollar following positive US scheduled data yesterday and renewed fears of a European recession indirectly pressured gold yesterday...[MORE]

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Spot gold was flat at $1,970.13 per ounce by 0948 GMT, having declined in the previous two sessions and trading below a five-month high hit last week...[LINK]

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Spot gold was down 0.3% at $1,967.20 per ounce by 0946 GMT. U.S. gold futures fell 0.5% to $1,978.70...[LINK]

Spot Gold Daily Chart through 10/23/2023

A modicum of optimism surfaced with the recent release of a small number of hostages by Hamas. The Biden administration has asked Israel to delay any ground invasion as they attempt to negotiate the release of more hostages.

Israel has allowed several aid convoys to enter Gaza via the Rafah crossing from Egypt, an easing of the initial total blockade.

However, the death toll continues to rise in Gaza as withering Israeli airstrikes continue. Concerns that the conflict could expand are considerable.

Skirmishes have already erupted on Israel’s borders with Lebanon and Syria. Over the weekend an Israeli tank “accidentally” fired on an Egyptian border post. There were also reports that Israeli missiles struck airports in Syria.

The U.S. continues to send military aid to Israel in the form of advisors and replenishment of ammunition drawn down in the first weeks of the war. The U.S. is also positioning military assets in the region, including two carrier strike groups, as a strong warning to regional actors that might consider getting involved.

As long as geopolitical tensions remain elevated, the downside in gold should be limited. Monday’s low at $1964.42 protects secondary support at $1953.05/$1946.33, and more important chart/Fibonacci support at $1927.24/$1925.90.

On the upside, $2000 is the next significant barrier, which is bolstered by Friday’s high at $1997.26. A push above $2000 would highlight the May high at $2067 with potential to the all-time high of $2075.28 in 2020.

Silver

Silver gained nearly 3% last week. It was the second consecutive higher weekly close, but the white metal was unable to sustain the initial push back above the 100- and 200-day moving averages.

Spot Silver Daily Chart through 10/23/2023

Silver has certainly garnered flight-to-quality support over the past two weeks. In fact, silver gains since the Hamas attack on Israel have been greater than those of gold. However, the white metal is arguably more vulnerable to the persistent rise in U.S. rates.

On Monday, the U.S. 10-year yield exceeded 5% for the first time since 2007. Advance Q3 GDP comes out on Thursday and median expectations at for a +4.5% print, although the whisper is +5.0%

Growth that is more than double that of Q2 has rather dire implications for inflation. At the moment Fed funds futures continue to suggest the central bank is on pause through year-end, but a GDP beat and a strong PCE chain price index print on Friday would likely increase the probability of a December rate hike.

Given the geopolitical risks and rising yields, it’s hard to believe recent downticks on the dollar are anything other than corrective. If the greenback resumes its climb, short-term upside potential in silver may be limited.

A definitive push above $24 would set a more favorable tone within the range. Friday’s high at $23.70 now provides a good intervening barrier.

A retreat below support at $22.19 would suggest a weaker tone, with potential back to $21.83.

PGMs

While platinum has posted two consecutive higher weekly closes, it remains below the midpoint of the Covid-era range. Upticks have been lackluster, suggesting the downside remains vulnerable.

Spot Platinum Daily Chart through 10/23/2023

Fresh lows for the year below the 06-Oct low at $849.25 would lend credence to the scenario that calls for a challenge of last year’s low at $796.33. A rebound above $922.32/926.66 would ease short-term pressure on the downside somewhat.

Palladium remains on the ropes after reaching a new 5-year low on Monday. While a key reversal occurred, any follow-through gains that materialize would be viewed as corrective within the well-established downtrend.

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.

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Spot gold was down 0.2% at $1,978.07 per ounce by 1126 GMT, and U.S. gold futures eased 0.2% to $1,989.80...[LINK]

Unfortunately for the bull camp gold and silver ETF instruments continue to see outflows, with the outflows from silver instruments this week significant with year-to-date sales of 34.5 million ounces and yesterday the seventh straight daily outflow of silver ETF holdings.

In retrospect, with gold rallying in the face of an upside breakout in US treasury yields yesterday, the flight-to-quality theme is clearly dominating the trade and that should continue to lift gold, especially with expectations of Israeli troops moving into Gaza for what the media labels as a "ground war"...[MORE]

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Spot gold was up 0.4% at $1,980.80 per ounce by 1143 GMT, after hitting its highest since July 20. U.S. gold futures added 0.6% to $1,992.50...[LINK]

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Spot gold rose 0.1% to $1,950.49 per ounce by 1141 GMT after hitting its highest since Aug. 1 in the previous session. U.S. gold futures eased 0.3% to $1,962.30...[LINK]

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Spot gold rose 1.1% to $1,944.90 per ounce by 1131 GMT, its highest since Sept. 20. U.S. gold futures jumped 1.2% to $1,958.90...[LINK]

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Spot gold was up 0.2% at $1,923.78 per ounce by 1122 GMT, and U.S. gold futures rose 0.1% to $1,936.70...[LINK]

Spot Gold Daily Chart through 10/16/2023

With an Israeli ground offensive into Gaza thought to be imminent, and amid worries that the conflict could expand, look for the yellow metal to remain underpinned. Iran has warned Israel of “far reaching consequences” should they launch a ground invasion.

Gold is garnering additional lift from rising hopes that the Fed is done raising rates this year. The CME’s FedWatch tool puts the probability of a November rate hike at just 5.2%, while the odds for a December rate hike stand at 32.7%.

While PPI rebounded in September to 2.2% y/y, and CPI held steady at 3.7%, members of the Fed still seem to be encouraged by the progress in the fight against inflation.

“Absent a stark turn in what I see in the data and hear from contacts … I believe that we are at the point where we can hold rates where they are,” said Philadelphia Fed President Patrick Harker. Raphael Bostic of the Atlanta Fed stated last week that he does not believe that the FOMC needs to hike again.

There is still a wide belief that the Fed’s next move is very data-dependent. The present stance has been categorized as a “hawkish hold.” As long as the trajectory for inflation is down, the central bank will likely keep rates as they are.

Monday’s low at $1908.23 now provides a good intervening support level ahead of the 38.2% retracement level of the rally off the $1810.46 low, which comes in at $1886.14.

On the upside, the next tier of resistance is found at $1947.46/$1953.06. A breach of this area would exceed the halfway back point of the entire decline off the $2067.00 high from May, shifting focus to the 61.8% retracement level at $1969.00.

As long as geopolitical tensions remain elevated and nearby supports are intact, setbacks into the range are likely to be viewed as buying opportunities.

While haven flows have gold and the dollar moving generally in tandem at the moment, keep an eye on that relationship for short-term directional cues.

Silver

Silver rose just over 5% last week as outside forces stoked market volatility. Despite the strong rally, additional gains are needed to set a more favorable technical tone.

Spot Silver Daily Chart through 10/16/2023

A rebound above $23.41 would constitute a 50% retracement of the decline from the May high at $26.14. It would also put silver back above its 100- and 200-day moving averages. This would have rather bullish implications.

A retreat below $21.80/75 would return focus to the bearish scenario that has dominated since the downside breakout of the large triangle pattern. Such a move would return focus to the $20.68 low from October 3 and highlight the low for the year at $19.90 once again.

While silver followed gold higher last week, the white metal is probably more concerned about the implications of another war on regional and global growth, as well as prices. If signs of stagflation begin to surface, silver would likely remain defensive.

PGMs

Platinum was comparatively subdued last week, rising a scant 0.5% with activity confined to the previous week’s range. Consolidative trading prevailed on Monday.

Spot Platinum Daily Chart through 10/16/2023

The short-term technical bias remains negative with platinum below the midpoint of the COVID-era range and all the important moving averages.

Palladium remains weak after sliding to fresh 5-year lows two weeks ago. The next support level to watch is defined by a measuring objective and a Fibonacci level at $1088.38/$1085.50.

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.

Clearly, the markets are not supported by weekend developments in Gaza, and with a thin US economic report slate today, the primary focus will likely be on an afternoon speech from the Feds Harker.

While the US intentions to contain the Middle East crisis are laudable, many times those types of efforts prove fruitless...[MORE]

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Spot gold was down 0.9% to $1,915.10 per ounce by 1130 GMT after hitting its highest since Sept. 20. U.S. gold futures was down 0.7% to $1,928.60...[LINK]

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Spot gold was up 0.5% at $1,882.59 per ounce by 1138 GMT, its highest level since Sept. 27. U.S. gold futures were up 0.4% at $1,895.40...[LINK]

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Spot gold was up 0.6% at $1,871.90 per ounce by 1132 GMT, its highest level since Sept. 29. U.S. gold futures rose 0.6% to $1,886.30...[LINK]

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Spot gold climbed to $1,865.19 per ounce, its highest since Sept. 29, earlier in the day and was last down 0.3% at $1,855.10 by 1217 GMT...[LINK]

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Israel pounded the Palestinian enclave of Gaza on Sunday, killing hundreds of people in retaliation for one of the bloodiest attacks in its history when gunmen from Hamas rampaged through Israeli towns on Saturday...[LINK]

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Spot gold was flat at $1,820.60 per ounce by 0940 GMT, but was on track for its second straight week of decline, down 1.5% so far this week, as elevated Treasury yields and a firm dollar dented bullion's appeal...[LINK]

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Spot gold was steady at $1,822.14 per ounce by 1020 GMT. U.S. gold futures gained 0.1% to $1,836.30...[LINK]

However, given the largest month-over-month jump in US job openings since July 2021, the trade is anticipating positive US jobs sector news again today which in turn is expected to produce even higher US treasury yields and even higher US dollar exchange rates.

In fact, Fed dialogue regarding the potential for sharp gains in long-term interest rates suggests the Fed sees ongoing normalization of the yield curve as a sign their tightening policies are working...[MORE]

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Spot gold was steady at $1,822.20 per ounce by 0948 GMT, while U.S. gold futures dropped 0.2% to $1,838.40...[LINK]

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Spot gold was down 0.1% at $1,825.70 per ounce at 1207 GMT, dropping to its lowest since March 9. Bullion was down for a seventh consecutive session...[LINK]

Passage of the continuing resolution over the weekend pushes the government shut-down risk into November, leaving markets to now focus almost exclusively on rising yields, expectations of “higher for longer” rates, and the rallying dollar. All of this adds weight to a gold market that was already on the defensive.

The 10-year yield reached a 16-year high of 4.71% on Monday, helping to lift the dollar index to a 10-month high. This pushed gold to a 6-month low of $1823.59.

For perspective, the yellow metal is now just over 12% off its all-time high of $2075.80 from August 2020 and just below the midpoint of the range that emerged over the past 12 months ($1614.92 – $2067.00).  

Last week’s violation of the August low at $1884.88 leaves the lower bound of the bear channel around $1810 vulnerable to a short-term challenge. The 200-week SMA at $1814.72 further highlights this area. Below that, the 61.8% retracement level of the rally from $1614.92 to $2067.00 comes in at $1787.61.

In order to attract buyers back to the gold market, there needs to be some indication that rates and the dollar have topped out. With Treasury borrowing expected to be $852 bln in Q4, Treasury supply continues to surge, underpinning yields.

As of the end of September, total debt outstanding was $33.2 trillion. The national debt should be just north of $34 trillion by year-end. U.S. GDP for 2023 is forecast to come in around $26 trillion, resulting in a debt/GDP ratio of about 130%.

Whether Congress passes another continuing resolution in November or an actual budget, make no mistake, deficits and debt will continue to rise. The national debt is on track to exceed $50 trillion within 10 years.

With interest rates at multi-year, and in some cases multi-decade highs, financing our debt poses a huge problem. According to Treasury, “As of August 2023 it costs $808 billion to maintain the debt, which is 15% of the total federal spending.”

Debt servicing is an ever-increasing economic headwind and is simply unsustainable. At some point, the Fed may have no other choice than to reinstitute quantitative easing as a means to inflate away the debt. The implications for the dollar would be dire. By extension, the implications for gold would be quite bullish.

Silver

Silver lost 5.8% last week, 9.2% in September, and 2.5% in Q3. The white metal extended lower on Monday, reaching a 6-month low of $21.02 after important support at $22.11 (23-Jun low) gave way.

With more than 61.8% of the rally from $17.56 to $26.15 now retraced, the next significant support level to watch is the low for the year at $19.90 (10-Mar). The 78.6% Fibonacci support comes in at $19.38.

Even better than expected manufacturing PMI and ISM prints for September failed to generate a bid on Monday. Fundamental focus now shifts to auto sales on Tuesday, factory orders on Wednesday, and jobs data on Friday.

The median expectation for September nonfarm payrolls is 165k jobs. The unemployment rate is expected to tick down to 3.7%.

Fed Chairman Powell participated in a roundtable discussion on Monday. While he didn’t comment on policy specifically, he said the central bank was focused on ensuring a healthy economy and strong jobs market by checking inflation.

If taming inflation remains the Fed’s primary goal, Powell reinforced the “higher for longer” theme. The takeaway from the last FOMC meeting was that there was scope for one more rate hike before year-end. However, Fed funds futures continue to reflect a belief that the Fed is already on pause.

Silver needs a robust economy and strong consumer demand for electronics and automobiles to stoke demand. The industrial metals, including silver and copper, don’t seem to have much faith in the Fed’s ability to orchestrate a soft landing.

PGMs

Platinum slid to a new low for the year on Monday at $876.80. A retest of last year’s low at $796.34 must now be considered.

Good auto/truck sales numbers on Tuesday could provide some support. The market is expecting auto sales of 2.3M and light truck sales of 9.7M.

According to Edmunds, the average interest rate on a new car purchase was 7.4%. For a used vehicle it was 11.2%. These are the highest rates in 8 years and are sapping demand, especially for those with less-than-pristine credit.

Additionally, the expanding autoworkers strike threatens to adversely impact supply moving forward. An additional 7,000 workers join the picket line this week amid ongoing contract negotiations.

Palladium remains defensive at the low end of its multi-year range.

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.

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Spot gold was down 0.9% by 0933 GMT to $1,831.81 per ounce, its lowest since March 10. U.S. gold futures slipped 1% to $1,847.50...[LINK]

While gold and silver prices are tracking higher early today, their fortunes remain inversely locked with the dollar and treasuries.

Technicians can look to sell this bounce after it has had a chance to unfold for a couple of sessions. In fact, perhaps gold will finally garner some sustained flight to quality buying if Congress scares the world and raises the US deficit again.

Rating agencies have already warned of additional downgrades which will further the US government's financial crisis...[MORE]

Spot gold rose 0.2% to $1,867.80 per ounce by 1148 GMT. U.S. gold futures gained 0.4% to $1,885.10...[LINK]

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Spot gold was steady at $1,874.29 per ounce by 0939 GMT, hovering near its lowest level since March 13 hit on Wednesday. U.S. gold futures traded at $1,891.30...[LINK]

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Spot gold was down 0.3% at $1,895.13 per ounce by 0932 GMT, its lowest level since Aug. 22. U.S. gold futures eased 0.3% to $1,913.30...[LINK]

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Spot gold edged down 0.2% to $1,912.79 per ounce by 0952 GMT, its lowest since Sept. 15, while U.S. gold futures fell 0.3% to $1,931.50...[LINK]

Last week the Fed held steady on rates, as was widely expected. However, Chairman Powell noted strength in the economy and his desire to see “convincing evidence” that inflation is moderating.

The dot plot suggested that at least one more rate hike could be seen this year. Perhaps more importantly, the dots reinforced the ‘higher for longer’ scenario with the first rate cut now forecast for June 2024.

The 10-year yield moved more convincingly above 4% on Monday, reaching levels not seen since 2007. Higher yields are buoying the greenback. The dollar index extended on Monday to reach 10-month highs.

Higher yields and a higher dollar will continue to pose a considerable headwind for gold. Mounting global growth risks apply additional weight.

It is believed that the Eurozone economy contracted in Q3, even as inflation remains elevated. September CPI is forecast to be 4.5%. While that’s down from 5.2% in August, the inflation rate remains well above target.

Earlier in the month, the ECB hiked rates for a 10^th consecutive meeting, pushing the deposit rate to a record high of 4%. Analysts now believe the ECB is on hold, probably into next summer.

However, the ECB also will want to see some convincing evidence to confirm that inflation has been squelched in the EU. Until that happens, at least one more rate hike can’t be ruled out.

Of course, worries about the Chinese economy persist as well. This could have grim implications for the global economy.

Chinese demand for imports has contracted in nine of the last 10 months. If China slips into recession, there are concerns that demand for commodities will suffer further. While that may help tamp inflation, the demand destruction will be the greater concern in the medium term.

The ongoing expansion of official gold reserves remains a bright spot for the yellow metal. Central banks continue to seek diversification, mainly out of dollars and into gold.

While central bank gold demand slowed in Q2, the record purchases in Q1 led to record H1 demand of 387 tonnes. Turkey was a big seller in April and May before resuming purchases in June.

The World Gold Council believes the Turkish sales were “tactical rather than strategic” amid internal economic and political strife. Interestingly, as the TCMB was selling, demand for bars, coins, and gold jewelry surged in the country as citizens sought to protect their wealth against a devaluing lira.

Taking into consideration estimates of China’s unreported gold reserves, analyst Jan Nieuwenhuijs of Gainesville Coins believes world reserves reached an all-time high of 38,764 tonnes in Q2. If that’s an accurate assessment, it exceeds the previous record of 39,347 tonnes from 1965.

Nieuwenhuijs points out that gold as a percentage of total global reserves currently stands at 17%, while the long-term historical average is 58%. That suggests there remains considerable potential for further central bank gold buying.

If gold were once again to make up the majority of global reserves, one of Jan’s models projects a price in excess of $8,000 over the next 10 years.

Silver

Silver continues to trade in a choppy manner within the confines of a large symmetrical triangle pattern. The white metal rose more than 2% last week, but most of those gains were given back on Monday.

The silver market is facing some of the same headwinds as the gold market. Perhaps most notably, sluggish demand for electronics in China is likely to adversely impact demand for silver.

The Chinese auto sector returned to growth in August, after contracting in June and July. Sales surged 8.5% m/m and 2.2% y/y with electric vehicles such as Teslas increasingly popular. However, the sustainability of these gains is in doubt as China’s real estate crisis threatens to sap consumer demand.

Real estate is the biggest contributor to Chinese GDP, so the crisis has the potential to drag the middle kingdom into recession. Growth risks in the world’s second-largest economy pose considerable risks to the global economy as a whole.

That being said, the global trend toward electrification keeps the long-term supply/demand fundamentals undeniably positive. Therefore, retreats into the range that has emerged this year are still likely to be viewed as buying opportunities.

Initial support is well-defined by the series of lows at $22.30, $22.22, and $22.11. This zone should keep the low for the year at $19.90 (10-Mar) at bay.

Last week’s high at $23.78 is now seen as the trigger for a retest of the upper reaches of the triangle pattern, which comes in around $24.50.

PGMs

Platinum continues to struggle on upticks. The market rose modestly last week, notching a second consecutive higher weekly close. However, renewed selling pressure surfaced on Monday.

While U.S. auto sales were robust in August, global growth concerns continue to percolate below the surface. Rising interest rates also threaten to undermine consumer purchasing power.

Late-summer sales were helped by better supply, but if the expanding UAW strike persists the supply of new cars will tighten.   

Palladium remains defensive at the low end of the multi-year range.

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.

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Spot gold was down 0.1% to $1,923.94 per ounce by 1153 GMT, while U.S. gold futures also fell 0.1% to $1,943.70...[LINK]

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Spot gold was up 0.3% at $1,925.50 per ounce, as of 1152 GMT, following three sessions of losses. U.S. gold futures rose 0.4% to $1,946.20...[LINK]

Spot gold shed 0.4% to $1,922.30 per ounce by 0907 GMT, having briefly touched its highest since Sept. 1 before closing lower in the previous session...[LINK]

However, recently the gold market has been very sensitive to action in the #dollar, and with gold trading lower today with a setback in the dollar, the bull camp has stepped back.

Certainly, the aggressive recovery in the dollar yesterday has rattled some would-be buyers, especially if the US #Fed surprises and decides to hike today...[MORE]

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Spot gold was steady at $1,931.20 per ounce at 1127 GMT, holding below its highest level since Sept. 5 reached on Tuesday. U.S. gold futures eased 0.1% to $1,952.50...[LINK]

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Spot gold was up 0.1% at $1,934.40 per ounce after hitting its highest since Sept. 5 earlier in the session. U.S. gold futures gained 0.2% to $1,957...[LINK]

Gold has garnered some lift from revived inflationary pressures, uncertainty associated with the UAW strike, and the latest risk of a government shutdown.

Annualized CPI rose to 3.7% in August, versus 3.2% in July. PPI jumped to 1.6% y/y from 0.8% in July. Gas prices have reached new highs for the year at a time when ebbing seasonal demand should be tamping the price.

Production cuts by Saudi Arabia and Russia, along with severe flooding in Libya have squeezed supply and pushed crude to 10-month highs, approaching $100 per barrel. The price has risen at the fastest pace since Russia invaded Ukraine last year.

Gold is pressuring the upper reaches of the broad corrective channel. A move back above the 100-day MA at $1945.59, and perhaps more importantly the $1953.06 high from 01-Sep would set a more favorable tone within the range.

Despite resurgent inflation, Fed funds futures indicate that the central bank will hold steady when they announce policy this week. The probability of steady policy is currently at 99%.

Heightened growth risks, seem to be offsetting inflationary pressures. If Fed funds remain at 5.25-5.50%, market participants will turn to the policy statement and the projections for clues as to the Fed’s next move.

Not surprisingly, risks to growth along with stubborn inflation have led to heightened talk about stagflation. During the last bout of stagflation, which occurred in the 1970s, gold was one of the best-performing assets.

It is reasonable to assume that gold will once again serve as a hedge, should stagflation rear its ugly head once again.  With gold less than 7% off its all-time high ($2075.28), the last several months of corrective to consolidative price action seem to present a favorable buying opportunity.

Silver

Silver unsuccessfully challenged important support at $22.22/11 last week before rebounding into the range. With this level intact, downside risk is clearly defined.

Worries about an economic slowdown are further exacerbated by the U.S. autoworker’s strike. While the auto industry will remain a huge source of demand for silver, the strike may sap demand in the short term.

According to the Silver Institute, the auto industry consumes 60 Moz of silver annually. That figure is expected to grow to 90 Moz by 2025, driven largely by the rising demand for electric vehicles (EVs).

Conventional vehicles with internal combustion engines contain 15 to 28 grams of silver. On the other hand, the silver load in EVs can be as high as 50 grams.

Some more upbeat economic data out of China in August suggests the demand picture may be improving. That would bode well for silver and other industrial metals, but many analysts worry that the property slump is likely to persist, leading to an ongoing drag on the economy.

A rebound above $24 would put silver back above all the major moving averages, setting a more positive technical tone within the large developing triangle pattern. Given the long-term supply and demand fundamentals, an eventual upside breakout of this pattern is still preferred.

PGMs

Platinum rebounded nearly 4% last week, leaving a potential inverse head-and-shoulders pattern. A breach of the neckline around $990 is needed to confirm the formation, which would have bullish implications. Upside potential would be $1107.68 based on a measuring objective.

A soft landing in the U.S. along with an end to the autoworkers strike would provide fundamental support to this scenario, as would a sustained recovery in China.

Palladium remains defensive after falling to nearly a 5-year low early in September. The autoworkers’ strike adds additional pressure to an already bleak demand environment.

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.

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Spot gold gained 0.1% to $1,925.50 per ounce by 1223 GMT. U.S. gold futures were up 0.1% at $1,948...[LINK]

Apparently, a portion of the gold and silver trade saw this week's US CPI and PPI readings as inflationary, and in turn traders in those markets raised their expectations for a US Fed hike. It should be noted that the inflationary signs in this week's key monthly US inflation reports were interpreted as dovish because excluding food and energy readings supposedly countervailed the headline gains.

However, we think the odds favor a pause although not as high as the CME Fed watch tool suggested this morning at 97%...[MORE]

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Spot gold was up 0.4% to $1,917.49 per ounce by 1031 GMT, after hitting its lowest since Aug.23 in the previous session. U.S. gold futures gained 0.3% to $1,939...[LINK]

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Spot gold rose 0.1% to $1,908.18 per ounce by 1121 GMT, after touching $1,904.93, its lowest since Aug. 25. U.S. gold futures fell 0.2% to $1,929.60...[LINK]

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Spot gold was steady at $1,912.51 per ounce by 1141 GMT, having touched its lowest level since Aug. 25 at $1,906.50 on Tuesday...[LINK]

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Spot gold was down 0.5% at $1,911.70 per ounce by 1133 GMT, its lowest since Aug. 25. U.S. gold futures dipped 0.6% to $1,934.90...[LINK]

At least recently the major focus of the gold trade has been the direction of the dollar with the direction of treasuries periodically taking control.

Therefore, seeing the dollar correct after extending its uptrend last week some gold and silver bulls are hopeful the dollar will have trouble extending the upward pattern in the coming week...[MORE]

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Spot gold climbed 0.4% to $1,924.60 per ounce by 1002 GMT, while U.S. gold futures rose 0.3% to $1,949.20...[LINK]

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Spot gold was up 0.2% to $1,923.63 per ounce by 1037 GMT, but was set for a 0.8% weekly fall. U.S. gold futures rose 0.3% to $1,947.60...[LINK]

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Spot gold was up 0.1% at $1,918.64 per ounce by 0906 GMT, after hitting a one-week low on Wednesday. U.S. gold futures were little changed at $1,943...[LINK]

Spot gold was flat at $1,926.30 per ounce by 1209 GMT, after hitting its lowest since Aug. 29 earlier in the session. U.S. gold futures were little changed at $1,952.40...[LINK]

Spot gold declined 0.4% to $1,930.33 per ounce by 1126 GMT, eyeing its biggest daily drop since mid-August. U.S. gold futures fell 0.6% to $1,955.80...[LINK]

Spot gold climbed 0.2% to $1,943.80 per ounce by 1008 GMT and was poised for a 1.5% weekly gain after prices touched one-month highs on Wednesday. U.S. gold futures were up 0.2% at $1,970.40...[LINK]

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Spot gold was up 0.1% higher at $1,944.74 per ounce by 1003 GMT, close to its Aug. 2 high of $1,948.79 hit on Wednesday. U.S. gold futures were down 0.1% to $1,971.50...[LINK]

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Spot gold rose 0.1% to $1,939.23 per ounce by 1152 GMT, its highest level since Aug. 7. U.S. gold futures also rose 0.1% to $1,967.40...[LINK]

Spot gold was down 0.3% at $1,914.72 per ounce at 1224 GMT. U.S. gold futures eased 0.2% to $1,942.40...[LINK]

Powell acknowledged that inflation has come down some, but it remains too high. He warned that further rate hikes could be in the offing.

“We are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”– Fed Chairman Jerome Powell

The 10-year Treasury yield reached 4.35% early last week, a level not seen since 2007. While rates moderated in subsequent trading this is likely attributable to profit-taking in advance of the Powell speech rather than any real shift in the perception of policy guidance.

The market certainly seems to be leaning toward “higher for longer” with perhaps some new risk for more rate hikes. However, the hawkish bias remains very much data-dependent.

This week happens to be chock full of U.S. data, including home prices, consumer confidence, GDP, PCE, and nonfarm payrolls. These data points and others in the weeks and months ahead will probably have a greater impact on the rate path than any Fed jawboning.

Interestingly, while the 10-year yield reached a 16-year high, the dollar index is thus far holding below the 104.24 high from May 31. It seems like the dollar should be garnering far more support from the rise in yields. And by extension, gold should be under greater pressure.

The greenback’s share of global reserves has gradually eroded over the past 20 years. News that BRICS membership will more than double as of January 1, 2024, and rumblings of a joint currency conspire to further undermine dollar hegemony.

Speculation that the BRICS currency will at least partially be backed by gold makes for a pretty compelling case to lighten dollar exposure in favor of the yellow metal. This investment theme is already being embraced by a number of central banks.

Silver

Silver snapped back smartly last week, gaining more than 6%. It was the white metal’s second consecutive higher weekly close.

While China has taken a measured approach to stimulus thus far, there seems to be a growing expectation that the Chinese government will deliver more robust measures to prevent a recession in the world’s second-largest economy.

With substantial currency reserves at its disposal, China has the means for large-scale fiscal stimulus. There is historic precedence as well.

However, silver is not out of the woods yet. The range that was established in June and July remains intact at this point. I’m also not seeing the recent gains mirrored in the copper market.

Despite last week’s rally, silver ETFs saw outflows of 6.3 Moz. Holdings are down 3.6% YTD.

Until investors come back to the market, I have to consider the downside still vulnerable. However, the longer-term supply/demand dynamics remain favorable.

PGMs

Platinum rose nearly 4% last week. It was the second consecutive higher weekly close and an additional upside extension (2.6%) was seen on Monday. Most of the declines off  

Here too, while the long-term fundamentals remain broadly favorable, higher U.S. rates and the negative impact on auto demand, as well as persistent worries about the Chinese economy are seen as limiting to the upside.

Palladium continues to consolidate at the low end of the range, still within striking distance of multi-year lows.

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.

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Spot gold was steady at $1,914.59 per ounce by 1200 GMT. U.S. gold futures gained 0.1% to $1,942.10...[LINK]

Spot gold was nearly unchanged at $1,917.17 per ounce by 1149 GMT, having risen about 1.5% so far this week. U.S. gold futures shed 0.1% to $1,945.20...[LINK]

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Spot gold was up 0.3% at $1,919.07 per ounce by 0956 GMT, hitting its highest level since Aug. 10. U.S. gold futures were flat at $1,947.40...[LINK]

Spot gold firmed 0.3% to $1,903.60 an ounce by 1136 GMT, drifting higher for a third straight session. U.S. gold futures rose 0.4% to $1,932.60...[LINK]

Spot gold was up 0.5% to $1,902.50 per ounce by 1009 GMT. U.S. gold futures gained 0.5% to $1,932.30...[LINK]

Spot gold was largely flat at $1,888.60 per ounce by 1125 GMT, while U.S. gold futures added 0.1% to $1,918.10...[LINK]

Spot gold rose 0.3% to $1,894.41 per ounce by 1042 GMT, after touching its lowest in five months on Thursday. U.S. gold futures rose 0.3% to $1,920.80...[LINK]

Spot gold edged up 0.2% to $1,893.30 per ounce by 0945 GMT, as some traders bought on the dips, but hovered near its weakest level since March 15 at $1,888.30...[LINK]

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Bullion traders also positioned for minutes from the Federal Reserve’s July policy meeting for further cues on interest rate strategy, as well as U.S. homebuilding and factory output data later in the day.

Spot gold edged up 0.2%, to $1,905.25 per ounce, by 0946 GMT, while U.S. gold futures were up 0.1%, at 1,936.60...[LINK]

Last week’s U.S. inflation data suggests that the recent cooling trend in prices has at a minimum slowed, and possibly reversed. July CPI ticked up to 3.2% y/y, versus 3.0% in June. PPI rose to 0.8% y/y in July, versus 0.2% in June.

Lingering inflation along with the July nonfarm payrolls miss sparked a modest uptick in expectations for a rate hike before year-end. However, the market is still fairly convinced that the Fed will hold steady at its next meeting in September.

The heightened prospects for tighter monetary policy pushed the 10-year yield back within striking distance of the October high at 4.337%. The dollar index followed yields higher to set a 5-week high on Monday, adding additional weight to the yellow metal.

Interest rates have already risen dramatically since the Fed’s tightening cycle began back in March of 2022. The Fed funds rate has gone from 0% to 5.25-5.5%. That’s a significant rise in the cost of carrying debt at a time when the country’s and individual debt loads are on the rise.

The national debt stood at $31.5 trillion as of Q1-2023. Estimates now put the debt load closer to $32.7 trillion. If that number is accurate, nearly $10 trillion has been added to the national debt in just the last several years alone since the beginning of the COVID crisis. That’s a surge of more than 40%!

Each citizen’s share of that debt is around $97,550. If you divide it among taxpayers that share jumps to $253,686.

Meanwhile, the credit card debt of American citizens surpassed an inauspicious milestone in Q2, exceeding $1 trillion for the first time ever. Overall household debt rose to $17.06 trillion.

That’s a monumental debt load no matter how you slice it. Rising interest rates will only make it more difficult for America and Americans to extract themselves from this burdensome situation, especially with student loan payments slated to resume for many in October.

While the Fed has stated its goal is to bring inflation back to the 2% level, there may come a point when a higher rate of inflation becomes desirable to help inflate away the debt. In that situation, the ones that really pay are savers that are capturing a yield lower than the rate of inflation.

One of the best ways to preserve one’s wealth in an inflationary environment is to buy physical gold. In 2021 inflation began to surge due to government spending (see the national debt graph above) and pandemic-related supply chain disruptions.

CPI jumped from 1.7% in February of 2021 to 2.6% in March. At the time gold was trading around $1734. By the time CPI topped out at 9.1% in July of 2022 gold had challenged its record high above $2070. Only drastic action by the Fed prevented new record highs.

During the previous major inflationary period during the 1970s, gold rose from around $35 at the start of the decade to $512 in December of 1979. In January 1980 the yellow metal reached the unheard-of level of $850, a 10-year rise of 2,329%.

Here too only drastic action by legendary Fed chairman Paul Volcker finally tamped inflation and gold. It took a Fed funds rate of 20%.

Setbacks offer buying opportunities for wealth-preservation-minded investors.

Silver

Silver tumbled nearly 4% last week, notching a fourth consecutive lower weekly close. Follow-through losses on Monday saw a 6-week low set at $22.37.

The white metal violated the 50-week, 100-week, and 200-week moving averages on Monday. While the latter was only penetrated slightly and silver firmed into the close, the downside remains vulnerable.

A true challenge of the June low at $22.11 seems likely. If this level gives way, potential would be to the $21.25 Fibonacci level.

Metals like silver that derive the majority of their demand from industry need strong growth from major economies to support prices. Lately, data from China, the world’s second-largest economy, have been rather bleak and the government seems to be reluctant to offer full-fledged stimulus.

PGMs

The PGMs are also being weighed by China’s economic woes.

Platinum notched a fourth consecutive lower weekly close last week, reaching a 9-month low at $887.39. The market remains defensive to start the new week.

Palladium continues to consolidate just above multi-year lows. The downside may be at least temporarily limited by the record net short positioning in the market, but it’s going to be difficult to scare up any buyers given the Chinese growth risks and deflationary pressures.

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.

Spot gold was little changed at $1,913.50 per ounce by 1027 GMT, hitting its lowest level since July 7. U.S. gold futures were mostly flat at $1,946.00...[LINK]

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Spot gold rose 0.3% to $1,917.73 per ounce by 1037 GMT, after touching its lowest level since July 7 earlier. U.S. gold futures edged up 0.1% to $1,950.20...[LINK]

Spot gold rose 0.4% to $1,921.32 per ounce by 1125 GMT, bouncing up slightly after touching its lowest level since July 10 on Wednesday. U.S. gold futures edged up 0.2% to $1,954.60...[LINK]

In fact, with the world largely accepting the likelihood of Chinese deflation and the Chinese economy capable of exporting deflation, (overnight Chinese producer prices declined by 4.4% following a 5.4% decline in the previous month) should leave physical commodities out of favor.

Not surprisingly gold ETF holdings fell again yesterday for the 12th straight session while silver ETF holdings dropped for a 5th straight session...[MORE]

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Spot gold was up 0.1% at $1,925.85 per ounce by 1145 GMT, having dropped to its lowest since July 10 at $1,922 on Tuesday. U.S. gold futures remained mostly unchanged at $1,959.80...[LINK]

Other minimally bearish developments include Turkey placing a 20% levy on some forms of gold imports and news that gold ETF holdings yesterday fell for the 11th straight day!

Much weaker than expected Chinese import and export data undermines physical and investment demand hope for gold and silver which will also be facing slightly negative spillover from strength in the US dollar...[MORE]

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Spot gold was down 0.4% to $1,928.61 per ounce by 1200 GMT after hitting its lowest since July 11. U.S. gold futures fell 0.4% to $1,963.00...[LINK]

July CPI comes on Thursday and median expectations are for a 0.2% monthly increase. PPI is out on Friday and the market is expecting a 0.2% increase here as well.

While decent U.S. economic data suggests there is conceivably room for further monetary tightening, Fed funds futures show an 85% probability that the FOMC will hold steady when they next meet in September. That conviction is not as strong into year-end.

There is heightened optimism in recent weeks that the Fed is going to successfully negotiate a soft landing. It would be quite a feat to avoid recession on the heels of 11 consecutive interest rate hikes over the past 16 months.

The DJIA has rebounded to 16-month highs in recent weeks and is a mere 4% off its all-time high as investors are lured back into stocks. This appetite for risk has weighed on gold with Friday marking the tenth consecutive day of outflows from ETFs, leaving holdings down 2.86 Moz year-to-date.

Is there another shoe to drop in the form of a second wave of inflation and/or a rebound in growth risks? Time will tell, but energy prices are already back on the rise. Crude oil has risen nearly 20% in the past 6-weeks.

Demand from China and India remains subdued, with the former still struggling to recover from COVID-related lockdowns and the latter facing record-high prices against the rupee.

The Indian monsoon season began late this year, but crops have been damaged by more recent torrential rains. A ban on some rice exports from India, meant to ensure domestic availability, is likely to contribute to global food-price inflation while simultaneously putting further pressure on gold demand.

Friday’s price action resulted in a key reversal (lower low, close above the previous session’s high). That’s generally a pretty favorable technical chart pattern, but upside follow-through failed to materialize on Monday. Nonetheless, Friday’s low at 1924.78 now provides a good intervening barrier ahead of the more important $1893.07 support level (29-Jun low).

A breach of initial resistance at $1947 would bode well for renewed tests above the 100-day SMA at $1968.14. I see the July high at $1987.53 as the trigger for a run back above $2000 and an eventual challenge of the all-time high at $2075.28.

However, this bullish scenario threatens to get derailed by weakness in the silver market.

Silver

Silver remains on the defensive weighed by ongoing concerns about the Chinese economy. The white metal notched a third consecutive lower weekly close last week and extended 2% lower on Monday.

An ascendant China and its growing middle class have been at the core of every long-term bullish commodity scenario. However, harsh COVID restrictions that didn’t get rolled back until late-2022 sapped investment and consumer spending. Each has been disturbingly slow to recover.

The devastating supply chain issues that were revealed during the pandemic put pressure on international companies to repatriate some key manufacturing, or at least shorten and diversify supply lines. This means China could be facing disinvestment for some time to come.

Stimulus measures have thus far failed to shake free hoarded cash from Chinese businesses and consumers. Both are understandably worried about the level of authoritarian control exerted by Beijing over the past several years and fear that it could easily happen again.

Seems like a good reason to buy some gold.

Heightened political tensions between China and the U.S. further exacerbate the situation.

More than 61.8% of the June/July rally in silver has already been retraced and the 200-day SMA at $23.16 is under pressure. A convincing penetration of this level would shift focus to the 78.6% retracement level at $22.79. Beyond that, the June 23 low at $22.11 would be back in play.

A rebound above $24 is needed to ease short-term pressure on the downside. Such a move would suggest potential back to the July 20 high at $25.27.

PGMs

Platinum closed 1.6% lower last week. It was the third consecutive lower weekly close and the weakness extended into Monday’s session.

The PGMs are also being weighed by the economic situation in China, which is adversely impacting car and truck demand. Heavy monsoon rains and flooding in India have not been good for car and truck demand either.

Palladium is coiling near multi-year lows, but with the market already quite short, a rebound may be needed to attract renewed selling interest.

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.

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Spot gold was down 0.4% at $1,934.89 per ounce by 1122 GMT, having slid to its lowest since July 11 on Friday before settling 0.4% higher. U.S. gold futures eased 0.3% to $1,969.70...[LINK]

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Spot gold was down 0.1% at $1,932.09 per ounce by 1046 GMT and U.S. gold futures were trading 0.1% lower at $1,967.20...[LINK]

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Spot gold was nearly flat at $1,934.29 per ounce by 1204 GMT, having hit its lowest since July 11. U.S. gold futures fell 0.3% to $1,969.80...[LINK]

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Spot gold was up 0.5% to $1,952.79 per ounce at 1133 GMT, while U.S. gold futures rose 0.6% to $1,989.90...[LINK]

Spot gold eased 0.5% to $1,954.49 per ounce by 1136 GMT, while U.S. gold futures dropped 0.9% to $1,953.70...[LINK]

Last week the Fed hiked rates by 25 bps, and it was widely accepted it would be the last one for some time. However, on Thursday Q2 advance GDP came in at 2.4%, above expectations of 1.9%. In addition, durable goods orders surged 4.7% in June, well above market expectations of 1.8%.

These robust data are evidence that the U.S. economy continues to hum along at a respectable pace, despite the marked rise in interest rates over the past 16 months. More hawkish members of the Fed could now conceivably argue there is room for another rate hike. Fed funds futures are currently showing a 20% probability for a 25-bps hike in September.

While the Fed’s favored measure of inflation cooled to 4.1% in June, versus 4.6% in May, there are lingering worries in the market that a second wave of inflation could be in the offing. The national average for a gallon of regular gas jumped 13¢ last week reaching an 8-month high.

I’m often asked why gold didn’t fare better during this inflationary period. The answer lies in the Fed’s aggressive response in raising the Fed funds rate by 525 bps in just over a 1-year period. During that time, gold only corrected 22%, from $2070.63 (just shy of the all-time high) to $1614.92.

Most of those corrective losses have already been retraced, so I would argue that gold held up remarkably well in the face of the most aggressive tightening campaigns in recent history.

The long-term trend remains bullish with the market trading less than $110 off the all-time high. Setbacks into the range are likely to be viewed as buying opportunities.

Silver

Silver closed down more than 1% last week, weighed by persistent concerns that the health of the Chinese economy, and an uptick in the probability of another Fed rate hike in September.

A firmer tone emerged over the past two sessions on the heels of strong U.S. and Japanese data. While the Chinese economy continues to show signs of weakness, the government announced supports for light industry on Friday and then measures to boost consumer spending on Monday.

Such stimulus offers support for both precious and industrial metals. If the Chinese economy continues to struggle, additional (and larger) stimulus would be likely, providing underpinning for the metals.

I like that the 20-day SMA successfully contained the downside last week. Renewed tests above $25 would bode well for a retest of the high from July 20 at $25.27. Penetration of the latter would clear the way for a challenge of the highs for the year at $26.09/14.

PGMs

Platinum fell 2.8% last week, notching a second consecutive lower weekly close. A fresh 2-week low was set on Monday before the market snapped back to close nearly 2% higher on the day.

The outside day with a higher close bodes well for upside follow-through on Tuesday. Strong economic data from the U.S. and Japan, along with Chinese stimulus are supportive factors.

The longer-term supply and demand dynamics remain broadly supportive. Dips into the range are likely to be viewed as buying opportunities.

Palladium has been corrective to consolidative over the past several weeks. While a short-term bottom may be in place at $1185.18, the trend remains bearish.

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.

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Spot gold was unchanged at $1,959.50 per ounce by 1132 GMT after slipping as much as 0.5% earlier. U.S. gold futures ticked 0.1% lower to $1,959.30...[LINK]

Spot gold rose 0.6% to $1,956.69 per ounce by 1133 GMT, up from its lowest since July 12. U.S. gold futures gained 0.5% to $1,955.70...[LINK]

Spot gold rose 0.3% to $1,977.19 per ounce by 1204 GMT, after earlier hitting its highest since July 20. U.S. gold futures were up 0.4% to $1,977.70...[LINK]

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Spot gold rose 0.4% to $1,972.22 per ounce by 1145 GMT, while U.S. gold futures gained 0.5% to $1,973.60...[LINK]

Spot gold was up 0.1% to $1,956.77 per ounce by 1148 GMT, while U.S. gold futures edged down 0.2% to $1,958.20...[LINK]

In the eyes of the market, a 25-bps rate hike is a foregone conclusion. Fed funds futures reflect a probability of 98.3%. That is largely the result of the ongoing tempering of U.S. inflation data.

June CPI data showed a full-point drop in annualized consumer inflation to 3.0% from 4.0% in May. June PPI fell to 0.1% y/y, versus a downward revised 0.9% y/y in May.

The market is widely anticipating that Fed will pause after this week’s hike. The target rate is then most likely to remain at 5.25% – 5.5% into Q1-2024. However, the policy statement will undoubtedly state that the rate path will be data-dependent.

What comes next though? Arguably growth risks remain in light of the rather dramatic series of rate hikes over the past 16 months. On the other hand, Vincent Deluard of StoneX believes we “should brace for second and third inflationary waves, as was the case in the 50s and 70s.”

The yellow metal set a 9-week high last week shy of the $2000 level, buoyed by a weaker dollar. The dollar index tumbled to a 15-month low on the belief that the Fed is on the verge of pausing, while other major central banks will continue their tightening campaigns.

While gold and the dollar have adopted corrective tones in more recent sessions, I see this as primarily associated with position squaring ahead of the Fed decision. If the policy statement is in line with expectations ­– without an over-the-top emphasis on data dependency – the dominant trends should resume.

Silver

Silver closed down 1.3% last week. It was the first lower weekly close in four.

A key reversal did form on Thursday last week, so it was not surprising to see downside follow-through late last week and into Monday. Here too, we suspect some profit-taking ahead of the FOMC meeting.

Heightened growth risks may be putting some pressure on the more industrial metals as well. Preliminary US manufacturing PMI for July came in better than expected at 49, but the indicator appears on track for a third consecutive month of contraction.

Meanwhile, services PMI slumped to 52.4, well below expectations of 54. It was the sixth straight month of expansion, but the slowest pace since March.

According to the report: “The overall rate of output growth, measured across manufacturing and services, is consistent with GDP expanding at an annualized quarterly rate of approximately 1.5% at the start of the third quarter. That’s down from a 2% pace signaled by the survey in the second quarter.”

While economic growth slowed in July, there are plenty clinging to the notion of a soft landing. Let’s just say that my confidence in the Fed’s ability to orchestrate such an outcome is not particularly high.

I’m also somewhat concerned about the ongoing lack of investor interest, despite the (near-perfect) 78.6% retracement of the May-June decline. ETF outflows last week totaled 6.4Moz, leaving net holdings down more than 2% YTD.

The longer-term supply/demand fundamentals remain broadly favorable, and setbacks are likely to be viewed as buying opportunities.

PGMs

Platinum fell 1.1% last week but not before establishing a 5-week high at $998.43. The inability of the market to regain $1000 leaves the upside limited while the market awaits the Fed’s decision.

Consolidative range trading persists. A rebound above $1000 would set a more favorable tone within the $564.70/$1339.35 range.

Palladium remains defensive near 4½-year lows.

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.

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Spot gold was up 0.2% to $1,964.63 per ounce at 1045 GMT. U.S. gold futures for August delivery were unchanged at $1,966.50...[LINK]

Spot gold slipped 0.4% to $1,962.69 per ounce by 1119 GMT, but was set for a 0.4% rise this week. U.S. gold futures dropped 0.3% to $1,965...[LINK]

Spot gold gained 0.2% to $1,980.59 per ounce by 1058 GMT, close to its highest since May 17 at $1,987.39. U.S. gold futures also rose 0.2% to $1,984.10 per ounce...[LINK]

Spot gold eased 0.2% at $1,973.69 per ounce by 1200 GMT, slightly pressured as the U.S. dollar bounced back from 15-month lows. U.S. gold futures also fell 0.2% to $1,977.30 per ounce...[LINK]

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Spot gold rose 0.4% to $1,962.19 per ounce by 1144 GMT. U.S. gold futures advanced 0.5% to $1,965.90...[LINK]

One more 25 bps rate hike is widely anticipated when the FOMC meets next week. That would take the Fed funds rate to 5.25-5.50%. After that, Fed funds futures favor the central bank being on hold through the end of the year.

A report that the BRICS countries (Brazil, Russia, India, China, South Africa) planned to introduce a gold-backed currency at their August summit in South Africa added additional weight to the greenback and lift for the yellow metal. Such a currency would be a direct competitor to the dollar, perhaps hastening the de-dollarization of the global economy that is already underway.

The initial report came from state-run Russia Today (RT), so there are some questions as to its veracity. However, there has been talk of a BRICS currency for years.

 While some of the BRICS nations have been aggressively accumulating gold in recent decades, there are some doubts as to whether they have enough to meaningfully back a reserve currency. I’d say that depends to a large degree on actual gold reserves as compared to reported reserves, as well as the underlying price of gold.

Official Gold Reserves of BRICS Nations (Tonnes) through Q1 2023

*Data courtesy of World Gold Council

That’s a total of 5,444.53 tonnes of gold. That’s still well below reported U.S. reserves of 8,144.46 tonnes, not that gold provides any backing for the dollar. But it is widely believed that Chinese reserves are significantly underreported.

Some respected gold analysts think Chinese reserves may be as high as 30,000 tonnes! “The PRC probably has as much as 30,000 tonnes hidden in various accounts, but not declared as official reserves,” said Alasdair McLeod Head of Research at GoldMoney.

Ross Norman has quipped, “Put an additional zero on the end” of reported Chinese gold reserves and it will get you closer to reality.

I suspect the gold holdings of the Russian Federation are underreported as well. Meanwhile, the Indian government continues to work relentlessly to monetize the estimated 25,000 tonnes of gold held by Indian households, despite past failures to do so.

The expansion of U.S. trade sanctions against Russia, Venezuela, and others have sparked interest in a BRICS currency from all corners of the globe. Algeria, Argentina, Bahrain, Bangladesh, Egypt, Ethiopia, Indonesia, Iran, Audi Arabia, and the UAE have recently applied for membership in BRICS. Nearly two dozen more have expressed an interest in joining.

There’s a lot of gold potentially in play, beyond just reported reserves of the current BRICS members.

Developing a stable monetary union among such a diverse group is a daunting task. At a minimum, syncing monetary, economic, and fiscal policies will be a long and undoubtedly bumpy road.

However, if such a currency is indeed to be backed by gold, it seems likely that BRICS members, and potential future members, would be well served by accumulating as much gold as they possibly can.

Such a strategy does not bode well for fiat currencies, including those of BRICS members. However, the dollar may be the most vulnerable as members and potential members seek to diversify their reserve holdings out of greenbacks.

Gold is presently trading less than 6% off its all-time high against the dollar. It’s less than 10% off the all-time highs against the euro and pound, and about 12% below its record high against the Swiss franc.

Diversifying your own reserve holdings out of dollars seems a prudent strategy. The recent corrective consolidation phase in gold suggests the dominant uptrend may not be over yet. In addition, the recent plunge in premiums makes buying physical metals even more appealing.

A rebound above $1983.50 would bode well for renewed tests above $2000. Once the latter is regained, I’d be feeling pretty confident about new record highs.

Silver

Silver surged 8% last week to set a 9-week high just below $25. It was the third consecutive higher weekly close.

Weaker-than-expected inflation data and a decent payrolls number for June build a strong case for a Fed pause after the July FOMC meeting. That suggests there is a chance the U.S. will avoid recession, which bodes well for commodities.

Economist Nomi Prins believes the upcoming BRICS summit and the prospect of a serious challenge to dollar hegemony is a threat to the greenback and to the U.S. treasury market. Not a good scenario given the massive and growing size of our national debt. This may prompt hedge funds to sell dollars and buy gold and silver.

More than 61.8% of the April to June decline has already been retraced and silver is back above all of the critical moving averages. A trade above $25 would clear the way for a retest of the $26.08/14 highs from April and May.

An eventual penetration of the latter would put silver back on track for a challenge of the important $30 zone.

PGMs

The weaker dollar, the anticipated end of Fed tightening, and the prospects for a soft landing have helped buoy platinum, resulting in a gain of 7% last week. A short-term rise above $1000 would favor additional retracement toward resistance at $1046/$1049.

Palladium remains defensive near 4½-year lows, weighed by dimmed auto-sector demand prospects as the desire for EVs grows and platinum for palladium substitution in autocats persists.

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.

Spot gold was little changed at $1,954.13 per ounce by 0924 GMT. U.S. gold futures fell 0.3% to $1,958.10...[LINK]

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Spot gold was little changed at $1,923.69 per ounce by 1144 GMT. U.S. gold futures were down 0.2% to $1,929.10...[LINK]

Spot gold was up 0.3% to $1,915.79 per ounce by 0902 GMT, with analysts attributing the small uptick to bargain hunting. U.S. gold futures rose 0.3% to $1,921.80...[LINK]

In retrospect, the release of the Fed meeting minutes yesterday afternoon revealed some Fed members were in favor of a 25-basis point rate hike last month despite the Fed's ultimate decision to leave rates unchanged.

Given numerous indications from the Fed, they are data dependent, US jobs-related data over the coming 2 sessions will be quite important and likely to set the trend in gold...[MORE]

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Spot gold rose by 0.4% to $1,924.62 per ounce by 1134 GMT, while U.S. gold futures gained 0.2% to $1,931.20...[LINK]

Spot gold little changed at $1,927.39 per ounce by 1104 GMT, trading in a $8 range, while U.S. gold futures were up 0.3% to $1,934.70...[LINK]

Spot gold was down 0.3% at $1,913.88 per ounce by 1222 GMT, while U.S. gold futures fell 0.4% to $1,921.80. Bullion lost 2.5% in the April to June quarter...[LINK]

Spot gold fell 0.2% to $1,904.94 per ounce by 1203 GMT, down 3.2% for the quarter ending June 30...[LINK]

Spot gold edged up 0.2% to $1,910.34 per ounce by 12:05 GMT, after hitting a fresh low since mid-March. U.S. gold futures fell 0.2% to $1,918.40...[LINK]

Spot gold fell 0.4% to $1,906.49 per ounce by 1148 GMT, hitting its lowest since mid-March earlier in the session. U.S. gold futures shed 0.4% to $1,915.50...[LINK]

While gold, silver, platinum, and palladium appeared to see flight to quality lift yesterday from the uncertainty of the military turmoil in Russia, that potential has dissipated quickly.

Certainly, if the coup attempt had gained traction and not ended so quickly, there might have been destabilization in Russia...[MORE]

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Spot gold held its ground at $1,923.09 per ounce by 1200 GMT while U.S. gold futures edged down 0.1% to $1,932.90...[LINK]

Fed funds futures are currently showing that probability at 74.4%. That’s up from 52.2% a month ago and a very low probability right after the May FOMC meeting. While inflation has continued to moderate, it remains well above the Fed’s 2% target.

Meanwhile, the labor market and economic growth remain at least marginally resilient. The FOMC indicated in May that policy moves would be data-dependent moving forward.

Median expectations for Final Q1 GDP are +1.4%, although some trusted sources are predicting +2.0%. Initial forecasts for Q2 GDP are +1.3%.

This does indeed give the Fed room for at least one, and maybe two 25 bps hikes. If it’s two, that will take Fed funds to 5.5%-5.75%, the highest rate since January 2001.

On the other hand, global growth prospects have dimmed in recent weeks, largely due to concerns about China’s tepid recovery. While rising global growth risks do not bode well for the industrial metals, they may spark some haven interest in gold.

Additional safe haven interest is being supplied by political tensions in Russia. On June 23^rd, the Russian paramilitary organization Wagner Group initiated what has been called a “rebellion” against the government and began advancing toward Moscow. A negotiated deal reportedly halted that march, but plenty of uncertainty remains.

Gold closed slightly higher on Monday, but scope remains for further tests of the downside. The next tier of support to watch is $1904.89/$1900.00.

A rebound above $1940.00 would ease short-term pressure on the downside and shift focus to more important resistance at $1983.51.

With the dollar still looking vulnerable, despite favorable interest rate differentials, I believe the underlying uptrend ultimately prevails and these setbacks are likely to be viewed as buying opportunities.

Silver

Silver has been hit harder by mounting global growth risks. The white metal dropped 7.3% last week. It was the second consecutive lower weekly close.

Investors have been slow to accept the realities of the supply/demand dynamics in the physical market. Demand reached a record 1.24 billion ounces in 2022, resulting in a massive 237.7 Moz supply shortfall.  

This came on the heels of a 51.1 Moz deficit in 2021. The Silver Institute is predicting another deficit this year of approximately 142.1 Moz.

While the Silver Institute sees industrial demand growing by 4% this year, they predict overall demand to contract by 6% due to weaker expectations for the silverware, jewelry, and bullion sectors.

Growth risks will continue to periodically spook investors in the paper market resulting in price retreats. However, such setbacks are likely to be viewed as buying opportunities.

Many believe that the industrial sector is largely recession-proof at this point with sweeping electrification initiatives being supported by government subsidies. I’m inclined to concur and would therefore consider this year’s low just below $20 to be well protected.

PGMs

Platinum remains on the defensive, dropping nearly 7% last week. It was the second consecutive lower weekly close.

Substitution for palladium has been helping to underpin the platinum market as the auto sector recovers post-COVID. While that is still happening, accelerating the adoption of electric vehicles may be becoming the more dominant storyline.

EVs accounted for 14% of global new car sales in 2022. That figure is expected to rise to 18% in 2023. Some are projecting that EVs will make up 35% of new car sales by 2030.

That bodes well for silver and copper, but not so much for the PGMs. Platinum has probed back below the midpoint of the COVID-era range, leaving this year’s low at $902.16 vulnerable to a retest.

Palladium slid to a 4½-year low of $1262.22 last week, keeping focus squarely on the downside.

Palladium is facing the double-whammy of substitution for still significantly cheaper platinum and the rising market share of EVs.

The next support to watch is $1243.20 based on a Fibonacci objective.

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.

However, at the end of last week gold at times showed signs of flight to quality buying interest off increased global economic uncertainty and that could extend into the new trading week.

In fact, global growth was revised downward by two separate entities while a senior Chinese economic official has indicated China must act quickly to support its recovery...[MORE]

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Spot gold rose 0.6% to $1,932.19 per ounce by 1116 GMT, while gold futures were up 0.7% to $1,942.30...[LINK]

Spot gold was up 0.3% at $1,919.06 per ounce by 1130 GMT, yet stayed close to a three-month low hit earlier in the session. Prices are down 1.9% for the week...[LINK]

Clearly, reiterated hawkish commentary from the US Federal Reserve Chairman to a US congressional committee prompted the initial washout in gold prices yesterday.

We should note that the Fed chairman yesterday indicated the Fed was sticking with its 2% inflation target which probably increases the likelihood of more than two 25 basis point rate hikes this year...[MORE]

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Spot gold was down 0.3% to $1,927.38 per ounce by 1040 GMT, a day after having hitting its lowest since March 17. U.S. gold futures fell 0.4% to $1,937.60...[LINK]

Spot gold fell 0.2% to $1,932.86 per ounce, trading in an $8 range as of 0915 GMT. U.S. gold futures were also down 0.2% to $1,944.20...[LINK]

From a fundamental perspective, the bear camp also has an edge with the #dollar initially making a 3-day high and extending the recovery off last week's spike-down move.

Even investors have turned cool toward gold with Friday presenting a 15th straight day of outflows from gold ETF holdings...[MORE]

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Spot gold rose 0.2% to $1,953.99 per ounce by 12:25 GMT. U.S. gold futures fell 0.3% to $1,966.00...[LINK]

Spot gold was down 0.4% to $1,948.89 per ounce by 8:11 a.m. EDT (1211 GMT). U.S. gold futures fell 0.5% to $1,960.90. Trading is expected to be slow with U.S. markets closed for the Juneteenth holiday...[LINK]

However, gold appears short-term overbought from the surprise bounce yesterday which was largely attributable to the sharp decline in the dollar and because of softer-than-expected US jobs data.

Even though surveys earlier in the week showed only a 1 in 3 chance the US Fed would hike rates next week, yesterday's 18-month high in US initial claims provided gold with a significant wave of buying which reached $30 per ounce from the low...[MORE]

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Spot gold fell 0.3% to $1,962.34 per ounce by 5:52 a.m. ET (0952 GMT), but headed for a 0.8% weekly climb, having jumped about 1.5% after a surge in U.S. weekly jobless claims...[LINK]

However, the developing pattern on the dollar charts with 4 consecutive lower highs and 3 consecutive lower lows should provide hope for gold and silver bulls ahead especially if today's US jobs-related data points to a soft economy.

Unfortunately for the bull camp investment signals for gold remain bearish with ETF holdings yesterday declining 30,840 ounces and, in the process, declining for the 7th straight session...[MORE]

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Spot gold rose 0.3% to $1,945.69 per ounce by 7:26 a.m. (1126 GMT) after shedding 1% in the previous session. U.S. gold futures rose 0.1% to $1,959.90...[LINK]

The bear camp should also be emboldened by 6 straight outflows from gold and silver ETF holdings. In fact, silver ETF holdings flipped from a net inflow for the year to a net outflow for the year with net sales reaching 3.08 million ounces.

In a minimally supportive demand development (more psychological than physical) Chinese gold reserves at the end of May were 67.27 million ounces compared to 66.76 million ounces at the end of April...[MORE]

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Spot gold was little changed at $1,962.47 per ounce by 1114 GMT, holding in a $13 range. U.S. gold futures fell 0.1% to $1,979.50...[LINK]

Spot Gold Daily Chart through 6/5/2023

U.S. nonfarm payrolls for May came in at a solid +339k, well above market expectations of +193k, versus a positively revised +294k in April. While the unemployment rate rose to 3.7%, strength in the payrolls numbers diminishes the likelihood that a recession is impending.

This also seems to provide some additional leeway for the Fed to further tamp inflation with another rate hike this month, although that’s not really being reflected in Fed funds futures yet. The CME’s FedWatch tool puts the probability of a 25-bps rate hike at 24.1% as of Monday.

The resolution of the latest debt-ceiling standoff has taken some of the haven bid out of gold. While default has been averted, there doesn’t seem to be any palpable sense of relief.

The debt ceiling has been suspended until January 2025, allowing Treasury to borrow as much as it wants until the debt ceiling is reinstated. The CBO projects total debt held by the public to grow to $27.4 trillion by the end of 2024 and exceed 100% of GDP. Gross debt is expected to be north of $34 trillion.

Federal Debt Held by the Public, 1900 to 2053

By the end of 2033, total debt held by the public is projected to rise to $46.4 trillion, and 118.2% of GDP. Gross debt at the end of 2033 will be approaching $52 trillion.

Those numbers and that chart – especially the trajectory – are reasons for considerable concern. The debt and the servicing costs are an ever-growing millstone around the neck of economic growth potential.

While this is certainly a grim reality for the U.S., the explosion of debt is a global phenomenon.

A recent report by the consultancy group McKinsey found that since 2000, “Globally, for every $1.00 of net investment, $1.90 of additional debt was created.” This was largely due to rising debt levels and quantitative easing (money printing). During 2020 and 2021, “The creation of new debt accelerated to $3.40 for each $1.00 in net investment.”

That’s pretty staggering. Not surprisingly, investors are wondering where they can turn to safeguard their wealth. A recent Bloomberg survey showed that 52% of professional investors and 46% of retail investors picked gold as their top safety choice. Treasuries were a distant second at 14% and 15% respectively.

According to a Gallup poll gold has vaulted into second place for the best long-term investment, behind real estate. According to the poll, gold is now comfortably favored above stocks/mutual funds, Savings accounts/CDs, and bonds.

It’s worth recalling that the world’s central banks have been buying gold voraciously. Central Bank gold buying reached a record 1,078 tonnes in 2022. This year is off to a strong start as well, with Q1 demand hitting a record 228 tonnes, 34% higher than the previous Q1 record set in 2013.

While much has been said in recent weeks about gold weakness stemming from a stronger dollar, keep in mind that the yellow metal is only about $100 (less than 6%) off its all-time high of $2075.28. Savvy investors will likely view short-term setbacks as buying opportunities.

Silver

Silver ended May with a loss of 6%. It was the first lower monthly close in three, as uncertainty over the debt ceiling and growth risks worried investors.

Spot Silver Daily Chart through 6/5/2023

Resolution of the debt ceiling crisis – or perhaps more accurately forestalling of the real crisis – along with optimistic economic data may help put a floor under silver. Supply and demand fundamentals remain broadly supportive, but investors remain reticent.

Silver ETF saw outflows of 2.5 Moz last week. Holdings declined by 838 koz on Friday alone, even after the impressive NFP beat.

Additional retracement of the recent losses is needed to re-instill a measure of confidence in the scenario that calls for an eventual retest of the $30 zone. A rise back above $24.50 might spark some interest among those investors.

What those investors should really be looking at are the realities of incredibly strong demand in just about every sector of the physical silver market. At the same time, the market is in deficit and is projected to remain in deficit for the next five years.

That bodes well for the longer-term outlook which should carry silver to new record highs. It’s a pretty compelling story for investors, but they just aren’t paying attention at this point.

PGMs

Platinum is maintaining a corrective stance, although Monday’s rebound offers some encouragement. The industrial metals didn’t like the strong nonfarm payrolls number on Friday as it heightened the possibility of further Fed rate hikes.

Spot Platinum Daily Chart through 6/5/2023

While total vehicle sales dipped in May to 15.6M from 16.6M in April, the general trend seems to suggest the potential for a return to the pre-pandemic level of around 17.5M units.

I remain cautiously bullish on platinum. If the U.S. can avert a recession, as suggested by persistently strong incoming data, scope is seen for a near-term retest of $1200.

Palladium continues to bounce along the bottom, within striking distance of the 4-year low at $1329.18.

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.

Spot gold fell 0.1% to $1,960.70 per ounce by 0938 GMT, while U.S. gold futures rose 0.2% to $1,977.20...[LINK]

Spot gold fell 0.4% to $1,939.44 per ounce by 1130 GMT, close to its lowest level since May 30. U.S. gold futures fell 0.7% to $1,956.40 per ounce...[LINK]

Spot gold was up 0.1% to $1,980.49 per ounce at 1005 GMT. U.S. gold futures were up 0.1% to $1,997.40...[LINK]

Spot gold slipped 0.11 % to $1,960.09 per ounce by 1014 GMT. It fell 1.4% over the month of May. U.S. gold futures were down 0.2% on the day at $1,977.30...[LINK]

Surprisingly, silver has avoided the pressure seen in the early gold trade thereby signaling its continued focus on physical commodity fundamentals instead of financial/currency-related factors.

However, gold and silver should see minimal support from a continued slide in US interest rates today...[MORE]

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Spot gold was largely unchanged at $1,958.69 per ounce by 1123 GMT. It has lost nearly 1.6% so far this month and $120 from its near-record highs earlier in May...[LINK]

Spot gold rose 0.6% to $1,954.79 per ounce by 1045 GMT after hitting its lowest since March 17. U.S. gold futures were up 0.49% to $1,954.00...[LINK]

According to some press outlets, gold is higher this morning because of a retrenchment in the dollar, but that retrenchment is insignificant early on with dollar charts retaining a bullish setup.

However, the parties to the debt ceiling negotiations appear to be so confident in their ability to strike a deal next week, that the President and Congress are leaving Washington for the holidays...[MORE]

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Spot gold was up 0.7% to $1,953.03 per ounce at 1002 GMT, while U.S. gold futures were up 0.5% to $1,952.90...[LINK]

Spot gold was 0.2% higher at $1,961.77 per ounce by 1155 GMT. U.S. gold futures eased 0.1% to $1,962.60...[LINK]

Spot gold was up 0.3% to $1,981.46 per ounce by 1215 GMT, while U.S. gold futures gained 0.5% to $1,984.30...[LINK]

Spot gold fell 0.5% to $1,958.96 per ounce by 1123 GMT while U.S. gold futures were down 0.9% to $1,959.60...[LINK]

Fed Chairman Powell indicated last week that the ongoing banking crisis may prompt banks to curtail lending, slowing the economy.

"Our policy rate may not need to rise as much as it would have otherwise to achieve our goals."

Fed Chairman Jerome Powell

Fed funds futures put the probability of a 25 bps rate hike in June at 25.7%. That’s up from 20.1% last week, and 23.4% a month ago.

Treasury Secretary Janet Yellen told banking sector CEOs last week that additional mergers may be necessary. This suggests that Yellen doesn’t believe the crisis is over.

The Fed reported that commercial bank deposits dropped to $17.1 trillion in the week ended May 10. It was the fourth consecutive weekly outflow. Commercial banks have lost nearly $1 trillion in deposits in just over a year.

Yellen also reiterated to those same bank CEOs that failure to reach a deal on the debt ceiling would be “catastrophic” for the financial system, families, and businesses. The latest round of talks between President Biden and House Majority Leader McCarthy ended on Monday without a deal being struck.

Yellen has indicated that the U.S. could fail to meet debt obligations as soon as June 1. If the U.S. were to default, the repercussions would be far-reaching. “No corner of the global economy will be spared,” said Mark Zandi, chief economist at Moody’s Analytics.

According to Moody’s, if the default were to extend “well into the summer,” the unemployment rate could more than double to 8%. Rates would soar, and the stock market would plunge.

In such an event, gold would likely drop initially as a result of broad-based deleveraging. However, investors looking for a safe haven would eventually step in as buyers.

A rebound above $2009.39 would ease short-term pressure on the downside and return a measure of credence to the underlying uptrend. Such a move would return focus to the recent high at $2066.73 and the all-time high at $2075.28.

Silver

Silver remains defensive as a result of mounting growth risks and lingering uncertainty as to the Fed’s next move.

Silver reached a 7-week low at $23.33 before rebounding somewhat and ending the week with a loss of only 0.55% last week. It was the second consecutive lower weekly close.

ETF outflows totaled 2.02 Moz last week.

A U.S. default would have devastating implications for U.S. consumers, sapping demand for electronics, cars, and solar panels. All are big sources of demand for silver.

On the other hand, a recession and significant job losses would almost assuredly have the Fed contemplating rate cuts later this year. A reversal of the tightening cycle could make any recession relatively short in length and I would expect silver’s longer-term bullish fundamentals to kick back in at that point.

The 100-day SMA is holding on a close basis thus far. Secondary support is noted at $23.02 (50% retracement of the rally from $19.90 to $26.14).

However, a rise back above $24.73 is needed to shift the technical bias back to the upside, putting the recent highs at $26.09/14 back in play.

PGMs

Platinum continues to hold comfortably above the $1000 level. The short-term tone has turned consolidative just below the midpoint of the $1038.68/$1143.25 range.

A stronger dollar and growth risks have put the rally off the February low on pause, but platinum is holding up better than silver and palladium.

Palladium has turned consolidative just above the nearly 4-year low at $1329.18.

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.

Spot gold rose 0.3% to $1,964.09 per ounce by 1110 GMT, after hitting its lowest since early April on Thursday...[LINK]

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Spot gold fell 0.3% to $1,976.09 per ounce by 1106 GMT, earlier going as low as $1,971.99, its lowest since April 21...[LINK]

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Spot gold was down 0.1% to $1,987.29 per ounce at 1027 GMT, close to a two-week low hit on Tuesday. U.S. gold futures fell 0.2% to $1,989.70...[LINK]

Spot Gold Daily Chart through 5/15/2023

Worries about the debt ceiling standoff continue to underpin the yellow metal. While President Biden has expressed some optimism about debt ceiling negotiations, House Speaker McCarthy maintains that the two sides remain “far apart.”

Treasury Secretary Yellen has indicated that default could happen as soon as June 1. Eventually, lawmakers on one side or the other will blink and a deal will be struck before the U.S. defaults on its debt. The debt ceiling will be suspended or raised and in short order, we’ll be butted up against that new ceiling.

In the meantime, it’s worth noting where the national debt is currently, and perhaps, more importantly, its trajectory.

Total Debt: Total Public Debt through Q4 2022

As of year-end 2022, the federal debt stood at $31.4 trillion. According to the U.S. debt clock, that total is now above $31.7 trillion.

It’s hard to imagine what $31.4 trillion looks like. If you’re inclined, check out this graphic from the Visual Capitalist.

Federal Debt Held by the Public, 1900 to 2053: Percentage of Gross Domestic Product

The CBO projects that debt as a percentage of GDP will continue to rise, driven by increasing interest costs and higher spending for major healthcare programs and Social Security. Based on CBO projections, the debt/GDP ratio will approach 200% by 2053.

The Fed’s fight against inflation has pushed debt servicing costs significantly higher. Treasury says interest payments on the debt now stand at $460 bln annually, which is already 13% of total federal spending.

I’ve seen some projections suggesting interest payments on the debt could nearly double in the next year, which would put them on par with the entire defense budget!

This is not a pretty picture. The obvious solution is for lawmakers to cut spending and/or raise taxes. They’ll make a lot of noise about such things, but in reality, they are reluctant to do either.

They’ll have to impose such measures on the middle class to even make a dent. A politician that goes after the middle class doesn’t stay in office very long.

The easier solution – from a politician’s perspective – is to stealthily weaken the currency and inflate away the debt. This is a long-term reality that strongly favors gold ownership as a hedge.

Of course, the U.S. government is not the only one deficit-spending with abandon. U.S. consumer debt rose nearly $150 bln in the first quarter to reach a record $17.05 trillion.

This is troubling amid rising economic instability. There are concerns that the inflation we’ve experienced has pushed people to buy necessities on their credit cards, even as the 500 bps rise in interest rates over the past 14 months is driving up the debt servicing costs on those individuals.

This is not going to end well, particularly if we slip into recession this year and many of the people carrying all that debt lose their jobs.

Silver

Silver plunged 6.6% last week, falling to a 5-week low as growth risks pushed to the fore. It was the white metal’s biggest weekly drop since October of last year.

Spot Silver Daily Chart through 5/15/2023

Other industrial metals, such as copper and zinc took a beating as well, weighed by heightened worries that China’s post-lockdown recovery is losing steam.

More than 38.2% of the March to early-May rally has already been retraced. Silver ETFs saw net inflows of 2.91Moz last week, suggesting investors are finding value on this break. So far, the 50-day SMA is holding on a close basis, keeping more important supports at 23.40 and 23.02 at bay.

Despite the medium-term risks to growth, the longer-term fundamentals remain positive. Silver demand is expected to continue its upward trajectory, while the supply remains in deficit.

A climb back above $25 would ease pressure on the downside and return a measure of credence to the underlying uptrend.

PGMs

Platinum slid last week as well, notching a third consecutive lower weekly close. However, price action remains confined to the range that was established in April.

Spot Platinum Daily Chart through 5/15/2023

The longer-term fundamentals remain favorable, highlighted by tighter supply associated with power issues in South Africa and ongoing platinum for palladium substitution by the auto sector.

Palladium rotated lower at the end of last week. Despite recent tests of the upside, the longer-term trend remains decisively bearish.

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.

Spot gold was up 0.1% to $2,013.99 per ounce by 1132 GMT, having hit its lowest since May 5 on Friday. U.S. gold futures were mostly unchanged at $2,018.80...[LINK]

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Spot gold was down 0.6% to $2,004.15 per ounce, as of 1149 GMT, shedding 0.6% so far in the week. U.S. gold futures also fell 0.6%, to $2,006.60...[LINK]

Spot gold fell 0.1% to $2,026.99 per ounce by 1033 GMT, while U.S. gold futures ticked down 0.2% to $2,033.30...[LINK]

Spot gold was up 0.4% to $2,028.75 per ounce by 9:55 a.m. EDT (1355 GMT) while U.S. gold futures gained 0.2% to $2,036.40...[LINK]

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Spot Gold Daily Chart through 5/8/2023

Gold ended April with a gain of just over 1%. It was the second consecutive higher monthly close.

The Fed raised interest rates by another 25 -bps last Wednesday. However, key language was dropped from the policy statement, which suggested the much-anticipated pause in the tightening cycle may be upon us.

Gold liked the notion that rates may have peaked and pressured the April high at $2048.77. On Thursday, key resistance at $2070.64/$2075.28 was approached on reports of a drone attack on the Kremlin.

The yellow metal also continues to garner support from persistent concerns about the banking system. Last week, First Republic Bank became the third U.S. bank to fail this year.

It was the second-largest bank failure in U.S. history behind Washington Mutual which collapsed in 2008. First Republic assets were snapped up by JPMorgan Chase, but First Republic shareholders are likely wiped out according to CBS News.

This is going to perpetuate pressure on regional bank shares, as well as the run on deposits. Another bank, PacWest Bancorp, has acknowledged they are “exploring strategic options,” which means they are looking for a buyer before they are seized as well.

While the Fed and Treasury continue to assure us that the banking system is “sound,” minutes from the March FOMC meeting revealed that staff believes the crisis will lead to recession. This seems to suggest that banking sector turmoil will continue for some time, perhaps until rates start coming down and businesses start borrowing again rather than burning through savings.

Of course, a reversal of the Fed’s tightening cycle is going to be largely dependent on lower inflation. April CPI will be released on Wednesday and the market is expecting +0.4% m/m. PPI comes out on Thursday with median expectations of +0.3% m/m.

Treasury Secretary Janet Yellen has warned that failing to raise the debt ceiling could lead to “financial chaos” and an “economic catastrophe.” The current “extraordinary measures” being deployed to keep the country afloat could be exhausted as soon as June 1.

While the political brinksmanship will continue, possibly to the 11th hour, be assured the debt ceiling will be raised. It always is.

However, the politicians are messing with the “full faith and credit” of the United States in the midst of a burgeoning banking crisis that was triggered in large part by higher interest rates. As the risk of a U.S. default escalates, it puts upward pressure on rates.

Also keep in mind, that we are in the midst of a global de-dollarization movement.  Other countries are already eager to become less reliant on the greenback. A rise in U.S. credit risk is only going to accelerate that desire. A weaker dollar bodes well for gold.

The World Gold Council reported that central bank gold demand reached a Q1 record of 228 tonnes this year. That’s 34% higher than the previous Q1 record of 171 tonnes set in 2013. The WGC said the central banks “remained keen and committed buyers of gold.”

As the central banks of the world continue to aggressively diversify their reserve holdings by buying gold, individual investors should strongly consider doing the same.

Silver

Silver set a more than one-year high last week at $26.14 before retreating into the range. The white metal notched a 2.4% weekly gain, and the overall technical bias remains to the upside.

Spot Silver Daily Chart through 5/8/2023

Silver continues to show great resiliency even as recession risks mount. Silver also is well supported versus gold, which is typically a bullish signal for both of the precious metals.

The market continues to anticipate strong demand for silver driven by the ongoing electrification of the global economy. Global demand for silver rose 18% in 2022 to a record 1.24 billion ounces.

According to Philip Newman of Metals Focus, “We are moving into a different paradigm for the market, one of ongoing deficits.” The silver market had a deficit of 51.1 Moz in 2021, which grew to 237.7 Moz in 2022. The deficit for 2023 is forecast to be 142.1 Moz.

The IMF is predicting that Asia and the Pacific – led by India and China – will be the most dynamic region in terms of growth in 2023. The region is expected to account for 70% of global growth in 2023! That bodes well for a whole host of industrial metals, including silver.

India and China are also the two largest buyers of gold.

Even if the U.S. slips into recession, any regional demand destruction could be offset by accelerating growth in Asia.

Strong and growing demand along with supply deficits should keep the price underpinned with potential to $30 and beyond. Retreats into the range are likely to be viewed as buying opportunities.

PGMs

While platinum closed lower last week, it continues to hold an important trendline on a close basis. Recent corrective action is holding comfortably above $1000.

Spot Platinum Daily Chart through 5/8/2023

Heraeus believes that platinum investors are finally taking note of South Africa’s power problems. Load shedding could result in a loss of 250 koz of platinum production.

Demand prospects, particularly from the auto industry, continue to improve even as the market share of EVs grows. Platinum for palladium substitution remains a significant theme as well.

Palladium has seen a nice pop in recent sessions but remains within striking distance of the nearly 4-year low set in March at $1329.18.

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.

Overnight China apparently raised its gold holdings by 8.09 tons last month, resulting in October through April gold reserve additions of 120 tons. The overall Chinese gold reserves are pegged at 2,076 tons, but we suggest that number is an unsubstantiated figure likely to be strategically understated by the Chinese central bank.

Last week gold ETF holdings increased by 138,847 ounces but remained down 0.2% on the year. On the other hand, silver ETFs reduced their holdings by 1.2 million ounces last week with year-to-date gains in silver holdings of 0.2%...[MORE]

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Spot gold were up 0.3% to $2,023.12 per ounce as of 1028 GMT. U.S. gold futures rose 0.3% to $2,030.70...[LINK]

Perhaps the gold and silver trade is seeing growing #recession fear and expectations of further slowing of physical demand.

Yesterday's bearishness is also accentuated by World Gold Council predictions of softening Indian gold demand in both the June and September quarters...[MORE]

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Spot gold fell 0.7% to $2,036.74 per ounce by 1138 GMT, which some analysts termed a "consolidation", but was up 2.3% for the week. U.S. gold futures shed 0.5% to $2,045.90...[LINK]

From a fundamental perspective, Indian gold prices posted a record high overnight and in the past Indians have been very price conscious which in turn could result in a near-term demand void.

However, the gold market should be supported by another inflow to gold ETF holdings of 24,688 ounces yesterday as that narrows the year-to-date decline in holdings to only 0.2%...[MORE]

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Spot gold ticked up 0.2% to $2,042.43 per ounce by 1145 GMT after climbing earlier to $2,072.19, just shy of a record high of $2,072.49 touched in 2020...[LINK]

At times yesterday, gold and silver prices diverged, with gold remaining consistently in favor in a possible sign of the entrenched flight to quality interest from both economic and political uncertainty.

In fact, news that Iran has seized an oil tanker in the Straits of Hormuz adds an additional measure of political uncertainty to the gold trade today...[MORE]

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Spot gold was little changed fell 0.06 % to $2,014.97 per ounce by 1135 GMT, after rising more than 1% on Tuesday...[LINK]

However, we think the silver market will diverge from gold with classic physical commodity market fundamentals driving silver prices.

Unfortunately for the bull camp in gold, the dollar index appears to be poised to break out to the upside of a 3-week sideways consolidation pattern today perhaps because of signs of negotiating in Washington to avoid a government shutdown...[MORE]

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Spot gold rose 0.2% to $1,986.53 per ounce by 1241 GMT while U.S. gold futures inched up 0.1% to $1,994.70...[LINK]

Spot gold fell 0.5% to $1,980.78 per ounce by 0759 GMT. U.S. gold futures shed 0.5% to $1,989.20...[LINK]

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Spot gold fell 0.5% at $1,978.72 per ounce by 1141 GMT, while U.S. gold futures also slipped 0.5% at $1,989.00...[LINK]

Spot Gold Daily Chart through 4/24/23

Focus is already on next week’s FOMC meeting, where another 25-bps rate hike is widely expected. The CME’s FedWatch tool places the probability at 92%. The odds for an additional 25-bps hike in June continue to edge higher and now stand at 24.1%.

The Fed seems to think they have more to do on the inflation front, even as the market’s expectations for inflation continue to moderate. The index of common inflation expectations fell to 2.22% in Q1, the lowest level since Q2-21.

Meanwhile, incoming data continue to suggest the economy is slowing. The minutes from the March FOMC meeting revealed that even the central bank’s staff believe a mild recession will begin “later this year, with a recovery over the subsequent two years.”

In addition, job growth slowed in March and is forecast to come in weaker yet in April. Median expectations for nonfarm payrolls are +175k, down from +236kn in March.

A recession would certainly knock inflation lower, as would slower jobs and wage growth. However, the market seems to believe the Fed won’t wait for any of that to happen and will instead remain aggressive in battling price risks. That strategy does not bode well for a soft landing.

With gold trading less than 4% off its all-time high of $2075.28, the yellow metal is arguably well positioned to push to record highs if the Fed (and other central banks) are put in the position of having to reverse course and start easing policy. My first significant technical objective would be $2194.58 based on a Fibonacci projection.

Last week I suggested short-term downside potential was to $1959. So far, the market has traded as low as $1969.30. There is scope for further tests of the downside until the next policy announcement on May 3^rd, particularly if prospects for a June rate hike continue to increase.

Silver

Silver ended last week with a 1.1% loss, but a firmer tone prevailed on Monday. Thus far, the white metal is holding its 20-day moving average.

Spot Silver Daily Chart through 4/24/23

While the trend remains favorable, rising economic growth risks warrant a measure of caution. Silver ETFs saw significant outflows last week, suggesting that investors may lack confidence in the fundamentals needed to push silver back to the critical $30 zone.

A recession later in the year could result in a significant retracement of the March-April rally, but I also suspect the Fed will be quick to start cutting rates in reaction. That would help limit downside potential as will the more favorable economic prospects for China as the world’s second-largest economy continues to recover from COVID lockdowns.

Last week, the Silver Institute highlighted that “all major demand categories achieved record highs in 2022.” Total silver demand jumped 18% y/y to a record 1.242 billion ounces.

Amid this strong demand environment and a marginal contraction in mine output, the supply deficit reached 237.7 Moz in 2022. The Silver Institute called it "possibly the most significant deficit on record."

The Silver Institute is projecting that the silver market will remain out of balance in 2023, to the tune of 142.1 Moz. If confirmed, it would be the third consecutive annual supply deficit, which should help underpin the market.

Renewed probes about $26 would return focus to the $26.95 high from March 8, 2022. The latter is seen as the trigger that would put the key COVID-era highs at $29.86/$30.14 in play.

On the downside, a violation of the 20-day SMA at $24.83 would shift attention to congestive support around $23.70, which corresponds with the 38.2% retracement level of the rally from $19.90. Short-term losses are still seen as corrective in nature.

PGMs

Platinum surged nearly 8% last week, establishing a 13-month high at $1143.25. It was the sixth consecutive higher weekly close.

Spot Platinum Daily Chart through 4/24/23

However, platinum had become quite overextended, the most since December 2020. Corrective pressures emerged on Monday, resulting in a loss of 3.6%.

At this point, I’m viewing this week’s setback as corrective.  While mounting growth risks do have the potential to take the wind out of platinum’s sails, supply and demand fundamentals are likely to limit the downside.

Persistent power issues in South Africa should keep supply tight. The deficit is expected to reach 556 koz this year.

On the demand side of the equation, global light vehicle sales are expected to increase by 6.2% in 2023 to 86.1 million units. The China Association of Automobile Manufacturers (CAAM) is projecting a 3% bump in Chinese sales to 27.6 million units. That would be nearly a third of projected global sales.

CAAM is anticipating that demand for “new-energy” vehicles will increase by 35% to 9 million units. That will do more for silver and copper than platinum.

While auto sector supply chain issues are still likely to be a problem, ongoing platinum for palladium substitution and increased loading in catalytic converters should help to underpin platinum.

Despite 6-weeks of gains in palladium, the chart suggests the gains were corrective in nature. Recent probes above the 100-day SMA could not be sustained and palladium retreated more than 4% on Monday.

Spot Palladium Daily Chart through 4/24/23

A retreat below $1489/87 would return a measure of credence to the dominant downtrend, returning focus to the $1329.18 low from March 9^th.

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.

Spot gold was mostly flat at $1,983.06 per ounce by 11:25 a.m. EDT (1525 GMT) while U.S. gold futures were up 0.2% to $1,993.60...[LINK]

However, the gold market showed signs yesterday that it was receiving a flight to quality bid from renewed economic uncertainty and perhaps more importantly from escalating concerns of potential trouble in the financial markets from the debt ceiling situation.

In fact, a significant jump in credit default swap rates has surfaced and according to Reuters, those yields reached the highest levels in more than a decade, with some analysts suggesting the prospects of a technical default are no longer insignificant...[MORE]

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Spot gold was down 0.8% at $1,987.59 per ounce by 1150 GMT. Bullion has also lost about 0.8% so far this week, its biggest such decline since late February. U.S. gold futures fell 1% to $1,998.10...[LINK]

Spot gold climbed 0.6% to $2,004.59 per ounce by 10 a.m. EDT (1400 GMT), after hitting a two-week low of $1969.1 in the previous session. U.S. gold futures rose 0.4% to $2,016.00...[LINK]

Spot gold rose 0.4 % to $2,002.72 per ounce by 0909 GMT. U.S. gold futures were also up 0.4% to $2,015.40...[LINK]

Spot Gold Daily Chart through 4/17/23

Both CPI and PPI came in below expectations in March. PPI posted its biggest monthly decline since April 2020.  With inflation concerns waning, so too does a significant bullish catalyst.

Nonetheless, there is a growing expectation that the Fed will hike interest rates at the May FOMC meeting. Based on the CME’s FedWatch tool, the probability of a 25-bps hike now stands at 91%, that’s up from 72.2% last week and 20.7% a month ago.

Assuming the Fed does indeed tighten in May to the 5.00-5.25% range, the market believes they will hold steady in June. There is however an 18% probability of another 25-bps high in June.

Keep an eye on EU and UK inflation data this week. Hot numbers would likely prompt the respective central banks to maintain their bias toward tighter policy with the potential to further narrow interest rate differentials.  

Providing some additional weight on gold is the fact that the dollar held a significant support level. The low from February 2 in the dollar index at 100.82 was ever-so-slightly exceeded on Friday last week but may be considered technically intact.

Dollar Index Daily Chart through 4/17/23

While the subsequent rally hasn’t been terribly impressive, a case can be made for a potential double-bottom. The confirmation point for that pattern is the 105.88 high from March 8, which is not in any immediate jeopardy.

The dollar has pressured its 20-day SMA already and penetration would clear the way for additional gains toward the 103.50 zone, where the 100 and, 200-day SMAs converge with the 50% retracement level of the latest leg down.

Such gains in the greenback would likely keep the pressure on gold. Short-term potential is back to the $1959 level, but such a move would be seen as corrective. My sense is that there are quite a few interested buyers feeling the market got away from them.

While there are reports that the recent higher prices have tamped Asian demand, I still believe there is potential for a near-term challenge of the all-time high at $2075.14.

Global gold ETF inflows were 164,805 ounces last week. It was the fifth consecutive weekly inflow, but holdings are still 0.3% lower YTD. We’ll be watching closely to see if more buyers come in on the break or if the recent longs are weak.

Silver

Silver gained 1.6% last week, it was the fifth consecutive high weekly close for the white metal, which probed above $26 for the first time since April of last year.

Spot Silver Daily Chart through 4/17/23

A softer tone prevailed on Friday into Monday, taking out nearby trendline support. Scope is seen for additional short-term losses back to the 20-day SMA at $24.25. Secondary support is marked by the 38.2% retracement level of the recent leg higher at $23.72.

The IMF now forecasts global growth of 2.8% in 2023, down from 3.4% in 2022. They believe China and India will account for more than half of that growth.

The IMF then sees the global economy averaging around 3% growth over the next 5 years. That’s well below the 3.8% average that was achieved in the previous 20 years.

That outlook doesn’t bode terribly well for industrial metals, and yet I suspect much of the growth that is realized will be driven by technology and the strong trend toward electrification. Silver should fare well in such an environment, even if the overall pace of global growth is weak.

Last week the Biden administration announced a plan to significantly increase vehicle emission standards beginning with the 2027 model year, projecting that 2/3rds of all vehicles sold in the U.S. would be EVs by 2032. That’s less than 10 years from now!

Whether such lofty goals are even remotely feasible remains to be seen, but it does seem likely that EVs will continue to gain market share. On average, EVs contain about 44% more silver and 2.5 times more copper than conventional vehicles.

PGMs

Platinum posted a 4% gain last week, notching a fifth consecutive higher weekly close. While gold and silver were defensive to start the week, both platinum and palladium displayed some buoyancy on Monday.

Spot Platinum Daily Chart through 4/17/23

While platinum remains well within its range, the recent strength seems to defy the tepid global growth prospects and the Biden administration’s push to get rid of most vehicles powered by internal combustion engines.

Fewer ICE vehicles will ultimately result in diminished demand for auto catalysts. However, the market may have latched on to the expectation that emission standards will continue to be more stringent in the intervening years, requiring greater PGM loading.

Palladium has rallied about 18% since the $1329.18 low was set on March 9. A move above the 100-day SMA at $1612.66 would suggest potential back to $2000.

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.

3/21/2023

Unfortunately for the bull camp, the hope for a resurrection of Chinese industrial/physical demand for gold was heavily undermined overnight in the wake of news that Indian February gold imports might have dropped by 41% relative to year-ago levels. Indian consumers continue to be highly price-sensitive especially given poor purchasing power from their currency.

Apparently, India might have imported only 46 tons in February which means the world's second-largest consumer is unlikely to buy unless enticed into action by further notable declines in prices.

However, the gold market should draft some support from news that the Australian central bank cut interest rates overnight and more importantly from a multi-country conference call led by led by the US Federal Reserve Chairman and the US Treasury Secretary on a response to the economic threat from the virus.

Unfortunately, the G7 failed to promise action to battle the headwinds from the virus event but perhaps something will be forthcoming from other financial leaders later today. However, the gold market showed only fleeting lift yesterday from Fed funds rate signals projecting a 99% probability of a 75 basis point rate cut by the US later this month and that is extremely disappointing to the bull camp.

In yet another modest negative, gold ETFs sold holdings yesterday which means holdings have been reduced in two out of the last 3 trading sessions.

The big question for the bull camp in gold and silver is whether the markets going forward will be relieved that physical demand won't be derailed for a significant period of time, or will the trade need to see conditions that prompt a "number" of central banks to act aggressively.

However, we cannot emphasize enough the potential for extreme volatility which should be metered with the use of futures and option combinations. Pushed into the market we give the edge to the bear camp today.

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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 Financial Services LLC, unless otherwise expressly noted.

The February 25th Commitments of Traders report showed Gold Managed Money traders added 766 contracts to their already long position and are now net long 284,972. Gold Non-Commercial & Non-Reportable traders hit a new extreme long of 426,732 contracts. Non-Commercial & Non-Reportable traders net bought 5,068 contracts and are now net long 426,732 contracts.

Like the platinum market, if the precious metals complex is indeed poised to return to a classic precious metals fundamental focus, (benefiting from historically low/negative interest rates, exploding global debt, coordinated central bank stimulus, and aggressive fiscal stimulus) silver should be considered extremely cheap fundamentally.

Also like platinum, the silver market into the lows last year was at the cheapest levels since the subprime crisis.

Furthermore, the gold/silver ratio is approaching the highest levels in at least 50 years at 95.6 with the modern era all-time highs seen up at 98.95.

The Commitments of Traders report for the week ending February 25th showed Silver Managed Money traders are net-long 62,850 contracts after net selling 5,593 contracts. Non-Commercial & Non-Reportable traders reduced their net long position by 4,160 contracts to a net long of only 100,348 contracts.

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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 Financial Services LLC, unless otherwise expressly noted.

Pete Thomas and Peter Grant of Zaner Metals discuss the precious metals market for the week ended Feb 28, 2020.

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 participants and not those of Zaner Financial Services LLC, unless otherwise expressly noted.

In the short term reduced face to face interaction/slowing industrial activity in China and Indian in particular, is likely to crater gold demand with those two countries responsible for nearly 1,000 tons of gold consumption per year!

In fact, given that gold posted a record net spec and fund long positioning in the last COT report, the market should expect to see a cascade of stop-loss selling, especially with the market this morning failing to hold a quasi-double low on the charts at $1626.60. The last COT positioning report in gold posted a new all-time record long of 421,664 contracts and therefore further chart failures should facilitate more stop active loss selling waves and a possible washout quickly back to $1,600.

In short, the gold bugs must be beside themselves with gold's performance over the last 5 trading sessions with the market simply shrugging off what should be considered the biggest economic uncertainty since the subprime debacle.

One could suggest that the current situation is worse than the subprime crisis, as the world is facing a major "slowdown" in economic activity and is seeing the potential for an explosion in global debt levels and sever financial carnage.

In yet another psychological negative for gold prices, Gold ETFs liquidated 82,299 ounces of gold yesterday and that suggests small investors have finally balked after 25 days of purchases.

Surprisingly silver ETF's adding 1.34 million ounces yesterday.

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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 Financial Services LLC, unless otherwise expressly noted.

It was the six consecutive daily loss in the Dow, which is now more than 4,000 points (13.7%) off the 29,594.20 record high that was set just two weeks ago. That means the DJIA is officially in a correction, and less than 2,000 points away from being in a bear market.

Nonetheless, gold was unable to sustain intraday gains and ended the session only slightly higher. This is likely attributable to mounting pressure from deleveraging; where investors sell profitable positions to cover margin calls stemming from stock market losses.

We saw a sizable correction in gold back in 2008 as the housing crisis morphed into a full-fledged banking crisis and stocks tumbled. I'm not expecting a 34% drop in gold at this point, but volatility is likely to be high as the desire for a safe-haven meets the headwind of deleveraging and broad-based pressure on commodities.

Even mounting expectations of a Fed rate cut and the attendant pressure on the dollar couldn't provide a sustained tailwind for gold today.

Silver remains under pressure within the recent range and approached the 100-day SMA at 18.56. A breach of this level would put the recent lows at 17.44/38 in play.

Platinum tumbled for a sixth consecutive session, breaching its 200-day SMA. The next supports to watch are 882.00 (05-Dec-19 low) and 863.50 (12-Nov-19 low).

Palladium jumped to a new record high today at 2875.50. Mounting global growth risks don't seem to be a deterrent in the Pd market at all.

As noted this week in the Zaner Precious Metals Report, "The trade seems to view the palladium market as the 'new gold,' with traders seeing it as having safe-haven and supply-shortage appeal."

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 Financial Services LLC, unless otherwise expressly noted.

However, the market did see signs of the virus promoting sales of precious metals coins, which smacks of anxiety-driven safe haven speculation. It should also be noted that gold ETF holdings have returned to record levels, in excess of 3,016 tonnes, with some reports indicating the inflows to date in February have already surpassed the inflows for the entire month of January.

In our opinion, the small investors/bag holders have not fully moved into position yet, even though it is likely that the COT positioning adjusted for this week's rally will register another new record net long for speculators. For a fully bought-out condition in the small investor category, we would probably need to see daily ETF inflows on the order of 5 or 6 million ounces per day.

Fortunately for the bull camp, the dollar seems to have lost its edge over other currencies, and a resumption of the downward track in global equity markets today could bring gold back to the February highs fairly quickly.

It is possible that the violent religious/ethnic clashes in New Delhi could temper retail gold demand in India but could ultimately result in safe-haven buying if the situation becomes a threat to economic stability.

A normal retracement bounce of the recent washout could easily allow for a retest of $1,666 in April gold, with critical support now seen at this week's quasi-double low of $1,626.60.

Even if it appears that a vaccine shows significant promise, the ongoing threat of slowing will likely keep central banks around the globe in an easing posture and therefore leave gold with a bullish longer-term environment.

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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 Financial Services LLC, unless otherwise expressly noted.

The CDC confirmed a new case of unknown origin in northern California late on Wednesday. The CDC is trying to ascertain how this person contracted the disease and if others had been similarly exposed.

This news broke just hours after President Trump tapped Vice President Mike Pence to head up U.S. prevention efforts. While the President suggested a vaccine was "coming along very well," the head of the National Institute of Allergy and Infectious Diseases said it could a "year-and-a-half" until its ready.

Based on my NextDoor feed, people in my neighborhood in Denver are preparing for an outbreak; laying in nonperishable food, bottled water and of course masks.

Look for gold to remain generally well bid as the crisis continues to play out.

Silver and platinum were under pressure again on Wednesday, weighed by ongoing global growth risks. Meanwhile, palladium continues to defy gravity, moving back within striking distance of last week's record high at 2842.50.

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 Financial Services LLC, unless otherwise expressly noted.

The trade could be fearful about the potential for a sustained setback in Chinese physical gold purchases and while we have no credible evidence of this, it is possible that China could be selling gold from its central bank holdings to fund activity to stimulate its economy.

Furthermore given significant palladium strength on Tuesday, it almost seems like it has become the safe-haven of choice instead of gold.

However, it should be noted that ETFs increased their gold holdings for the 25th straight day bringing this year's net purchases to 2.93 million ounces and that inflow was very significant as it was the biggest inflow since the beginning of the headlines on the virus outbreak. Other stories have pointed out that gold-backed ETFs are seeing an unprecedented inflow which should leave that long-term investment-driven bull market hope alive.

Not surprisingly May silver performed poorly as well yesterday gapping lower and trading back into the range up day from a week prior as it clearly rejected Monday's high move. Fortunately for the bull camp May silver appears to have found some support at $18.00 but pushed into the market we see silver behaving as an industrial commodity facing recession unless gold prices began to lead again with very strong gains.

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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 Financial Services LLC, unless otherwise expressly noted.

On Tuesday, the Center for Disease Control warned of a possible coronavirus outbreak in America, sending the stock market reeling once again. The market took little solace in reports from U.S. health officials that they were hoping to start human trials on a coronavirus vaccine in 6 weeks.

Amid mounting risk aversion, one might expect gold to remain on the bid, but a correction like we're seeing today is not unheard of. As investors bail out of commodity funds and ETFs, they are in effect selling gold. Additionally, sharp losses in stocks frequently cause investors to liquidate profitable positions to cover margin calls.

Continue to view setbacks as buying opportunities. I'm watching support defined by the 1618.98/1611.41 zone, which happens to correspond with the 9-day SMA.

Silver is trading more like an industrial metal today, erasing much of the past week of safe-haven driven gains. The white metal is being hit hard by growing fears of severe drops in Chinese demand for autos, electronics, and photovoltaic cells.

Spot Silver Daily Chart

Silver traded briefly below the 20-day SMA, but the 50-day held. Further tests of the downside may be in the offing and I suspect the haven crowd will continue to buy on dips within this year's range.

That being said, the risks to Chinese and global growth pose a formidable headwind to any metal that derives the majority of its demand from industrial use.

Platinum is a case in point; having tumbled more than 4% today and more than 9% since last week's high at 1018.16. The 61.8% retracement level of the rally from 863.50 (12-Nov-19 low) to 1041.45 (16-Jan-20 high) has been violated. Platinum is also poised to close below the 100-day SMA for the first time this year.

I'd look for silver and platinum to be rather choppy and broadly defensive for the short to medium term as the coronavirus crisis plays out. At this point, if you're looking for a safe-haven, gold is most definitely the preferred choice.

Palladium is perhaps expectedly the exception to the rule. As we've noted in recent videos, Chinese auto demand has plunged 92% versus last February. That's a startling number and will unquestionably impact the demand side of the equation for palladium,

However, palladium has been in a structural deficit for years and that is likely to continue even with the loss of Chinese auto demand. A corrective/consolidative phase is arguably overdue, so we may have indeed seen at least an interim high last week at 2842.50.

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 Financial Services LLC, unless otherwise expressly noted.

Evidence of this surging interest was manifest in last week's new all-time record spec long in futures gold/options positioning with a net long of 421,664 contracts. It should be noted that Monday registered a record single-day options trade and it is clear that traders are now cognizant of the potential volatility and or are attempting to gain leveraged long positions.

At initial price levels today the COT positioning report after the close Friday is likely to post another new all-time spec long with gold prices early today sitting at least $50 an ounce above the level where the "record" was measured. On the other hand, the volume of futures traded over the prior four trading sessions has not been extensive and open interest in gold futures still sits 66,000 contracts below the high posted last month and therefore a technical top signal has not been registered yet.

While it would appear as if the high level of anxiety from the fear of pandemic from yesterday has been toned down seeing the Chinese president delay a parliament meeting in Beijing because of the virus threat in the capital city suggests the initial containment efforts have not contained the virus.

Not surprisingly Hong Kong exports of gold into mainland China fell sharply in January in a sign that the Chinese gold consumer is preoccupied at the same time that the Chinese central bank has bigger fish to fry than building its gold reserves.

Another potential very supportive development for gold is the idea that US treasury yields heading are headed toward record lows as that combined with expectations of further global central bank action should underpin gold prices. A

s a sign of ongoing inflows into gold ETFs increased their gold holdings for the 24th straight session bringing this year's net purchases up to 2.5 million ounces.

Unfortunately for silver ETFs cut their holdings and posted the biggest one date decline in holdings since January 14th.

For the action today we doubt scheduled data will have an impact on gold and silver prices with the coronavirus spread outside of China likely to be the dominating focus. However, traders are on the defensive with several reports of vaccine tests which could certainly end the extreme threat but a vaccine will take time to spool up production and therefore the spread rate in the near term will remain the focal point.

In other words, in the event a credible vaccine is found or thought to be found that could take out significant the risk-off interest in gold.

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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 Financial Services LLC, unless otherwise expressly noted.

Pete Thomas and Peter Grant of Zaner Metals discuss the big jump in gold and silver on Feb 24, 2020.

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 participants and not those of Zaner Financial Services LLC, unless otherwise expressly noted.

Even prior to this move, the markets had begun putting significant safe haven premium into prices. Foremost in the market's mind this week is the virus, and how much it will affect China and the rest of the world's economy.

A second and perhaps more sustainable bull argument for gold is the idea that China will use every monetary and fiscal tool it can get ahold of to support their economy and that other central banks (perhaps even the US) will take preemptive action and pump-up liquidity.

It also appears that gold is getting "rotational investment" in what could be the most credible example of it a decade.

On the other hand, roughly $150 has been injected into the market on the expectations of the aforementioned bull forces, and some progression toward those outcomes will be needed to avoid significant two-sided volatility.

Adding to that potential is the fact Friday's Commitments of Traders report showed a large spec and fund net long position as of last Tuesday and that gold prices have rallied another $80 since the data was collected. The report showed managed money traders were net buyers of 54,837 contracts of gold for the week, increasing their net long to 284,206. Non-commercial & non-reportable traders combined were net buyers of 63,390, increasing their net long to 421,664, which is a new record.

In silver, managed money traders were net buyers of 12,432 contracts, increasing their net long to 68,443. Non-commercial & non-reportable traders were net buyers of 10,994, increasing their net long to 104,508, which is approaching the all-time high of 118,943 from April 2017.

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Overnight the bull camp added in speculation of rate cuts and excessive stimulation in China as reasons to pile into gold.

The investment quality gold storyline was given a further boost overnight by news yesterday that Swiss monthly exports of gold into Hong Kong jumped considerably despite the turmoil in that economic zone.

Obviously one of the most dominating forces lifting gold and silver prices today is the news that the Chinese virus count showed an uptick overnight. With reports of potential virus spread in the capital city of Beijing, some traders are moving into gold under the premise that China will now have a more serious problem outside the initial quarantine areas.

Certainly, safe-haven buying off the ongoing potential for an instant spike in anxiety from the coronavirus continues, but that influence is magnified by the idea that China will now throw everything it has to save growth.

Apparently, the gold market is interpreting vice Fed chairman comments yesterday into ideas that the Fed could cut rates before the end of the year. Adding further into the upward track in gold is the 22nd straight day of inflow into gold ETFs bringing this year's inflow to 2.5 million ounces.

Even the silver market is beginning to get lift with the March contract seemingly on a path to retest the January high up at $18.89.

In the end, we assume that the breakout/extension in gold and silver prices this week is going to create a follow-through wave of buying. The next upside target in gold is seen from $1660.

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The gains also confirm the breach of the 61.8% retracement level of the entire decline off the all-time high at 1920.74 (2011) to the 1046.18 low (2015). Considerable confidence has been returned to the long-term uptrend as well as the rising number of projections that call not only for a retest of the all-time high, but move on to the $2,000 level.

Spot Gold Monthly Chart

The ability of gold to forge 7-year highs in the face of a slow down in the number of new coronavirus cases, a rising dollar, and rising stocks is a testament to the durability of this rally. Should the dollar and/or stocks correct, or the number of coronavirus cases jump unexpectedly, the bull market in gold could really accelerate.

Silver was consolidative on Thursday, unable to extend the recent gains. While the gold/silver ratio rebounded, the silver market still looks pretty good. Scope remains for a retest of the January high at 18.86.

Palladium saw its first lower close in 9 sessions, but price action was confined to Wednesday's range. The trend remains unquestionably bullish.

Platinum fell rather sharply, losing 2.5% and retracing much of the gains notched in the previous three sessions. Platinum managed to close above the 9- and 20-day SMAs, but a return to the consolidation band around 960 is a possibility. Solid chart support at 950.50/949.50 should remain protected.

The new all-time high for rhodium is $12,700.

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 Financial Services LLC, unless otherwise expressly noted.

While the bull case continues to see purchasing off the ongoing potential for a severe infection inspired meltdown, it also appears as if other buying is being facilitated by what has become a daily Chinese stimulus pattern. More money is also flowing to gold ETF holdings with Deutsche Bank expecting holdings to continue to rise until those derivatives hold more gold than ever! Gold ETFs yesterday increased for the 21st straight day with year to date purchases already 3% higher than January 1st.

In a surprise bullish development overnight Switzerland saw its gold exports to China jump by more than fourfold over the December tally. In short, it would appear as if the focus of the gold trade is becoming less and less on the uncertainty from the virus and is focusing more intently on the potential for "money" to throttle up prices ahead.

Overnight Bloomberg noted significant increases in trading volume of bull call spreads in October gold and large outright purchases of April and July calls. In fact, those noted active option strategies included $1700 calls and $2150 calls which in turn suggest some traders have fairly significant upside targets.

Finally from a technical perspective, traders overnight indicated that the January and early February sideways consolidation balanced an overbought condition and sets the stage for a technically based extension ahead.

In the end, the bull camp has multiple bull themes but longs still need to be careful of a sudden reversal in the event the virus count improvement starts to be accepted.

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Recent gains in gold come despite a near-three-year highs in the dollar index and record-high closes in the S&P 500 and NASDAQ. Gold rallying in tandem with stocks and the dollar highlights mounting expectations for further monetary and fiscal accommodations to support the global economy.

Adidas reported today that sales in China are off a whopping 85% as a result of the coronavirus, versus the same period last year. Imagine the impact on the world economy if these results are being replicated across multiple brands. It has the potential to be a dismal Q1.

Citi believes that coronavirus associated market jitters will continue to inspire safe-haven buying of gold. They see upside potential to $2,000 in the next 12 to 24 months.

“Gold should perform as a convex macro asset market hedge, resilient during ongoing risk market rallies but a better hedge during sell-offs and vol spikes.” – Citi analysts led by Ed Morse

The metals garnered some additional support from hotter than expected PPI. The January headline PPI print was +0.5%, on expectations of +0.1%. The annualized rate of inflation at the producer level jumped to 2.1%, versus 1.3% in December.

Core PPI also rose 0.5%, on expectation of +0.1%. Annualized core PPI came in at 1.7%, up from 1.1% y/y in December.

Silver gained another 1.5% on Wednesday, moving within 50¢ of the 18.86 peak from January. It was the fifth consecutive higher daily close.

The gold/silver ratio fell for a fifth consecutive session. As a general rule, I like when silver leads gold on rallies, so price action this week has been encouraging.

An eventual new high for the year above 18.86 would bode well for a more a challenge of the more important cycle high from last September at 19.65.

Palladium surged to another record high at 2842.50, before coming under intraday pressure. At one point during Wednesday's session, palladium was $199 (7%) off that high. However, by the close, more than 50% of the intraday decline had already been retraced.

Platinum regained and closed above the $1,000. More than 61.8% of the recent correction has now been retraced, lending credence to the scenario that calls for a retest of the January high at 1041.45.

Rhodium set a fresh record high of $12,550, based on the Johnson Matthey New York Base Price.

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 Financial Services LLC, unless otherwise expressly noted.

According to some press coverage there continues to be widespread "skepticism" on daily Chinese infection count readings while others are speculating that restarting production/manufacturing could result in breakouts beyond the quarantine areas.

Other supportive influences to start today are a 20th straight daily inflow into gold ETF holdings (+253,595 ounces) and a higher gold price close in Hong Kong. It is also likely that the April gold contracts rise above $1600 has created some technically based follow-through buying which in turn is likely to provide gold mining shares with lift once the stock market opens.

While not a primary bull force today, news that Kazakhstan, India, Ecuador, and the United Arab Emirates all increased central bank gold reserves last month adds classic fundamental credibility to the upside breakout. However, it should be noted that Turkey reduced its gold reserves while Chinese month-end holdings were unchanged.

While we are a little skeptical of the strong upward track because of a lack of definitive risk-off sentiment, the charts are persuasive and one certainly one can't discount the potential for headlines from the virus front suddenly rekindling significant anxiety.

On the other hand, one could make the argument that even with the infection rate coming under control each passing day, seeing 760 million Chinese remaining under quarantine is likely resulting in untold damage to the world's second-largest economy.

Given the ongoing threat against the Chinese government is expected to continue to implement historic stimulus efforts we have to wonder if inflation is finally finding a spark after decades of deflation!

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Gold continues to garner support from safe-haven buying amid ongoing concerns that the coronavirus is likely to have a significant impact on global growth. Additionally, expectations are mounting that governments and global central banks will unleash additional stimulus in an effort to support the economy. That too is providing some lift for gold.

Spot Gold Daily Chart

The World Health Organization put the total number of coronavirus cases at 73,332 and the death toll at 1,873 on Tuesday.

Apple warned today that the coronavirus related disruptions in China are likely to impact both iPhone and iPad supplies, adversely affecting revenue. Similar supply chain disruptions are likely to manifest throughout the global economy.

Silver seemed to put on its 'safe-haven hat' today, posting a 2% gain and closing above $18 for the first time since 27-Jan. That pushed the gold/silver ratio back below 88.00, favoring a test of support at 87.54.

Silver appears destined to challenge chart resistance marked by the 18.35 high from 27-Jan. An eventual breach of this level would return focus to the early-January high at 18.86.

Platinum surged more than 2% to a 3-week high, while palladium charged to a new all-time high of 2636.50. Besides the ongoing palladium supply deficit, our morning newsletter suggested that investors are increasingly viewing Pd as a "tighter supplied safe-haven and a very compact store of portable assets."

The New York Johnson Matthey base prices for rhodium hit a new all-time high of $12,000 today, with little to suggest the parabolic rise is nearing an end.

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 Financial Services LLC, unless otherwise expressly noted.

In fact, headlines are rife with notices of global conferences being canceled, Apple has stirred fears with revenue warnings and a number of global companies are expressing concern about production problems due to supply chain disruptions. The gold trade is also aware of Chinese efforts to bring their economy through the current historical disruption with historical measures designed to provide stimulus and liquidity especially with those efforts mirrored by other central banks in the global community.

While not a major and instant spark for the bull camp, gold ETF holdings posted a 19th straight day of inflows bringing net purchases this year up to 2.1 million ounces. Furthermore, the press overnight has made note of increased "popularity" of gold exchange-traded funds in India and that should not be discounted as that could be a very significant demand influence on international gold prices.

In fact, in the month of January gold ETFs in India registered the highest monthly jump in gold asset holdings since the January 2013 record. More importantly, it should be noted that the net holdings of gold ETF's in India stood at roughly 62 billion rupees but that is only half of the record holdings of Indian Gold EFT of 120 billion seen in 2013! Therefore despite the relatively expensive gold in terms of rupee pricing, Indian buyers seemingly retain significant capacity and interest.

Apparently, the gold market is not hindered by another higher high for the move in the dollar index which has now reached the highest level since September 2019. Clearly, the gold trade is also un-interested in news of a noted half year gold production increase from Pan-African Resources PLC perhaps because the net output gain was only 11,000 ounces over similar year-ago figures.

While the gold net spec and fund long positioning is already lofty and is probably understated by the rallies since the last report was measured it remains 43,000 contracts below the record all-time high and therefore the market probably retains speculative buying capacity.

Gold positioning in the Commitments of Traders for the week ending February 11th showed Managed Money traders are net-long 229,369 contracts after net buying 17,876 contracts. Non-Commercial & Non-Reportable traders are net-long 358,274 contracts after net buying 13,486 contracts.

While the silver market looks to follow gold higher today it is held back slightly by a number of negative physical commodity market demand forecasts which have predicted lower industrial commodity prices directly ahead but a long sustained recovery in industrial prices later on once the virus is contained.

Silver positioning in the Commitments of Traders for the week ending February 11th showed Managed Money traders reduced their net long position by 829 contracts to a net long 56,011 contracts. Non-Commercial & Non-Reportable traders net bought 782 contracts and are now net long 93,514 contracts.

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Pete Thomas and Peter Grant of Zaner Metals discuss the #preciousmetals market for the week ended Feb 14, 2020.

They discuss gold, silver, palladium, rhodium and copper and how these markets have been impacted by the coronavirus crisis.

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 participants and not those of Zaner Financial Services LLC, unless otherwise expressly noted.

The gold trade was clearly expecting a replication and perhaps an acceleration of the startling jump in the previous day's infection count in China. Gold and silver are capped by widespread expectations for the Chinese government to unleash massive stimulus which in turn is keeping the trade from factoring in a sharp increase in economic uncertainty.

It should be noted that some traders think gold is catching its primary lift because of the massive stimulus efforts of the central banks with the safe-haven theme a secondary force.

In minimally supportive overnight developments the Indian gold jewelry industry is soliciting the government to reduce the import duty on gold and gold ETFs saw the 17th straight day of inflows.

In another potentially supportive longer-term story Gold Fields has apparently decided not to divest itself of its only remaining South African mining asset because of a sudden improvement in performance at their last mine.

While risk-off psychology is in place early today we suspect it will regain momentum in the afternoon in preparation for the next Chinese infection count after the close today. We suspect the gold trade will see increased speculative buying late today by those looking to position for 3 days of market closure and the potential for something surprising to happen in that period.

Given the potential for significant volatility, traders should consider the purchase of gold futures and the purchase of a March (11 days until expiration but that also cheapens the premium cost) at the money put. An alternative for those expecting the worsening virus case is the purchase of a Silver $18.10/$17.60 March bull call spread.

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China announced a rather disturbing 254 additional deaths and 15,152 new infections on Thursday. While this was reportedly the result of a new way of counting cases, the market still swung to a more risk-averse footing, lifting both gold and the dollar.

As of this writing, and based on the Johns Hopkins CSSE site, the total number of cases stands at 60,370. Of those, 59,832 (99.1%) are confined to mainland China. The death toll stands at 1,371. Of those, 1,310 (95.6%) occurred in the PRC.

The Military Times reported earlier in the week that the U.S. military is preparing for a coronavirus pandemic. An executive order was issued by the Joint Staff this month, directing Northern Command to initiate pandemic plans.

[I]n no way “does the planning indicate a greater likelihood of an event developing. As military professionals, planning for a range of contingencies is something we owe the American people.” – Navy Lt. Cmdr. Mike Hatfield

Silver seemed to take on at least a little of its safe-haven persona today, rising 14¢ (+0.8%). However, at this point, the high for the week at 17.84 remains protected.

I'm somewhat encouraged by silver's ability to hold above the 100-day SMA on a close basis. However, at this point, the white metal remains well contained within the recent range. I think a rebound above $18 is needed to encourage renewed buying interest.

The Silver Institute highlighted a "notable improvement in investor sentiment in 2019." They remain optimistic for 2020, projecting a 13% rise in the annual average price to a six-year high of $18.40.

Certainly the Q3 rise last year to the 19.65 high in September was a lot of fun, but silver is very much a "what have you done for me lately market."

Action since that three-year high has been corrective to consolidative. When you zoom out to a monthly chart, you can see how inconsequential recent price action in the grand scheme of things.

Spot Silver Monthly Chart

Within that bigger picture, I'd really like to see a 20-handle to add further credence to the bottoming scenario. Such a move would put the 2016 high at 21.14 in play. If that level ultimately gives way as well, I'd be looking to the 27.45 retracement level.

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 Financial Services LLC, unless otherwise expressly noted.

However, seeing the death rate jump sharply is not directly impacted by measurement criterion and serves to recapture international attention. The reported jump in cases on Wednesday alone was pegged at 14,840 with Chinese officials indicating that quicker computerized CT scans would allow them to speed up the process of determining who is infected.

Previously infection tests took up to 2 days to register results thereby forcing the government to maintain surveillance over more people than necessary. Therefore a measure of uncertainty has been rekindled with the trade likely to price in sharp infection spread rates again later today. It does appear as if China has some form of end of day count that looks to be released in the late afternoon (US trading hours).

Not surprisingly gold ETF holdings increased yesterday for the 16th straight session with year today purchases approaching 2 million ounces. Silver ETF's also added 1.1 million ounces bringing net purchases this year 24.3 million ounces. However it should be noted that the interest in gold and silver ETFs have not received much coverage in the financial press, but overnight analysts made note of the fact that money has continued to flow into the risk-off instruments despite new all-time record highs in equities!

Adding into the sudden bullish shift in market conditions for gold and silver is the fact that the dollar has weakened this morning despite the return to safe-haven interest. In fact, the dollar could provide more specific lift to gold in the event it falls back below 98.71.

Developments that might facilitate the dollar slide and a further gold rally would be a notably softer than expected US CPI reading and or a big jump in US initial claims.

Minimally negative overnight stories flowed from Gold Fields as they recorded a 2019 production gain of nearly 8%, they projected a 40,000 ounce 2020 production gain over 2019 and then they announced they would spend $252 million to start a new gold mine in Chile.

Yet another minor negative that might be limiting of the upward bias is news that South African December gold production broke a five-month streak of gold declines with a 24% monthly gain.

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In fact, the World Health Organization chief overnight indicated the world needs to "wake up and consider this virus as public enemy number one".

Unfortunately for the bull camp, overnight press coverage from China has predicted a noted slump in Chinese gold jewelry demand. While the gold market doesn't appear to be benefiting from economic uncertainty news this week, eurozone industrial production for December released this morning declined by a large 4.1% relative to year-ago levels and the trade was presented with the lowest JOLTS reading in 2 years yesterday and therefore macroeconomic uncertainty will likely remain in the equation until it is clear that global infections from the virus are slowing to a trickle.

Fortunately for gold bulls, the dollar remains near yesterday's lows and would appear to be vulnerable to additional weakness this morning.

Cushioning the gold market is news that gold ETF holdings expanded for the 15th straight day with this year's to date purchases 1.89 million ounces. Silver ETFs also added 143,780 ounces of silver bringing their net purchases up to 3.2 million ounces for the year.

As we were quoted on Bloomberg on Tuesday, we expect the $30 rally in gold from last week's low to be removed as the trade moves to factor in a downshift in the coronavirus crisis.

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Interestingly, the dollar and gold have been pretty tightly correlated over the past week as both are being viewed as safe-havens during the coronavirus crisis. The greenback set a new 17-week high today before it too came under pressure.

While the coronavirus continues to spread in China, infections outside the PRC remain limited. Investors are finding encouragement in that reality, creating a risk-on environment, yet gold remains fairly buoyant.

Risk appetite got an additional boost from Fed Chair Powell, who told the House Financial Services Committee that the economy is in a "very good place."

"There's no reason why the expansion can't continue. There is nothing about this expansion that is unstable or unsustainable." – Fed Chair Jerome Powell

A message like that suggests the central bank is unlikely to ease any time soon, which should keep the dollar underpinned. However, that could turn on a dime if the spread of the coronavirus accelerates and/or global growth risks intensify.

That may explain why we're seeing stocks at or near record highs and gold is less than 3% off the cycle high set on January 8th at 1611.41. ETF gold holding expanded yesterday for a 14th consecutive session, suggesting investors are smartly hedging their bets with some gold.

However, Mr. Powell also warned about somethings he sees as unsustainable; namely the $23 trillion national debt and $1 trillion deficits. We touched on this topic in yesterday's post. This too is a good reason to be a gold buyer!

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 Financial Services LLC, unless otherwise expressly noted.

While the economic damage done to the Chinese economy continues to unfold, the markets didn't seem to fully embrace that news with the market seemingly more focused on the possible slowing threat to the global economy. Therefore reports of Chinese factories reopening are undermining of gold but perhaps not cause for a wholesale washout in prices.

On the other hand, the gold market into yesterday's high had interjected nearly $30 into prices off of the escalation of virus fears from last week. Therefore it would not be surprising to see that premium removed in the coming sessions. In fact, while the dollar has retrenched from its latest new high for the move early this morning it probably remains a bearish force for gold going forward.

A development that might undermine the long term bull case in gold came from the Russian central bank overnight with the bank slowing its gold purchasing patterns and acknowledging a desire to be cognizant of the prices paid for adding reserves.

A higher close in Hong Kong gold and Reuter's reports from Harmony Gold suggesting unreliability of South African electricity and very high electric costs is an ongoing problem for their production should provide some minimal amount of support for prices today.

Another very minimally supportive development is news that gold ETFs saw their holdings increase for the 14th straight session yesterday with this year's net purchases now seen at 1.71 million ounces.

Without a reversal in equities and/or in the guardedly optimistic virus headlines from China, we see a possible slide back to $1550 in April gold.

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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 Financial Services LLC, unless otherwise expressly noted.

Gold continues to be buoyed by coronavirus inspired safe-haven interest. And surprisingly, the yellow metal may also be garnering support from rising inflation in China.

One of the headwinds that have limited the upside in gold in recent weeks is the expectation that weak Chinese demand was going to have a deflationary impact on the global economy. Today the data showed inflation continues to heat up.

China’s consumer price index rose 5.4% in January, versus +4.5% in December. That's up from 3.8% in October and 3.0% in September.

With much of the country hunkered down in an effort to prevent the spread of the virus, China is seeing significant supply chain disruptions. This is driving up the prices of available goods.

Food prices were up sharply again in January, surging 20.6% YoY, versus 17.4% in December. Pork prices alone were up a whopping 116% as Asia continues to deal with the swine flu as well.

As you might imagine, the one-week extension of the Lunar New Year holiday and perhaps some reluctance of transport workers to travel into cities has the potential to lead to food shortages and indeed higher prices. Persistent food price inflation creates the risk of political unrest, so I'm sure Beijing is closely monitoring the situation.

The dollar is also catching some haven flows, setting fresh 17-week highs. However, gold seems to be largely ignoring the strength in the greenback, providing evidence that the underlying uptrend in the yellow metal remains intact.

President Trump presented a massive $4.89 trillion budget to Congress today. While there is little chance it will be passed in its present form, it should bring to mind deficits in excess of $1 trillion that will likely be seen moving forward.

Mounting debt and deficits have been largely ignored by U.S. markets in recent years. With the debt ceiling suspended until after the presidential election, that is likely to continue. However, it does create some pressure on the Fed to keep rates low.

Overall, I like the way gold has been performing since the cycle high was set about a month ago just above $1600. Continue to look for buying opportunities on dips into the lower third of the range.

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 Financial Services LLC, unless otherwise expressly noted.

On the other hand, the gold market probably drafted some fresh speculative buying following comments from the World Health Organization suggesting there will be more cases beyond China and a possible spread from Singapore. The World Health Organization official also indicated "we may only be seeing the tip of the iceberg" and that certainly sparked some safe-haven buying.

However gold is probably drafting lift from the latest Chinese easing move and from news that Chinese consumer prices for January came in much hotter than expected. Chinese consumer prices climbed by 5.4% (on a year-over-year basis) and that was the largest jump since November 2011. It should be noted that sharply rising food prices were the primary catalyst behind the jump in prices. Pork a major staple necessary to keep citizens happy showed a 116% jump in December and added 2.7% to the overall inflation rate. Therefore gold is apparently cheered by news that deflation is not totally gripping the Chinese market.

It also seems as if news that some workers are being allowed to return to their jobs helps to diffuse concerns that Chinese physical/jewelry demand might not come to a screeching halt. In fact, the government seems to be allowing factories to return as long as they meet criterion including protective gear for all workers, setting procedures for temperature checks, quarantining nonlocal workers and doing periodic disinfection.

ETFs increased their gold holdings on Friday for the 13th straight session which puts the holdings at the highest level since roughly one year ago. Unfortunately for the bull camp the gold market continues to hold a large spec and fund long positioning and with the April gold contract this morning trading $22 an ounce above the level where the COT report was measured.

Therefore we suspect gold spec long positioning is tracking back toward all-time highs! The February 4th Commitments of Traders report showed Gold Managed Money traders are net-long 211,493 contracts after net selling 46,141 contracts. Non-Commercial & Non-Reportable traders net sold 41,311 contracts and are now net long 344,788 contracts.

With silver losing roughly 60 cents from the first headlines on the virus in mid-January any true sign of a slowing of the spread could vault March silver quickly back above $18.10 especially if gold can continue to claw higher in the face of news that some infection spread control might be taking place. The Commitments of Traders report for the week ending February 4th showed Silver Managed Money traders are net-long 56,840 contracts after net buying 7,878 contracts. Non-Commercial & Non-Reportable traders were net long 92,732 contracts after increasing their already long position by 2,867 contracts.

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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 Financial Services LLC, unless otherwise expressly noted.

Pete Thomas and Peter Grant of Zaner Metals discuss the metals market for the week ended February 7, 2020.

Hot topics: Continued resilience of gold. Volatility in silver likely to continue. Palladium rebounds but fades on Friday. More record highs in rhodium. Copper finds some support.

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 participants and not those of Zaner Financial Services LLC, unless otherwise expressly noted.

On one hand, the April gold contract has forged a 3 day high early and appears to be leaning in favor of the bull track, but ongoing new high for the move action in the dollar is probably limiting early gains.

We suspect that the focus of the gold trade will shift to the US nonfarm payroll results before shifting back toward the potential developments in China over the weekend in the afternoon trade.

Expectations for today's US nonfarm payroll reading call for a gain of around 160,000 and a reading at or above that level would likely cause some temporary selling of gold. However, there have been some analysts warning that the payroll reading today could come in softer than expected due to production changes at Boeing.

Overnight gold ETFs added to holdings for 12th straight session bringing net purchases this year to 1.65 million ounces. Silver ETFs also added to their holdings bringing this year's net purchases to 2.61 million ounces.

In the end, we give the bulls an edge with a critical pivot point at $1576 potentially setting the tone for the rest of the Friday trade.

Traders might consider being long gold and short silver as a strategy to play for renewed safe-haven buying, with the short's silver component possibly protecting the long gold position against any return to the deflationary/slowing physical demand environment from earlier in the week.

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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 Financial Services LLC, unless otherwise expressly noted.

Gold closed back above the 20-day SMA, but we're still watching the 1570.49 retracement level (50% of this week's decline). That level also corresponds pretty closely with the 9-day SMA.

We'll see if Friday's U.S. jobs report triggers such a move. It would likely take a pretty significant miss on the headline nonfarm payrolls number to return credence to the underlying uptrend and push gold back into the upper half of the recent range.

Median expectations for nonfarm payrolls are +163k and the jobless rate is expected to hold steady at 3.5%. In light of the significant ADP beat earlier in the week, I would suggest the odds are better for an NFP beat as well.

Risk to the downside is back to the 14-Jan low at 1535.94. Today's low at 1552.48 and Wednesday's low at 1547.51 provide good intervening barriers.

Silver had a decent day, climbing 19¢ (1.1%), but remains confined to the recent range. The white metal can't seem to decide whether it's a haven asset or an industrial metal and consequently choppy trading is likely to prevail.

While I still consider the underlying trend to be bullish, I'd be feeling better with a close back above $18.00. On the downside, last week's low at 17.38 is an important support. A breach of this level – particularly on a close basis – would favor a return to the next tier of consolidation centered on the $17.00 level.

The inability of the gold/silver ratio to sustain the recent return to the 90.00 level bolsters the bullish scenario for silver somewhat. On bullish breakouts, I like to see silver leading the charge.

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 Financial Services LLC, unless otherwise expressly noted.

Fortunately for the gold bulls, China overnight announced a 50% tariff reduction on US imports and that might be seen as another move to underpin their economy. However, another contingent in the marketplace thinks the virus is pushing several global central banks toward fresh easing, which would ultimately benefit gold.

Overnight gold prices in India remained under pressure for the 3rd straight day, with buyers remaining ultra-price sensitive and perhaps a little leery of making purchases in the face of the recent massive decline in Indian gold demand figures.

Gold ETF holdings yesterday increased for the 11th straight day bringing this year's net purchases to 1.54 million ounces.

While we respect the market's capacity to bounce from what appears to be credible chart support at $1550 the threat of plummeting Chinese physical demand might require a dramatic worsening of the virus threat to fully rekindle safe-haven buying and launch prices back up to the $1600 level.

On the other hand, we detect a slight building of speculative fatigue in gold off the virus storyline and that might be confirmed by the steady decline in trading volume and open interest over the past 2 weeks.

An added pressure on gold is another upside breakout in the dollar which has risen above its 200-day moving average in a fashion that seems to point to a "trend".

Using a trading range style short term strategy might allow for April gold to claw back to the middle of the consolidation up at $1576. In the end, we think the longs have more risk than the shorts and we would suggest that longs bank profits and reverse positions before the Friday morning payroll release.

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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 Financial Services LLC, unless otherwise expressly noted.

Friday's U.S. jobs report is the next big data drop. Median expectations for nonfarm payrolls are +163k and the jobless rate is expected to hold steady at 3.5%. However, Wednesday's much better than expected +291k ADP survey print (median +156k) suggests there may be potential for an upside surprise on the jobs front.

Favorable U.S. data are likely to keep risk appetite elevated, which could keep gold and other haven assets on the defensive. Markets have been increasingly inclined to discount coronavirus concerns, seeing it as a crisis largely confined to China.

As of this writing, the total confirmed cases stands at 28,009, with 27,767 (99.1%) in the PRC. The death toll stands at 564. Understandably these numbers have allowed investors elsewhere in the world to shift their attention back to underlying fundamentals.

While commodities have seen some relief this week, Chinese demand is hugely important. It will likely take some more positive news out of China on the coronavirus to trigger more substantial retracement of the recent losses.

Chinese gold jewelry demand was already on the ropes, reaching a 7-year low last year. Further contraction was expected this year, even before the coronavirus outbreak. That the crisis happened right as the Lunar New Year celebration kicked-off has been offsetting haven interest in the yellow metal.

A rebound above 1570.49 is needed to ease short term pressure on the downside and return a measure of credence to the underlying uptrend. On the downside, we continue to watch supports at 1546.31 and 1535.94.

Silver was narrowly confined, while platinum rebounded to new highs for the week. Palladium recovered to pressure $2500 for the first time in 2-weeks. Rhodium notched yet another record high at $10.775. Palladium and rhodium still look like they have further upside potential.

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 Financial Services LLC, unless otherwise expressly noted.

In fact, some are pointing out that Chinese physical gold demand was already trending downward with gold jewelry consumption last year reaching a 7 year low. While an analyst overnight has projected China's gold jewelry demand this year would drop by 6% we assume that decline will be much larger because of the virus and could be significantly larger in the event the virus threat leaves large areas of containment in China in place for weeks.

Certainly, the bull camp will see some support from news that gold ETF holdings increased for the 10th straight session and from the fact that prices have now returned to the vicinity of what has been fairly credible consolidation support around the $1550 level.

On the other hand, given the negative charts, it is even more important to realize the net spec and fund long position in gold was probably closing in on the record of long of 402,000 contracts and therefore technical stop-loss selling potential should not be understated going forward.

With economic information from parts of Europe and the UK overnight showing positive readings and this week's US scheduled data pattern also showing positive results, non-Chinese economic uncertainty is expected to decline further. Therefore the bias in gold is down with initial support levels seen at $1550, $1547.40 and then again down at $1542.80.

In silver support is seen at $17.46 and $17.42.

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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 Financial Services LLC, unless otherwise expressly noted.

With the return of risk appetite, we saw movement out of gold and back into stocks. The yellow metal fell to new 1-week lows, resulting in an outside week and pretty significant divergence in the RSI on the weekly chart.

The technical setup is pretty negative at this point, but market focus could easily swing back to the coronavirus, reinvigorating haven interest. The next supports to watch at 1546.31 and 1535.94. A rebound above 1575.00 would ease short term pressure on the downside.

Silver closed lower, back at the 50- and 100-day SMAs. Silver still looks vulnerable, but the downside was limited by perhaps some tapering of growth risk concerns.

Platinum closed higher after failing to sustain intraday losses below the 9-day SMA. Palladium on the other hand surged back above 2400.00, notching nearly a 5% gain and a second consecutive higher close.

Even copper finally broke its 10-day losing streak, mounting a 1.6% rally. While the critical 2.50 level has held on a close basis, I don’t think the red metal is out of the woods yet.

Rhodium continues to ignore all external influences, establishing yet another new record high of 10,700 based on the Johnson Matthey New York base price.

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 Financial Services LLC, unless otherwise expressly noted.

On the other hand, given fresh damage on the charts, ongoing strength in the dollar, definitive global risk-on flows into equities and speculation that Indian gold imports in January will fall by 48% over year-ago levels provides a pretty bearish cocktail for gold prices to start today. Furthermore, the gold market closed lower in Hong Kong and the charts in the April gold contract have suffered fresh damage early on.

However gold could garner some very minimal support from news that gold ETF's raised their holdings for the 9th straight session pushing this year's net purchases up to 1.29 million ounces and to the highest level in over 12 months. According to one measure global holdings of gold bullion-backed ETFs have now reached 2537.9 tons which surpasses the previous all-time record high holdings achieved back in 2012.

Another supportive issue that looks to be discounted by the trade today is a report from the Congo that their gold production last year fell 5.7% on a total of 34,657 kg.

While Chinese December gold imports from Hong Kong jumped in December that should be considered "old news". In fact with a sustained contraction in January and February gold imports highly likely and substantial it could be impossible for Chinese gold imports to remain near 1,000 tons. In fact, for most of the last 6 years, Chinese gold demand has held below 1,000 tonnes but a sustained idling of the Chinese economy could bring 2020 imports down to the lowest level since 2012 with a net reduction in the neighborhood of 150 tonnes!

Unfortunately for the bull camp, the latest net spec and fund long positioning in gold was relatively close to the all-time record long (within 23,000 contracts) and therefore the market has used a lot of fuel to get to and remain near the $1,600 mark. Since the last positioning report into the high on Monday, April gold managed a further rally of $25, thereby increasing the odds that the spec long might have reached a new record.

In conclusion, without a major economic meltdown from a noted breakout of the virus from quarantined areas, the bear camp is likely to control on a softening physical demand argument.

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However, it does appear as if a quasi-side deflationary vibe has settled into many physical commodities perhaps because comments from Citibank suggesting the Chinese virus will have a "very deep" impact on commodities. Not surprisingly analysts are predicting a steep decline in Chinese demand for "physical" gold because of the disruption of the economy.

With one estimate suggesting Chinese oil demand has fallen by 20% since the virus outbreak, it is clear that the amount of lost demand for certain physical commodities will indeed be very significant. Overnight an analyst indicated Chinese gold demand during the outbreak of the SARS virus fell off by 32% versus the prior quarter and with Chinese 2019 gold demand 4 times as large as 2003 Chinese gold demand the potential negative impact on global gold prices is very large.

The January 28th Commitments of Traders report showed Gold Managed Money traders were net long 257,634 contracts after decreasing their long position by 1,556 contracts. Non-Commercial & Non-Reportable traders were net long 386,099 contracts after increasing their already long position by 8,574 contracts.

The January 28th Commitments of Traders report showed Silver Managed Money traders are net-long 48,962 contracts after net selling 9,104 contracts. Non-Commercial & Non-Reportable traders are net-long 89,865 contracts after net selling 6,386 contracts.

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Pete Thomas and Peter Grant of Zaner Metals discuss the metals market for the week ended Jan 31, 2020.

Hot topics: The resilience of gold. Volatility in silver. Plunge in copper. Fresh record highs in rhodium.

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 participants and not those of Zaner Financial Services LLC, unless otherwise expressly noted.

However recent chart action has been supportive and the market has shown signs of shaking off morning weakness and clawing higher in the afternoon trades. In a sign of rising speculative bullish interest gold ETFs saw their holdings increase for the 7th straight day yesterday bringing this year's net purchases up to 1.19 million ounces. It should be noted that total gold holdings by ETFs are now at the highest levels in 12 months with gold holdings last year thought to be poised to make more new record high holdings this year.

As for the virus, situation cases continue to show up sporadically around the globe and the death toll has climbed above 200 but the markets are not concerned about the global health threat. In fact, we would suggest the containment efforts outside of China are seemingly slowing the spread to a very manageable level and the incubation/transmission window could be mostly closed one week from today. However, as we will continue to suggest the major uncertainty thrown off from the virus is what is taking place in the Chinese economy with images of major thoroughfares, train stations public spaces like shopping centers and parks completely empty.

While China released a surprisingly upbeat nonmanufacturing PMI reading for January, economists are quickly discounting that reading as a "pre-virus" reading. In short, expect choppy two-sided trade with the likelihood of a grind higher and potentially a re-test of $1594.70 with even higher prices possible if equities show increased concern and the S&P falls below 3260.00.

The biggest threat to the bull camp would be any fresh soothing commentary from World Health Organization officials regarding progress toward global containment or maybe even the slowing of the spread of the virus inside China but that is unlikely considering that the WHO provided a statement yesterday.

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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 Financial Services LLC, unless otherwise expressly noted.

The World Health Organization (WHO) declared the Wuhan coronavirus a "public health emergency of international concern." Who also recommended that the interim name of the disease be “2019-nCoV acute respiratory disease” and gave a hashtag of #2019nCoV.

Silver seemed to reclaimed the safe-haven mantel today. The white metal continued to rebound and at one point had retraced nearly all of Tuesday's 3% decline, but faded into the close. Silver managed a close back above the 9-day SMA. The gold/silver ratio tumbled more than 2% intraday, closing 1.6% lower.

Silver is far from being out of the woods, but today's price action gives the bulls renewed hope. The white metal has a range of nearly $1 this week and I suspect short-term volatility to remain elevated. Is it an industrial metal or a safe-haven? Apparently it depends on the day.

Copper got hammered again today, suggesting that Chinese and global growth risks remain a major concern. The red metal retested the 2.5135 low from 01-Oct, which is the last significant barrier ahead of the 2019 low at 2.4795.

Platinum hit a 3-week low before rebounding into the close. Palladium was relatively calm, forming a second consecutive inside day.

Rhodium notched a Johnson Matthey New York base price of $10,100. That ties the previous all-time high base price from June 2008.

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 Financial Services LLC, unless otherwise expressly noted.

Even the Japanese Prime Minister indicated they are watching the impact on their tourism, while the head of the Bank of Japan has suggested the virus fallout will likely be bigger than the SARS outbreak. Therefore safe-haven interest in gold should result in April gold returning to and above $1600 especially in the event that equities fully lose their capacity to discount the spread of the virus outside China.

Adding further into the bull case for gold is the fact that the US Fed remains "troubled" with the current inflation rate. In other words, the Fed might be incentivized to take action preemptively against any headwinds from the virus, simply to protect against even more trouble from low inflation.

While a significant jump in Hong Kong December gold exports to mainland China in December could be the result of a variety of political issues, it is difficult not to see that development as supportive of gold. In fact, December Hong Kong gold exports to China jumped to 46.6 tons versus only 5.5 tons in November. Keep in mind, China several years ago added Beijing and Shanghai as import cities perhaps seeing the vulnerability to a single import outlet in troubled Hong Kong. We also think China decided to diversify its gold entry points in an effort to mask its central bank gold buying patterns.

Holding back the gold market this morning is a private service report this morning indicating Indian gold demand fell by 35% in the 2nd half on a year-over-year basis with that report indicating a precipitous decline in the 3rd quarter alone. While we don't believe analyst projects the infection rate in China might be 200,000, the amount of virus infections from the coronavirus has already exceeded that of the SARS outbreak.

Furthermore, the virus could not have arrived at a more dangerous period of the year as the massive 300 million-migration normally seen during the Chinese New Year produced a perfect environment to spread the virus to every corner of the country and perhaps throughout Southeast Asia. In our opinion, the virus will expand, seriously impede Chinese growth and might only be halted quickly by a vaccine breakthrough.

In conclusion, gold will probably see safe-haven interest hold the edge over the nagging threats of deflation and slowing physical demand. Traders holding long gold positions should stay long, but consider protecting against wild volatility with the purchase of long puts.

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The U.S. central bank held the Fed funds rate steady in the 1.50% to 1.75% range. They reiterated that the Fed would "continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures."

While there was no specific mention of the coronavirus in the policy statement, Fed Chairman Powell acknowledged during the press conference that "there is likely to be some disruption to activity in China and possible globally."

Uncertainty surrounding the Wuhan coronavirus remains elevated and hence continues to impact the market. As of Jan 29, 2020 2:30 pm EST, there are 6,165 confirmed cases of the virus. Of those, 95 are outside of the PRC. The number of deaths stands at 133.

Global growth worries continue to provide some safe-haven related support to gold. The yellow metal traded below the 9-day SMA intraday, but the 20-day was left protected. The strong close offers some encouragement to the bulls.

Silver slipped to a new 5-week low in overseas trading but then was able to reclaim both the 50- and 100-day SMAs on the close. That by no means takes the pressure off of silver, which has been trading more like an industrial metal this week.

Strength in the gold/silver ratio reflects the comparative weakness in the silver market. The ratio surged to a more than 6-month high above 90 this week. Most of those gains came on Tuesday, but the ratio remained well bid on Wednesday.

Palladium rebounded modestly, but remain confined to yesterday's range. Nornickel, the world's largest palladium miner, recognizes that much of the recent record gains have been driven by speculation.

In an effort to ease some of that upside pressure, Nornickel indicated that they would generate more bars at the expense of the Pd powder used by industry. I'm not sure how much impact this will have in reality. They're basically robbing Peter to pay Paul in a market that already has a fundamental supply deficit.

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 Financial Services LLC, unless otherwise expressly noted.

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The number of confirmed cases now stands at 4,690. That's up considerably from the 2,886 cases reported yesterday. However, only 80 confirmed cases have been reported outside of the PRC. That number continues to rise, but the indication that the virus has been largely contained to mainland China has revived the market's appetite for risk.

While U.S. health officials have reportedly fast-tracked a vaccine, it may still be a number of months before it's ready for clinical trials. Nonetheless, the market may have garnered some optimism from that news, allowing the focus to shift back to generally upbeat earnings reports.

Gold is likely to continue fluctuating in the short-term based on the level of concern about the Wuhan coronavirus. However, the underlying trend is still seen as positive, despite the lower closes seen over the last two sessions.

According to Wood Mackenzie, a research and consultancy firm with expertise in the natural resource space, gold is poised to perform strongly in 2020, with geopolitical risk set to remain elevated.

"The volatility of 2019 provides us with a good gauge as to how the gold price could respond to a more significant de-escalation in the trade war. What we can be sure of is that any further trade talks will likely be shrouded in uncertainty, with gold set to fluctuate accordingly." – Rory Townsend, Wood Mackenzie Head of Gold

I'm inclined to agree. As discussions between the U.S. and China move on to a Phase 2 deal, the negotiations are likely to be every bit as contentious as those that ultimately led to the Phase 1 deal.

Silver shrugged off recent safe-haven buying, succumbing instead to the global growth risks that are pressuring the broader commodities complex. The white metal tumbled more than 3% on Tuesday, taking out nearby supports to set a 4-week low.

Spot Silver Daily Chart

Silver appears poised to close below the 100-day SMA at 17.90 and the 50-day is close at hand as well (17.47). The 61.8% retracement level of the rally from the early-December low at 16.52 to the early-January high at 18.86 comes in at 17.41.

Platinum and palladium remained under corrective pressure as well amid virus-driven demand concerns. Rhodium remains resilient and is "trading to illiquidity, not to fundamentals..." according to a London trader.

The Johnson Matthey base price for Rh has been locked at an 11-year high of $9,985 for nearly a week, just below the all-time high base price of $10,100 from June of 2008.

On Wednesday, the Fed's 2-day FOMC meeting wraps up. Policy is expected to remain steady as the "dovish pause" continues. The market will be looking for any indication of potential further accommodations in light of mounting growth risks.

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 Financial Services LLC, unless otherwise expressly noted.

On the other hand, despite the inability to hold all the gains forged yesterday, the April gold contract did manage to post the highest close since 2013! While the gold market is probably drafting residual support from the rapid expansion of infections inside China, it appears as if fear of a global problem from the virus is falling which in turn is probably dampening interest in gold.

Another limiting force for gold prices came from news overnight that Russian gold producer Polyus which announced a 2019 gold production increase of 16% over 2018 with their 4th quarter production up 26%. Total gold production from Polyus was 2.9 million ounces which makes the increase somewhat material to the global gold market.

Another minimal negative for gold prices was news yesterday from a Barrick Gold mine which showed its 2019 production to have exceeded initial guidance by 64,000 ounces. Yet another minimal negative for gold overnight came from news that the world's largest gold ETF trust saw a decline of 37,653 ounces yesterday. However, offsetting the outflow from SPDR Gold were larger inflows from 2 other ETFs which left a net purchase by ETFs on Monday of 10,292 ounces.

It should also be noted that silver ETFs added 6.22 million ounces to their holdings Monday and that was the biggest one day increase since August 14th of 2019.

While the gold market looks to remain underpinned from the potential global threat from the virus, without signs of an acceleration of infections outside of China, the golf market could be vulnerable especially with the dollar overnight forging another higher high for the move.

The charts in the silver market also look bearish with the market overnight temporarily slipping below the psychological $18.00 level and silver showing signs of concern for slumping physical demand in the event the global economy slows from reduced travel and consumer anxiety.

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While the trajectory moderated somewhat today, the trend is still a disturbing one. This is likely to remain the major market-moving story for some time to come.

Global shares and commodities were under considerable pressure today, driving investors to safe-haven assets. Airline stocks were particularly hard hit amid worries that international – and even domestic – travel will be adversely affected as the virus crisis plays out.

Major U.S. companies, including Disney, McDonald’s, and Starbucks are suspending operations in China and instituting travel restrictions. A number of major international automakers have closed plants and some are withdrawing employees.

These companies will take considerable revenue hits and the employees – particularly those in China – are likely to hunker down and spend less as long as the virus continues to spread.

Lunar New Year celebrations in China typically extend until the Lantern Festival (February 15), but restricted travel, potentially lower wages and the desire to steer clear of crowds may limit holiday-related gold purchases.

While this may be counterbalancing haven buying of gold to some degree, the technical picture has improved considerably as a result of today's gains. More than 61.8% of the post-Iranian-missile-attack drop has now been retraced. This returns considerable confidence to the underlying uptrend, retargeting the 1611.47 high from January 8.

As an example of commodity pressure, one need look no further than the copper chart. The red metal lost another 3% today and is now off more than 10% from the 9-month high set 2-weeks ago at 2.8840. Next support 2.5661.

Spot Copper Daily Chart

Silver displayed more of a safe-haven shine in early trading today, also setting 2-week highs. However, the white metal was not able to sustain those gains amid rising concerns about industrial demand.

The PGMs were under pressure today for the same reason. The one exception being rhodium, which was fixed at 9985 (JM) for a fourth straight session, just shy of the all-time high fix at 10,100.

As I said, the coronavirus will remain the lead story, but the Fed begins their 2-day FOMC meeting tomorrow. Steady policy is expected, but as always, analysts will try and read between the lines in the policy statement for any clues about potentially easier policy down the road.

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 Financial Services LLC, unless otherwise expressly noted.

With the gold market this morning sitting only $33 above the level where the initial outbreak news was released, we think the market has significant buying capacity left in reserve. However, the most recent spec and fund long in the gold market sat within striking distance of all-time spec high long positioning of 401,611 contracts from September of last year and that could ultimately limit the upside!

On the other hand, in the event the virus spreads faster and is found to be more than virulent than expected, we suspect gold will see significantly more net longs enter the market and a new record long will be posted in the next COT report.

Restricting the gold market on the upside is the potential for the US dollar to reach up to the highest levels since early October but the impact of currency market action on gold hasn't been as significant as was seen at times in the past. While we doubt the gold market will take direction from classic supply and demand fundamentals early this week, a Chinese news agency recently indicated increased gold trading activity took place on Chinese gold futures markets last year and that could add to the initial upward bias.

Given the flight to quality focus of the markets early today softer than expected German business survey readings overnight might only add minimally to the bull case. In fact, given conditions in the market, we suspect that anything favorable from US new home sales will be ignored and won't discourage safe-haven buying.

We see critical pivot point support in April gold at $1,574.80 with initial targeting levels in the coming 48 hours of $1595.30, $1,619.60 and $1,626.90.

The Commitments of Traders report for the week ending January 21st showed Gold Managed Money traders net sold 3,145 contracts and are now net long 259,190 contracts. Non-Commercial & Non-Reportable traders added 4,727 contracts to their already long position and are now net long 377,525.

Like the gold market, the silver market closed very strong at the end of last week and has extended significantly this morning and that suggests silver has shed its industrial focus and is benefiting from safe-haven conditions. While not near a record spec and fund long positioning last week silver is likely to return to its record spec long with a couple days of noted upside action this week.

The Commitments of Traders report for the week ending January 21st showed Silver Managed Money traders reduced their net long position by 374 contracts to a net long 58,066 contracts. Non-Commercial & Non-Reportable traders net bought 1,990 contracts and are now net long 96,251 contracts.

Critical support in March silver today is seen at $18.18 with resistance/target levels seen at $18.47 and $18.55.

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Pete Thomas and Peter Grant of Zaner Metals discuss the metals market for the week ended January 24, 2020.

We discuss the impact the corona virus is having on both the industrial and precious metals.

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 Financial Services LLC, unless otherwise expressly noted.

However, it is possible that an upside breakout in the dollar to the highest level since early December is beginning to distract traders away from the potential uncertainty flowing from the virus and that should be concerning for the bulls.

Yesterday gold ETFs saw an inflow of 156,276 ounces bringing net purchases this year up to 526,487 ounces. Furthermore, a Japanese concern overnight indicated gold funds saw the biggest weekly inflows in 17 weeks.

In retrospect it seemed like the virus situation was prodding bulls back into long positions yesterday afternoon and if that situation is seen again today and a fresh 10 day high is forged on the charts that could spark a modest upside extension from classic short covering (stop loss) buying. Logically it would appear to be a good assumption to suspect that a certain amount of follow-through expansion in virus cases will be seen in the short term with the Chinese only recently becoming very aggressive with restrictions on travel on public transportation systems.

Pushed into the market, we favor the bull track with the early January washout likely tempering the overbought condition from the January spike high. In other words, seeing gold correct by $75 and then forge 11 days of sideways consolidation should leave the market in a better technical position to rally.

However, traders should continue to "expect" an expansion of two-sided action with potentially expansive trading ranges and that in turn suggests the utilization of risk controlling strategies. For instance, traders looking to the long side could purchase April gold futures and purchase one or 2 puts as protection. Other strategies include the purchase of bull call spreads and or call options situated above the $1,610 strike price.

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The city of Wuhan – the epicenter of the outbreak - with a population around 11-million has essentially been blockaded with no public transportation in or out. This is occurring even as the massive Lunar New Year migration in China is fully underway. Beijing has canceled major public New Year's festivities in an effort to control the spread of the disease.

Wuhan is one of the four busiest rail hubs in China and reportedly handles more passenger volume than Beijing and Guangzhou. Not only are the people of Wuhan trapped in Wuhan, but people from the eastern cities trying to get to their family homes in the west for the New Year are likely experiencing considerable difficulties.

Freight traffic typically slows during Lunar New Year in order to accommodate the need for more passenger trains, but the broader impact on freight traffic resulting from efforts to curtail the spread of the virus is not clear at this point. Wuhan is a port along the New Silk Road, with many trains departing to Europe every week, according to RailFreight.com.

The coronavirus will almost assuredly have a significant and direct impact on the Chinese economy, but the negative influence could be further reaching. Those risks amplify the longer the crisis persists.

Commodity prices are suffering as a result. Copper, for example, was down more than 2% at one point intraday. The red metal is off more than 5% from last week's high at 2.8840 and more than 38.2% of the Phase One trade deal inspired rally has already been retraced.

Gold is being weighed by those broader deflationary concerns. While gold is a hedge against deflation, the initial reaction to such risks is bearish. The yellow metal is a component in just about every commodity index and fund. As investors dump those securities to pare commodity exposure, they are selling gold.

On the other hand, that reaction has been tempered somewhat by safe-haven demand associated with diminished risk appetite. I suspect the influence of these two competing scenarios will ebb and flow in the days ahead based on the news out of China.

Ultimately, the underlying trend in gold remains bullish. The 20-day SMA is offering support at 1551.15. If this level gives way, the low from last week at 1535.94 would be vulnerable to a retest.

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 Financial Services LLC, unless otherwise expressly noted.

While the Chinese virus situation has already become a global virus issue, economic news from Tuesday got the attention of gold following negative economic views from the Moody's credit rating agency earlier this week and the trade saw a contraction in the Chicago Fed National Activity Index and that has fostered some economic uncertainty.

Therefore the gold market is likely to take some initial direction from today's US scheduled data flow (weak data should lift prices and strong data should pressure). However, in the near term, it could be extremely difficult to determine which if any fundamental factor will be capable of driving gold prices out of the recent range and it could even be more difficult to determine which direction a specific fundamental will drive prices as the focus waffles back and forth from safe haven and fears of slowing.

For example, the initial surprise of the outbreak of the virus actually resulted in a slide in gold that appeared to be deflationary in nature. On the other hand, the technical condition seems to offer solid support and gold does not appear to be negatively impacted by gains in equities or strength in the dollar. We continue to suggest those looking to be long gold consider the purchase of put protection for those positions.

Given the intense media coverage of the virus, it wasn't surprising to see Gold ETFs yesterday add 124,130 ounces to their holdings bringing this year's net purchases up to 370,211 ounces. Clearly many ETF investors are seeking to hedge equity investments while others are simply attempting to capitalize on the prospect of a pandemic.

Unfortunately for silver bulls, ETF holdings were reduced by 485,597 ounces boosting this year's net sales to 8.68 million ounces and extending the liquidation streak to 7th day.

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Therefore it appeared as if the gold market initially adopted deflationary fear from the crisis. However, the dollar is slightly higher early today and both Hong Kong and Shanghai gold markets closed lower for the day.

On the other hand, the gold market was presented with news that gold producer Antofagasta PLC saw its 4th quarter gold production decline relative to the prior quarter.

Going forward it would appear as if the April gold contract is capable of extending its recent sideways consolidation which has been mostly above $1550 and is limited by resistance up at $1574.80.

In retrospect, long term traders should keep in mind that the May through August and the December through early January rallies seemed to be fostered by improvements in the economy and therefore the backbone of any further extension of the bull-run would seem come from conditions that foster improvements in physical demand in India and China.

The bulls might also need renewed ETF buying by smaller traders and funds.

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The Lunar New Year – frequently referred to as Chinese New Year – is this Friday and there are concerns that the Wuhan Virus will curtail people's travel plans, adversely impacting the economy. Chinese New Year is known as the world's largest human migration because a huge swath of the Chinese population travels to reunite with families for the holiday. Last year, there were nearly 3 billion trips logged in China!

The virus is also spreading and the U.S. has now recorded its first confirmed case. That patient returned from China last week and is now quarantined in a hospital in Washington state.

The impeachment trial of President Trump got underway in the Senate today. The markets don't seem to be taking much of an interest as the outcome in the Republican controlled Senate is widely believed to be pre-ordained.

Mr. Trump is in Davos Switzerland for the World Economic Forum, where he threatened once again to put tariffs on automobiles manufactured in Europe and exported to America. So while things have calmed somewhat on the Chinese trade front, things seem to be heating up between the U.S, and Europe.

Heightened trade tensions should help underpin gold and keep support marked by the 20-day SMA at 1545.84 protected. However, the inability of the yellow metal to sustain the initial overseas move to new two-week highs is disappointing.

A close below the 20-day would leave gold vulnerable to additional corrective losses to $1500 area. The post-Iran reaction low at 1535.94 from 14-Jan provides an important intervening barrier.

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 Financial Services LLC, unless otherwise expressly noted.

Increasing the potential deflationary impact of the new virus is the fact that the Chinese New Year celebrations start this coming weekend and that usually results in roughly 300 million people traveling inside China and reducing that dramatically would remove a tremendous annual stimulus for the Chinese economy.

It should be noted that initially, gold prices managed a 2 week high before reversing course and tracking lower. As in the SARS situation, traders and economists fear restrictions on travel and fear lower economic consumption because of fears of personal contact.

While not overly important in the current environment, prices could be supported by overnight news that Chinese 2019 gold production declined by 5.2% on 380.2 tons of output. However more than offsetting that potentially supportive supply-side news is the fact that Chinese 2019 consumption was down by nearly 13% on 1002.7 tons.

The market was also presented with 12% higher gold production from Highland gold in 2019 which resulted in a production tally of 300,700 ounces.

If there is a bright spot for the gold market today it is the fact that the dollar is not tracking higher like a safe haven instrument while treasury prices are showing some signs of a need for safe-haven investment.

In yet another partially supportive development, the most recent positioning report in gold showed a reduction of the net spec long in the prior week and that should help to balance the technical overbought picture somewhat in gold. The Commitments of Traders report for the week ending January 14th showed Gold Managed Money traders are net long 262,335 contracts after net selling 9,967 contracts in the week. Non-Commercial & Non-Reportable traders net sold 18,732 contracts and are now net long 372,798 contracts.

Surprisingly the silver market did not take out last Friday's low in the early action today despite global deflationary fears and some initial negative spillover from gold. The Commitments of Traders report for the week ending January 14th showed Silver Managed Money traders net sold 348 contracts and are now net long 58,440 contracts. Non-Commercial & Non-Reportable traders net sold 372 contracts and are now net long 94,261 contracts.

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The signing of the Phase One trade deal between the U.S. and China seemed to be the driving force behind risk appetite, despite its limited scope. Better than expected Chinese economic data further bolstered global sentiment and soft U.S. inflation fostered a belief that the Fed won't be hiking rates any time soon.

The market readily dismissed this week's movement on the impeachment front. Whether witnesses are called in the Senate or not, it is widely believed that President Trump will be acquitted and remain in office.

In the wake of gold's big sell-off on January 8th, which resulted in a key reversal, the downside follow-through this week was pretty limited. While the yellow metal remains below the 9-day SMA, the 20-day (1536.40) was left unmolested.

Spot Gold Daily Chart

Gold may still dip to test the 20-day, but I think the underlying trend remains favorable. I'd feel better about that assertion with a rebound above 1573.67 (50% retrace of the recent decline). At that point, I'd be looking for a retest of the recently established near-7-year high at 1611.41.

On the other hand, a close below that 20-day SMA would leave gold vulnerable back to the 1500 zone, where I think the buyers will reemerge.

The silver trading pattern was very similar. The white metal closed right at the $18 level, holding above the 20-day SMA on a close basis. The halfway back point of the recent decline comes in at 18.27, which is now protected by Friday's high at 18.17.

Spot Silver Daily Chart

On the downside, a short-term close below the 20-day SMA (17.93 on Friday) would favor a retest of the 17.68 low from Tuesday. Below that, the 100-day SMA at 17.59 would be the likely attraction.

The stars of the week, however, were unquestionably the PGMs: Platinum posted a 4.6% weekly gain and closed above the $1,000 level for the first time in nearly 3-years. Palladium notched a 17.1% weekly gain and set a new record high somewhere north of 2500.

Spot Platinum Daily Chart

Reuters puts the new high at $2,537.06, but I'm not sure anyone really knows where this market is anymore. We've seen spreads blow out to as much as $200 wide and dealers take down their quotes. We heard talk today that at least two major liquidity providers have walked away from the palladium market, which has a distinct ripple effect throughout the market.

Spot Palladium Daily Chart

Ultimately, the underlying fundamentals for palladium remain supportive. The market remains in deficit on the supply side and demand remains robust from auto manufacturers, particularly those in China. Arguably a correction is overdue after 20 consecutive higher closes, but I think any such move will be viewed as a buying opportunity.

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 Financial Services LLC, unless otherwise expressly noted.

Pete Thomas and Peter Grant of Zaner Metals and Tornado Precious Metals Solutions discuss the precious metals market for the week ended Jan 17, 2020. Covered are gold, silver, platinum, palladium, copper and rhodium.

However, we suspect that resistance this morning has been thickened somewhat by signs that US/EU trade relations might be improving with positive EU commentary regarding talks with the US on trade.

While not overly impressive, Chinese economic data came in slightly better than neutral which might contribute minimally to the risk-on bias and in turn make gold and silver less attractive.

Gold might be put under late pressure today if prices in the afternoon are tracking below $1550 as the market continues to maintain a very large net spec and fund long and the prospects of a moderate weekly loss and risk on psychology could result in a retest of this week's lows down at $1536.40.

Gold ETFs yesterday sold 182,084 ounces of gold bringing this year's net sales up to 453,034 ounces. Silver ETF's also reduced holdings by 813,630 Troy ounces bringing this year's net sales up to 7.79 million ounces and posting 3rd straight day of net sales. In other slight negatives,

Barrick Gold predicted their fourth-quarter gold production to be higher than market expectations and a Chinese company purchase of a Russian Gold Mining company might have been derailed.

In retrospect Iran did threaten EU personnel in the region this week as a result of EU complaints regarding enrichment violations and the Iranian leader has also rekindled some tensions by suggesting the strike against American forces was "the hand of God". Therefore some residual safe-haven support is likely to remain in place ahead of the weekend.

It is also possible that President Trump will become more aggressive with Iranian sanctions if it appears that other countries are now growing tired of Iran's enrichment violations.

In the end, risk-on from equities looks to limit/pressure gold but the capacity to trade positive in the face of negative impacts this morning shows some residual capacity on the part of the bull camp.

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ETFs saw buying yesterday and some equity markets tracked softer and therefore some safe-haven buying of gold is to be expected. Another issue providing safe-haven interest in gold is Iranian threats against European military units in the Middle East region, reportedly because of EU claims that Iran has clearly violated the terms of the nuke deal.

While the gold market should derive some support from overnight news of another decline in South Africa gold production in November the market has been aware of that long term trend for a while and is of a mind that overall global gold production is expanding and offsetting that loss of supply. November South African gold production declined by 5.2% versus year-ago levels.

Gold appears to be embracing the fact that the Treasury Department and the US Trade Representative confirmed that the tariffs on Chinese goods would remain in place despite the signing of the Phase 1 trade deal, as that apparently keeps enough uncertainty in the market to provide some ongoing safe-haven support to the precious metals.

Furthermore, weaker than expected CPI and PPI readings should provide minimal support to the metals on ideas a clear lack of inflation will keep the Fed on an accommodative path.

Gold should also draft support from the dollar break-out below a recent consolidation pattern to its lowest level in a week. If the dollar stays under pressure in the upcoming sessions, it may empower gold to test the top end of the consolidation pattern of the past week, but it probably would not be enough for gold or silver to take a shot at the contract highs from January 8th unless geopolitical headlines provide a surprise.

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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 Financial Services LLC, unless otherwise expressly noted.

President Trump called the deal a "landmark agreement," but it strikes me as not much more than a cease-fire in the U.S.-Sino trade war. The deal includes enforcement mechanisms in case the Chinese don't live up to their end of the bargain and if that happens the trade war could escalate again.

The U.S. eased tariffs to 7.5% on about $120 billion in Chinese products, leaving $360 billion worth of exports from China fully tariffed. “We’re leaving tariffs on, but I will agree to take those tariffs off if we are able to do phase two,” said the President. There seems to be some uncertainty regarding when Phase Two talks will begin.

Also on Wednesday, the House transmitted articles of impeachment against President Trump to the Senate. The Senate trial is expected to commence next week. There is little chance that Mr. Trump will be found guilty in the Senate and removed from office.

U.S. PPI for December came in weaker than expected, much like CPI did on Tuesday. Soft inflation readings are going to keep the Fed leaning neutral to dovish, despite surging asset prices.

Friday's high in gold at 1563.13 corresponds pretty closely with the 38.2% retracement level of the decline off of last week's high. A breach of this level would further ease pressure on the downside, returning additional confidence to the underlying uptrend.

Silver has held the 20-day SMA on a close basis. I'd like to see the white level regain the 9-day SMA at 18.06 and then clear the 18.13 Fibonacci level (38.2% retracement level of the decline from last week's high) to suggest that a short term low is in place.

Palladium was up more than 3% today, its 18th consecutive daily gain. The new record high is 2260.00. The next objective is 2307.71.

Platinum surged above $1,000 for the first time in nearly 2-yrs, pressuring the January 2018 high at 1028.61. The next tier of resistance is 1043.83.

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 Financial Services LLC, unless otherwise expressly noted.

However the Chinese are apparently okay with that development as there does not appear to be a cancellation of the official signing today.

Limiting the gold and silver rallies this morning is the fact that both gold and silver ETFs reduced their holdings yesterday. Gold ETF holdings were reduced for a 5th straight session, bringing this year's net sales up to 439,026 ounces while silver holdings were reduced by 1.46 million ounces bringing this year's net sales up to 6.87 million ounces.

Physical supply-side news overnight was mixed with Hochschild Mining raising 2020 production and Eldorado 4th quarter production merely meeting company estimates.

While not significant, gold might see some minimal support from a modest failure in the dollar below a base of support built above 97.00.

Apparently, the trade is seeing some speculative buying off the idea of some last minute breakdown in trade talks or they are pricing in some impeachment fireworks and or the market expects producer prices to mirror US CPI with anemic results.

On the other hand, the markets have now seen 2 different key US data points recently that effectively extend the duration of the US Fed's "on hold" status and that should eventually help to cushion precious metals prices.

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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 Financial Services LLC, unless otherwise expressly noted.

Certainly, the looming trade deal signing combined with positive US/Chinese currency-related discussions provides fresh selling impetus but we would also suggest Chinese import/export data overnight signals the Chinese economy is simply improving! While many doubt the Chinese can fully fulfill their purchasing agreement with the US and many doubt other more complicated portions of the trade agreement will be solved, those concerns are brushed to the sidelines in the near term.

In yet another negative for gold, stories overnight indicate that money continues to exit gold ETFs with 123,968 ounces liquidated Monday bringing this year's to date sales up to 371,273 ounces. According to Bloomberg SPDR Gold Shares last week saw $1 billion liquidated in a shift that is obviously the result of the impending trade deal signing.

Despite surging strength in the Chinese currency, the dollar enters today's trade in positive territory with the currency building consolidation support on the charts which in turn makes it unlikely the dollar will come to the rescue of gold bulls.

The focus of the gold market is likely to shift to US consumer price readings today with the headline reading expected to show a 0.3% gain. One does have to wonder if surging gasoline prices will result in a jump in the CPI as the month of December saw a low to high rally in gasoline prices of $0.24 (+15%). Unfortunately for the bull camp seeing CPI breakout above the long-held -0.1%/+0.3% range might be negative as that could shift expectations away from for an on-hold Fed.

Certainly, gold and silver prices are also under pressure because of an extremely large net spec and fund long positions, but so far the markets have not seen a wave of really aggressive stop-loss selling. Therefore we can't rule out a sudden aggressive wave of capital/margin liquidation especially with key chart levels in gold and silver violated early this morning.

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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 Financial Services LLC, unless otherwise expressly noted.

The yellow metal was confined to Friday's range, leaving last week's corrective low protected, at least for the time being. However, the key reversal chart pattern seen last Wednesday remains troubling and now so too does the close below the 9-day SMA. There remains downside risk and so a measure of caution is warranted here.

While the details of the trade deal remain vague, reports suggest China will agree to ramp up purchases of U.S. agricultural products, while also committing to curtail forced technology transfer. Those are two pretty big steps in the right direction, but it looks like broader efforts to protect U.S. intellectual property will be dealt with in a later "phase".

Stocks set more record highs, on Monday while Dr. Copper surged more than 1.5% to set more than 8-month highs as trade concerns ebbed. A Bloomberg article today noted that copper inventories have contracted 37% since July, so supply is tight. If trade rebounds between the U.S. and China, the demand for copper is likely to increase and drive the price higher yet.

Silver, on the other hand, doesn't seem to be garnering much support from the brighter trade picture. Instead, the white metal is trading more like a safe-haven and therefore remains short-term defensive. The 20-day SMA at 17.80 may be the attraction.

However, last week's push to nearly 5-month highs was really encouraging and returned considerable credence to the uptrend that dominated in Q3 2019. Make no mistake though, the white metal remains confined to the 13.64/21.14 range that has dominated since 2016.

Iran admitted over the weekend that they did indeed inadvertently shoot down the Ukranian passenger airliner. This has resulted in anti-government protests in Iran that have turned violent.

While the internal strife may keep the Iranian regime focused inward, for the time being, I think it's safe to assume that tensions between the U.S. and Iran are going to be elevated for some time to come. The market, however, likes the fact that the two countries aren't exchanging ordinance.

I still don't see recent price action in gold as a major reversal. Rather, I think the retreat from last week's high is corrective in nature and investors are likely to be looking for buying opportunities.

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 Financial Services LLC, unless otherwise expressly noted.

Adding into the negative bias is 3rd straight day of gold ETF liquidations, bringing this year's net sales to 247,304 ounces. Silver ETFs also reduced by 3.1 million ounces bringing the year to date sales to 5.59 million ounces.

While the most recent positioning report in gold did not show a fresh record all-time high reading, we suspect a record would have been posted if the report was compiled at last week's high. Certainly seeing the net spec and fund long position near 400,000 contracts creates the potential for further stop loss selling and extensive price volatility this week.

While geopolitical tensions between Iran and the US remain high, it is possible supportive headlines for gold will be largely absent in the near term as both parties appear to be content to "stand down" from the brink of war. Fortunately for the bull camp in gold, the market appears to have found some measure of value around the $1,550 level on the charts with that level being a key value zone in the August and September timeframe.

While it is difficult to make last week's US nonfarm payroll readings into a definitive uncertainty, the numbers did result in a bounce in gold prices in the immediate aftermath of their release and therefore the market continues to benefit from economic numbers coming in under expectations. Others will suggest that a deceleration of US jobs growth will extend the duration of ultra-low global rates which in turn could facilitate the extension of the gold bull market.

However, we suspect resistance in gold around the $1,574 level could be thick early this week due to the anticipated signing of the US/Chinese trade deal.

The January 7th Commitments of Traders report showed Gold Managed Money traders added 9,132 contracts to their already long position and are now net long 272,302. Non-Commercial & Non-Reportable traders are net long 391,530 contracts after net selling 371 contracts.

Like the gold market, the silver market also appears to have found some value on the charts around the $18.00 level and we suspect the market will generally respect consolidation low pricing at $17.81.

Unfortunately, the net spec and fund long position in silver are also burdensome with the net long sitting within 24,000 contracts of the all-time record high. Silver positioning in the Commitments of Traders for the week ending January 7th showed Managed Money traders net sold 1,577 contracts and are now net long 58,788 contracts. Non-Commercial & Non-Reportable traders are net long 94,633 contracts after net selling 5,229 contracts.

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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 Financial Services LLC, unless otherwise expressly noted.

Gold set a near-7-year high on Wednesday at 1611.41, after Iran launched missile attacks on Iraqi airbases where U.S. troops are stationed in reaction to the U.S. drone attack that killed Iranian general Soleimani.

As a result of that upside extension, more than 61.8% of the entire 9-year corrective/consolidative phase since the all-time high was established at 1920.74 in 2011 has now been retraced. That bodes well for the long-term uptrend, despite the rather precipitous retreat from Wednesday's high when the U.S. decided not to respond militarily to the Iranian attack.

Spot Gold Monthly Chart

While Wednesday's price action resulted in a technical reversal, I saw it more like a return to the general area where gold was trading after the drone strike on Soleimani. I was watching the 9-day SMA, which was tested both on Thursday and Friday but held on a close basis.

Spot Gold Daily Chart

The fact that gold closed higher on Friday both for the day and week os encouraging, but I'd like to see the 50% retracement level of the sell-off at 1575.81 exceeded to return confidence to the previously established 1625.93 Fibonacci objective. The cycle high at 1611.41 now defines a good intervening barrier.

Friday's weaker than expected U.S. jobs report for December was mildly supportive of the precious metals complex. U.S. nonfarm payrolls rose 145k, below expectations of +178k, versus a negative revised +256k (was +266k) in November.

Disappointing yes, but the November print is still solid, even with the downside revision. The recent averages for NFP should continue to keep the Fed doves at bay.

All in all, I'm impressed with gold's resilience in the face of new record highs in the stock market this past week, as well as a firmer dollar. We'll look for further upside retracement in the week ahead as confirmation that the bull trend is alive and well.

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 Financial Services LLC, unless otherwise expressly noted.

Gold did see a measure of support from a bit of confusion on the date of the US/China trade deal signing. Apparently the President indicated the signing would take place "shortly after January 15th) and that seemed to suggest a possible delay.

The market might also be seeing some residual support from Iranian commander comments yesterday alluding to the potential for future attacks but in general, there doesn't appear to be a fuse available to light the bull case today. However, the US nonfarm payroll report could provide a measure of volatility in the event that the readings are softer than expected as that would rekindle some economic uncertainty.

In a sign of waning market bullishness, both gold and silver ETFs saw liquidations of holdings yesterday with the net sale of 91,085 ounces of gold lowering this year's net purchases to only 4,902 ounces. It should also be noted that silver ETFs now have net sales of 2.49 million ounces so far this year.

While the gold market has not paid that much attention to classic supply-side fundamentals the trade was presented with news of a 33% annual increase in second half 2019 gold production from DRDGold but that overall production level wasn't overly significant at 3,037 kilograms. In fact that minimally negative news was offset by Evolution Gold news that their full-year gold production would come in at the lower end of their production forecast for the year around 725,000 ounces.

While not a significant factor there have been more South African power problems this week and that could result in some lost gold output in future supply readings.

A developing negative for gold and silver prices is seen from the extension of gains in the dollar back to the highest levels since December 26th!

From a technical perspective, the February gold contract continues to show some attraction to the $1550 level thereby providing the bulls with some confidence and in turn that tempers the aggressive bearish sentiment in place in the prior two trading sessions.

While the COT positioning report released after the close today will probably not see the impact of the Wednesday explosion on the upside we suspect the spec long positioning adjusted for the highs this week would have resulted in a new record high long. Therefore, the threat of further stop loss selling should not be understated and traders should view the Thursday low of $1,541 as a potential inflection/pivot point where another wave of panic selling could be seen.

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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 Financial Services LLC, unless otherwise expressly noted.

Adding credence to the argument of a blow-off top is the fact that yesterday's gold futures trading volume of 886,139 contracts was the highest daily trading volume since November 9th of 2016! In fact, the swiftness of the pause/end to the US/Iran clash appears to have yanked the safe haven rug from under the gold market in one fluid motion.

With stories from India suggesting the seven-year high in gold prices left buyers there shell shocked, one should expect to see the January Indian gold imports figures to come in much lower when they are ultimately released.

Evidence of the disappointment/shift in sentiment was also seen from liquidation of both gold and silver ETFs yesterday which leaves gold ETFs with net purchases this year of only 95,987 ounces.

Silver ETFs also cut their holdings by 815,432 ounces which brings this year's net sales level to 2.4 million ounces.

As we have said a number of times recently we suspect that the gold net spec and fund long position (adjusted into the high on Wednesday) reached a new all-time high level and that should facilitate rather significant corrective declines from stop-loss selling ahead.

In a longer-term supportive development, the World Gold Council has confirmed that gold-backed ETF holdings grew 14% in 2019, reaching all-time highs, and they projected Central Bank buying to continue to expand and they also suggested low interest rates would remain supportive in 2020 and that should keep some long term demand hopes alive but that news doesn't look to be capable of cushioning prices against a near term corrective environment.

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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 Financial Services LLC, unless otherwise expressly noted.

However, gold backed off those highs when the U.S. didn't counterstrike immediately. Further retracement was seen when the President tweeted that "All is well" and that he would make a statement in the morning. Subsequently, reports trickled out that both the Iraqi military and U.S. forces were forewarned of the Iranian attack.

Spot Gold Daily Chart

That made it seem like the Iranian regime was just looking to save face by lobbing some missiles in the general direction of some U.S. forces. As it turned out, no U.S. personnel were killed or injured, allowing President Trump to walk back his previous threat to retaliate "quickly and fully".

Instead of a military response and further escalation of the situation, the Trump administration opted to pile on additional economic sanctions. Mr. Trump went on to say that "Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world."

With the risk of an all-out war between the U.S. and Iran seemingly mitigated, gold has returned to the area where it closed on January 3rd (1551.61) when Iranian General Qasem Soleimani was killed at the Bagdhad airport by a U.S. drone strike.

This seems to make sense. However, tensions are still high. It remains to be seen if the Quds Force and its proxies – under their new leadership – will continue to engage in disruptive and often lethal actions against U.S. interests in the region.

Price action today did do some fairly significant technical damage to the chart. Note the outside day, bearish engulfing pattern, and that a key reversal will be confirmed on a close below Tuesday's low at 1555.33.

Nonetheless, I'm not inclined to be terribly bearish at this point. As previously stated, Middle East tensions, while relieved somewhat, are not going away any time soon. In addition, the fundamental factors beyond Iran, that drove gold higher throughout most of 2019 are still very much in place.

Gold could certainly retrace deeper into the January 3rd range (1553.55/1528.79) with the 9-day SMA at 1539.55 offering additional support. Today's sharp drop did do a nice job of relieving the excessive overbought condition that was highlighted in a Bloomberg article from earlier in the week: Gold has been This Overbought Only Thee times in Two Decades

I still like the next upside Fibonacci objective at 1625.93 with today's overseas high at 1611.41 providing a solid intervening barrier. A rebound above the midpoint of today's range at 1581.82 would offer encouragement to the bullish scenario.

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 Financial Services LLC, unless otherwise expressly noted.

While it is difficult to determine what the next move from the US will be, it is difficult to think that President Trump will stand idle and therefore gold is likely to continue to be one of the more sensitive risk-off markets.

On the other hand, gold ETF holdings yesterday jumped by 232,438 ounces bringing one composite gold ETF reading to the highest level since April 2013. Not surprisingly some press coverage overnight is projecting gold ETF holdings will now return to the all-time highs posted at the end of 2012. Current ETF holdings (by one media compilation) stand at 64.3 million ounces relative to the record high in that measure of 76.1 million ounces.

In other evidence of demand for gold, the Australian Mint saw December sales of bullion coins and minted bars up 45% from the prior month and up 170% from prior year readings.

In short, the current environment is very conducive to the bull argument with the temporary regaining of the $1600 level on the charts an obvious bullish headline capable perpetuating more investment inflows.

Certainly seeing the US dollar regaining its footing with a six straight day of recovery serves to limit some of the upward traction in gold. However, the focus of the market will now turn to the US Presidential press conference later today at that press conference was originally scheduled for yesterday and was obviously pushed back because of the attacks yesterday evening.

While there will be some employment-related data from the US released today and a Fed speech in the morning, it is unlikely those events will have a lasting impact on gold and silver prices as the focus should remain locked on Iran.

While the bulls have fundamental control, technical action is worrisome. The net spec and fund long have clearly exploded to even higher record levels and the bulls will now need further "military" action straightaway to extend. Critical pivot/failure pricing is seen at $1568.80 in February gold with similar pivot point/failure pricing in March silver seen at $18.325.

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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 Financial Services LLC, unless otherwise expressly noted.

President Trump had previously threatened to retaliate "quickly and fully" should Iran strike "any U.S. person or target." Now that U.S. targets have been struck, it seems the U.S. military is going to have to hit back.

The President tweeted in response to the Iranian action:

"All is well! Missiles launched from Iran at two military bases located in Iraq. Assessment of casualties & damages taking place now. So far, so good! We have the most powerful and well equipped military anywhere in the world, by far! I will be making a statement tomorrow morning." - President Donald Trump

This suggests the U.S. military is unlikely to respond before the President's statement. That may explain the pullback from the highs.

However, the U.S. is not going to shrug this off. Trump said several days ago that 52 Iranian sites had been pre-targeted, including cultural sites.

We'll see what Wednesday brings, but risk-off sentiment is going to keep gold underpinned for some time to come. The 1625.93 Fibonacci level remains the next upside target. The previous high at 1557.06 marks the first tier of significant support and I'm thinking it should remain protected.

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 Financial Services LLC, unless otherwise expressly noted.

Underpinning gold prices are suggestions from Iran's National Security Council that they are assessing 13 retaliation scenarios against the US, with even the weakest retaliation resulting in a historic nightmare for the US!

Massive attendance at the funeral of the Iranian military leader has extended anxiety from the "Iran war threat" theme but generally higher equities, weaker oil prices and declines in other safe-haven instruments like bonds and the Japanese Yen suggest gold is somewhat vulnerable early on.

However, comments from US Fed officials yesterday that rates would stay on hold for now are also supportive but that potential will be heavily impacted with the Non-farm payroll result on Friday.

The Commitments of Traders report showed managed money traders were net buyers of 20,251 contracts for the week ending December 31, increasing their net long to 263,170. This is their largest net-long since October and not too far off the record 310,000 from September.

Non-commercial & non-reportable traders combined were net buyers of 32,798, increasing their net long to 391,901 versus a record 493,000 from September. The large net long held by speculators leaves the market vulnerable to long liquidation selling if support levels are taken out.

Silver also started out strong on Monday, but unlike gold, it did not trade to a new contract high and did not leave any gap.

The COT report showed managed money traders were net buyers of 5,795 contracts of silver for the week ending December 31, increasing their net long to 60,365. Non-commercial & non-reportable traders were net buyers of 10,928, increasing their net long to 99,862. Both of these categories are approaching the levels from September, which were their largest net longs since 2017.

Gold ETF holdings declined by 28,940 ounces yesterday, leaving this year's net purchases at 144,007 ounces. Silver ETFs also reduce their holdings by 1.2 million ounces bringing this year's net sales up to 3.02 million ounces.

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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 Financial Services LLC, unless otherwise expressly noted.

The Fibonacci objectives mentioned in Friday's post at 1586.66/1587.37 were satisfied before the yellow metal adopted a modestly corrective tone. However, with more than 61.8% of the entire correction off the all-time high set in 2011 now retraced, considerable credence has been returned to the long-term uptrend.

The Iranians have promised retaliation and the U.S. is already moving additional troops to the region. President Trump has threatened that "should Iran strike any U.S. person or target, the United States will quickly & fully strike back, & perhaps in a disproportionate manner."

The U.S. assuredly has Iranian military units and facilities under very close surveillance. While it seems unlikely that the Iranians would dare strike against the U.S. or our allies in the region, Iranian proxies may not so rational.

The risks of conflict are very real and those risks are likely to persist for some time. That should provide continued support for gold as a safe-haven with sights on the next Fibonacci objective at 1625.93.

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 Financial Services LLC, unless otherwise expressly noted.

Like the petroleum markets, the gold market is in a full-on risk-dominated posture with follow-through gains being seen this week. However, it is unlikely Iran will be able to retaliate quickly, as they were caught unaware and will be facing intense monitoring by US systems.

Instead, our projection is for an isolated terrorist attack against soft targets, as any movement by Iranian military assets could be instantaneously liquidated. After all, the US planned the attacks and has probably implemented increased surveillance and defense capacities.

The gold market might also expect to see buying interest from last week's US ISM reading, which reached the lowest level since June 2009.

Another focal point will be the action in the US dollar, as it did show liftoff with last week's spike in global anxiety. However, if US scheduled data starts out soft this week and the headline flow from the Middle East moderates, the dollar could see last week's gains removed.

Certainly, the gold market is short-term technically overbought given the compact crescendo of buying on Friday and overnight, with the largest volume of trade since November 26. Given the $50 rally since the last Commitments of Traders report, we suspect that the spec and fund net long creeping toward its all-time high.

Even the silver market is seeing its spec and fund net long position expand, and if we adjust for the 30-cent gain since the last report was released, it could be at its highest level since mid-2017. Since we doubt a quick retaliation from Iran, some back and fill action is likely if scheduled data does not come in soft and global equity markets avoid further large declines.

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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 Financial Services LLC, unless otherwise expressly noted.

The Iranians have vowed retaliation and that risk of escalation should keep a bid under gold into next week. Fresh cycle highs would shift focus to Fibonacci objectives at 1586.66/1587.37.

The United States Mint reported year-end 2019 sales data this week and not surprisingly the totals were pretty dismal:

Gold eagle sales were just 152,000 ounces in 2019, the weakest on record, going back to the start of the program in 1986. Sales were down a whopping 38.1% from the 245,500 ounces sold in 2018 and 7.3% lower than the previous weakest sales of 164,000 ounces sold in 2000.

Silver eagle sales were 14,863,500 ounces in 2019, down 5.3% from the 15,700,000 sold in 2018. That's the weakest annual sales total since 2007 when the Mint sold 9,887,000 ounces.

Interestingly, the weak 2007 sales also occurred in a rallying silver market. We all know what happened next: After a big sell-off, driven by deleveraging and sympathies to the broader commodities market, silver was off to the races. The white metal ultimately approached $50 in 2011.

That sell-off was a whopping 60%, from the Mar 2008 high at 21.34 to the Oct 2008 low at 8.41. To be clear, that all happened in the paper market. We hardly saw any physical selling in 2008. In fact, US Mint data show that silver eagle sales nearly doubled to 19,583,500 ounces in 2008! Annual sales ultimately reached a high water mark of 47,000,000 ounces in 2015, around when silver bottomed out at 13.64.

While gold rose 18.3% and silver rose 15% in 2019, clearly physical precious metals were out of favor (at least here in the U.S.) as investors were enticed by soaring stock prices. When those investors were inclined to diversify, they opted for ETFs and other derivatives rather than bars and coins. It all feels familiar...

In 2019, physical precious metals buyers in some states were also getting hit with sales tax for the first time. This comes in the wake of the 2018 South Dakota v. Wayfair Supreme Court decision, which is being interpreted by many states as an opportunity to force out-of-state sellers to collect sales tax on bullion and coins purchases.

I'm not sure the industry has fully assessed the impact of these new laws yet, but I'm guessing it is certainly impacting sales in some states. If you are an investor that decided not to buy physical metal because of the sales tax implication, or you are a seller of coins and bullion, I encourage you to join (or donate to) the Industry Council for Tangible Assets.

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 Financial Services LLC, unless otherwise expressly noted.

While the gold market could be held back by the two-day recovery in the dollar, evidence of weakness in Chinese November gold imports from Hong Kong and news from yesterday that Indian gold imports last year declined by 12% over year-ago levels, the market instead has fully embraced a flight to quality/safe haven focus.

Yet another negative in the last 24 hours for the gold market came from the US Mint which indicated gold coin sales last year were the lowest on record. However the soft demand evidence this week is a backward look at demand sectors that were not expected to lead the gold market higher in 2020.

In fact, gold ETFs increased their holdings yesterday for a 6th straight trading session with the addition of 100,311 ounces.

Unfortunately for silver bulls, silver ETFs reduced their holdings by 616,294 ounces which brings the net two-day sales tally for 2020 up to 1.7 million ounces.

Going forward the trade will focus on the Middle East and the action in the crude oil market which overnight posted gains in excess of $2.70. It is possible that additional stimulus from China, recent signs that the dollar has entered a downtrend and a sustainable safe haven condition has set the stage for a return to the 2019 highs up at $1,571.70.

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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 Financial Services LLC, unless otherwise expressly noted.

These gains bode well for a short-term challenge of the 1557.06 peak from September and return further credence to the dominant uptrend. The yellow metal posted an 18.3% gain in 2019, with the bulk coming in Q3. Fresh highs for the rally early in the new year would offer further encouragement to the bulls.

Spot Gold Daily Chart

Central bank purchases of gold combined with their generally easier monetary policies were driving forces in 2019 and appear poised to continue into 2020. While tensions surrounding the U.S./China trade war has eased in recent weeks, it seems a final deal may still be months away.

The Phase One trade deal will reportedly be signed at the White House on January 15 with high-level Chinese government officials in attendance. President Trump tweeted on Tuesday that he would travel to Beijing "at a later date" to begin talks on Phase Two.

Similarly, while the UK election provided some clarity with regard to Brexit. There are still plenty of details to work out, any one of which might stoke fresh uncertainty and haven demand for precious metals.

The latest escalation of tensions in the Middle East – centered on Iran and its proxies – is likely to offer further support for gold.

Silver ended 2019 having retraced just over half of the corrective losses off the September high at 19.65. Silver notched a 15% gain in 2019, its best performance since 2010.

Spot Silver Daily Chart

I'd like to see some additional upside follow-through to bolster confidence in the preferred bullish scenario. I'm watching chart resistance at 18.22 and 18.33, as well as the 61.8% retracement level of the aforementioned decline at 18.45.

Platinum posted a 22% gain in 2019 and was able to approach the September high at 997.55 today. A breach of this level would clear the way for a move above $1000 for the first time since early-2018.

It was palladium however that was was the star of the precious metals show in 2019, posting a whopping 54% gain and setting new record highs with regularity. Arguably palladium remains pretty overextended, even with the recent corrective activity. Nonetheless, the fundamentals remain broadly supportive into 2020.

It is that recent correction that gives us our next objectives beyond the 1999/63/2000.00 level at 2051.42 (127.2% retracement) and 2117.30 (161.8% retracement).

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 Financial Services LLC, unless otherwise expressly noted.

Apparently seeing China cut its bank reserve ratio again (which is thought to inject nearly $115 billion into their economy) has failed to start gold out on a definitively positive track today.

Furthermore, the gold market has not garnered support from a slight increase in uncertainty from UK, German and Chinese factory activity readings which were disappointing. While not overly significant gold ETFs in the prior trading session saw inflows of 24,597 ounces bringing holdings up for the fifth straight trading session.

Silver ETFs reduced their holdings by 1.17 million ounces.

Perhaps the bounce in the dollar this morning is providing a bit of pressure on gold as the downtrend pattern has been fairly aggressive in the Dollar over the past five trading sessions with the dollar earlier this week reaching the lowest level since the middle of July.

We also suspect that gold is off its game to start the New Year because of soft Indian gold imports in the April through November timeframe. Indian gold market participants blame the increased import duty for the decline while others suggest high prices and disappointing economic growth have contributed to the reduction of imports.

However, in looking ahead the trade remains bullish toward gold prices in 2020 with central bank gold buying, residually low-interest rates and investment rotation into gold providing the structure for a continuation of the second half 2019 rally.

In the short term, risk on psychology, disappointing physical demand news from India and the bounce in the dollar could set the stage for a minor setback to recent consolidation low levels around $1512.10.

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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 Financial Services LLC, unless otherwise expressly noted.

However, China has already increased imports of US soybeans over the last two months and has reduced tariffs on pork and many tech items which would seem to suggest they are already moving to fulfill widely anticipated components of a first step agreement.

In a slightly negative development, gold ETFs on Tuesday sold 54.4 million ounces of gold which is the largest single-day sale in 12 months which in turn brings gold ETFs to a net sales tally of 44.3 million ounces on the year! According to Bloomberg overall gold ETF holdings have also fallen to the lowest level in 12 months. Therefore it would appear as if some investors are seeing the close proximity of a Phase I trade deal signing as a negative and it is also possible that the unrelenting string of new record highs in equities has broken the safe haven back of a portion of the bull camp.

On the other hand, silver ETF's on Tuesday added 429,401 ounces of silver to their holdings, putting this year's net purchases at 83.5 million ounces.

In addition to news that the silver VIX jumped by 17% in a possible signs of a shift in focus away from gold and toward silver, the silver market was also presented with a bullish 2020 forecast from Barron's which projected silver and platinum prices would play "catch up" to their gold and palladium counterparts next year.

There were some projections of increased buying ahead of the Chinese New Year but we feel that is a bit premature. In a slightly negative development, increased political tensions in India have apparently deterred some gold purchases due to the protests but some would suggest safe haven incentives in India will ultimately lift demand.

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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 Financial Services LLC, unless otherwise expressly noted.

However, gold and silver regained and took out key technical points on the charts in the form of long-held consolidation resistance and given thin trading conditions that could result in some noted upside follow-through.

In looking back one should note that gold began to firm late last week following United Nations/US suggestions that the attack on Saudi Arabian oil facilities was likely carried out from the "North" which in turn implicates Iran. Obviously clear proof of Iranian involvement in the attacks would be a flashpoint for Middle East relations with retaliation likely, instability and flight to quality interest stirred globally.

In looking forward the US trading session will bring 3rd tier economic manufacturing report which is expected to be slightly better than a negative reading seen in the prior month.

Low volume, thin, pre-holiday trade leaves the market vulnerable to sudden moves that might not hold.

Silver appears to be leading gold, as it was first broke out of its recent consolidation on Friday and gold waited until Sunday night. Therefore gold and silver might draft a small amount of lift in the event of soft US data with near term upside targeting in February gold seen at $1500 and at an early November consolidation zone of $17.79 silver.

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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 Financial Services LLC, unless otherwise expressly noted.

We have continued to give the edge to the bear camp in gold, as the market has been consistently presented with the type of "risk-on" environment that in the past has typically sparked liquidation by safe-haven bulls. The bull camp appears to be holding out hope that the trade situation will, as it has in the past, be derailed before the phase one trade deal becomes official.

We also suspect that a portion of the bull camp is holding out for a derailment of the BREXIT effort, which seems to be speeding toward a conclusion. It is also possible that gold is drafting some cushion from last week's revelation that the attacks on Saudi oil facilities originated from the north, as that would seem to implicate Iran, as that could result in retaliation and a sudden flare-up in uncertainty for the global economy.

One might also take note of a slight softening of US scheduled data at the end of last week, which fosters some hope among the bull camp in gold. The February contract was able to pierce the top of a two-month consolidation pattern overnight and traded to their highest level since December 12 after consolidating for five sessions.

While the spec and fund net long position in gold has come down from this year's high of 398,000 contracts, it remains in the upper portion of the last 3 1/2 years' range, which should leave the market vulnerable if the pattern of record highs in equities and better economic data the seen ahead. Friday's Commitments of Traders report showed managed money traders were net buyers of 21,814 contracts of gold for the week ending December 17, bringing their net long to 219,268. Non-commercial & non-reportable traders combined were net buyers of 23,190, increasing their net long to 325,624. February gold achieved some bullish technical milestones overnight, and it could be on a path to test the December high today.

Silver appears to be leading gold these days, as it managed to break out on Friday and continued that move overnight. The March contract traded through the December 4 high overnight to its highest level since November 7, crossing above the 50-day moving average in the process.

Silver appears to be benefiting from classic physical commodity market conditions. The dollar was a bit weaker overnight but not very, and US equity markets seem to be finding mild support ahead of the open.

Unfortunately, the spec and fund net long in silver is also relatively high. The Commitments of Traders report showed managed money traders were net buyers of 6,617 contracts of silver for the week ending December 17, increasing their net long to 36,574. Non-commercial & non-reportable traders combined were net buyers of 9,228, bringing their net long to 72,001.

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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 Financial Services LLC, unless otherwise expressly noted.

Spot Gold Daily Chart

The impeachment was a nonevent because markets had priced in a party-line vote on the matter. While the failure of House Democrats to deliver the articles of impeachment to the Senate is an unexpected twist, I still don't think anyone believes there is a realistic scenario where the President gets removed from office.

On the trade front, positive news continues to trickle out, although plenty of skeptics remain. President Trump tweeted on Friday that he had a "very good talk" with President Xi of China and that they have already started "large scale" purchases of U.S. ag products. He went on to add that, formal signing of the agreement is "being arranged."

The stock market sure seems to be optimistic on trade, but despite the 'risk-on' environment, gold and silver continue to hold up well. In fact, silver pushed to a 2-week high on Friday. When I'm leaning toward the bullish side, negative action in the gold/silver ratio always makes me feel better!

Palladium corrected sharply on Friday – dropping more than 5% – as traders squared positions ahead of the weekend and the holiday week ahead. In a thinly traded market like palladium, this level of volatility is not overly concerning. The underlying fundamentals remain bullish, as does the underlying trend.

Platinum got dragged lower as well, leaving the white metal confined to the range that was established in November. Here the underlying fundamentals remain bearish as the only way to address the supply deficit in palladium is to mine more platinum, which only adds to the supply surplus in Pt.

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 Financial Services LLC, unless otherwise expressly noted.

On the other hand, seeing the Chinese President overnight issue a very firm warning about foreign interference in Chinese domestic affairs would seem to rekindle the potential for a failure to actually sign the Phase I into an official commitment.

The gold market apparently discounted news of a decline in Hong Kong gold exports to mainland China overnight with the year to date decline pegged at 38% and it should also be noted that exports to mainland China in July and October were down even more as the violence worsened in that period. However Shanghai gold closed higher and the early US price is within striking distance of this week's highs.

The bear camp probably sees some assistance from the news that a gold mine in Ghana that was idled five years ago has had its first physical output again and the mine is expected to produce roughly 350,000 to 400,000 ounces a year.

Yet another negative for gold to end the trading week is India's fresh restriction on the import of gold and silver in powder and other unwrought raw forms.

In a surprising development gold ETFs saw no change of note in their daily holdings while silver ETFs saw a reduction of 128,853 ounces. It should be noted that the silver ETF holdings are now at the lowest level since August 9th and the silver market is also forging an extremely tight coiling pattern.

Without disappointing US scheduled data yesterday and the seemingly threatening Chinese interference comments overnight we would be patently bearish toward gold to end the week but some geopolitical and economic uncertainty evidently remains in place.

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Certainly, the potential for flight to quality buying from the US impeachment remains in play but it would appear to be unlikely that some surprising unforeseen bombshell will surface after the intense scrutiny of the past two weeks. Therefore that issue should begin to drift to the background.

It would also seem as if the uncertainty and anxiety from the US/Chinese trade situation are draining from the marketplace, thereby leaving gold and to a lesser degree silver in a vulnerable position. In fact, given that gold in the last positioning report showed a net spec and fund long of 331,201 contracts any extension of risk on inspired new all-time highs in equities ahead should increase the potential of a retest of consolidation low support levels down at $1465.50 and $1463.

However gold ETFs saw additions yesterday of 148,011 ounces which brings this year's net purchases back up to the 10 million ounces level. Investors also bought 48,876 ounces of silver yesterday which brings this year's net purchases tally up to 84.2 million ounces.

It should be noted that Indian officials overnight indicated that the gold monetization program details would be discussed after the Indian budget is in place and he also suggested that the government was considering allowing Indian jewelers to have access to gold bank deposit accounts. While the program is designed to mobilize the investment value of gold inside India, officials have also indicated they hope the program will reduce gold imports and therefore some see that looming program as a negative to global gold prices.

In another minor longer-term negative supply-side development overnight, the Australian government has forecast expanding gold production with the potential for Australia to become the world's largest gold producer over the current number one "China".

In retrospect, the gold market this week has seen some evidence of fresh central bank gold buying from the IMF for the months of October and November, but the magnitude of that buying activity was very limited in scale because of the countries involved were not large economies. In the end, we continue to respect the gold market's ability to "stand up to bearish forces" but we also can't ignore the potential for a sudden wave of safe-haven long liquidation selling.

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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 Financial Services LLC, unless otherwise expressly noted.

While it is possible that the gold market might be holding up into the US impeachment vote, polling data show rising opposition to impeachment and the President's approval rating is rising and that could either reduce the margin of victory for the Democrats or simply reduce the importance of an actual impeachment.

While the market has not been negatively impacted by recent changes in ETF holdings it should be noted that gold exchange-traded funds saw 5,499 ounces liquidated yesterday and 836,953 ounces of silver ETFs liquidated.

However, the gold market should draft fresh optimism from overnight news from the IMF that Turkey and Kazakhstan central banks increased their gold reserves in November. Other central bank gold reserve builds included Indian October holdings, Mongolia November holdings, United Arab Emirates October holdings, and Serbian October holdings. The IMF also reported a reduction in the holdings by Columbia which was the first reduction since 2015.

In a minimally negative supply-side development, Tanzanian gold exports in the first 10 months of 2019 jumped by 48% which would be the equivalent of an additional flow of 115,000 ounces each month.

With the gold market standing up to a bounce in the dollar and even more importantly, standing up against very positive US scheduled data flows, the bull camp has ongoing resolve but it looks to continue to face headwinds from upbeat global sentiment.

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Even with the rebound in the dollar from the 5-month lows established last week, gold seems reluctant to test nearby supports. I think the resilience displayed by gold in the wake of the trade deal announcement has been impressed. Now it just needs a catalyst to trigger a breakout of the range.

In these types of situations, I typically favor a breakout in the direction of the underlying trend. A glance at the weekly chart suggests the trend is up, even after several weeks of corrective/consolidative activity since the September high was put in.

Spot Gold Weekly Chart

I'd still like to see a move above $1500/1501 to ease short-term pressure on the downside and return confidence to the uptrend. On the other hand, last week's low at 1458.68 needs to hold to keep the range lows at 1450.05 and 1445.62 at bay.

Charlie Morris, Chief Strategist at Atlantic House Fund Management and the author of Atlas Pulse is optimistic as well.

"As I write, the gold price is $1,475, up 15% this year having touched $1,550 (+21%) in September 2019. If the current price holds, this will turn out to be the best year for gold since 2010. And as we move into 2020, I bring further good news; this bull market has legs." – Charlie Morris 

Morris is convinced that falling real yields are going to push gold to a fair value of $3386. Further out, when higher premium and an expectation for higher inflation are factored in, the potential is toward $7166.

That makes the present levels seem like a great place to start building positions or adding to existing positions. As mentioned above, short-term risk is pretty limited.

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 Financial Services LLC, unless otherwise expressly noted.

Unfortunately for the bulls, gold ETFs continue to liquidate holdings which continued a general pattern that started over the past two weeks but on the year ETF gold holdings are still up by 14%.

On the other hand, silver ETF's added 622,731 ounces to their holdings yesterday for the biggest single-day inflow since November 7th and that brings total net purchases this year up to 84.9 million ounces.

It should be noted that gold has basically discounted bearish news overnight from Russia where the government has reported November gold production to have increased by more than 12% versus 2018 and that bearish supply news was given further credence by the fact that Russian gold production in the first 11 months of 2019 expanded by 18% over the similar timeframe in 2018.

In short, gold does not appear to be tripped up by casual supply or demand headlines which suggest that longer-term investment might still be flowing to the market.

Seeing the Dollar "trend lower" appears to be adding fire to the palladium market which at times on Monday had gains in excess of $78.00 and that should help support gold and silver prices.

It should also be noted that grains also rallied aggressively, energies made new highs for the move and copper remains strong. There is fresh talk that the BOJ might be poised to provide further stimulus and therefore a measure of commodity reflation is justified.

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Gold positioning in the Commitments of Traders for the week ending December 10th showed Managed Money traders net sold 29,401 contracts and are now net long 197,454 contracts. Non-Commercial & Non-Reportable traders reduced their net long position by 28,767 contracts to a net long 302,434 contracts.

We would also note that the gold market has seen a slight breaking up of the consistent inflow pattern to gold ETF's, and the trade has also been presented with negative Indian wedding season demand headlines. Furthermore seeing domestic gold premium prices in India return to discount pricing countervails the jump in India in November gold imports.

On the other hand, Indian buyers seem to be price-sensitive as the November lows did coincide with the jump in imports. It should also be noted that the Indian rupee has managed to gain ground over the last 30 days and the dollar is showing signs of entering a down trend and that could provide the bull camp with a supportive currency-related focus ahead.

In the meantime, risk on from equities should thicken resistance and increase the allure of consolidation support down around $1,463.

Clearly, the silver market has seen only limited benefit from the improvement in global economic psychology with the low to high bounce last week amounting to only $0.62 compared to the November through December wash of $1.80!

Silver positioning in the Commitments of Traders for the week ending December 10th showed Managed Money traders were net long 29,957 contracts after decreasing their long position by 14,985 contracts. Non-Commercial & Non-Reportable traders net sold 12,916 contracts and are now net long 62,773 contracts.

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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 Financial Services LLC, unless otherwise expressly noted.

U.S.-China trade deal speculation, impeachment proceedings, a major election in the UK, Fed and ECB policy decision all exerted various levels of influence on the precious metals.

There was much speculation about a trade deal this week as the clock ticked down toward the December 15 deadline for additional tariffs. By Thursday there were reports that a Phase 1 trade deal was reached "in principle" and details trickled out on Friday.

According to Reuters, the U.S. will reduce some tariffs in exchange for China purchasing an additional $32 bln of American agricultural products over the next two years. Reportedly China will also buy additional U.S. manufactured goods, energy, and services.

Sounds like quid pro quo to me!

While new tariffs apparently won't be imposed on Sunday, the deal won't be formally inked until early January. A lot can happen over the next three to four weeks...

By a vote of 23-17, the House Judiciary Committee approved two articles of impeachment against President Trump. The full House is expected to approve the articles of impeachment along party lines on Wednesday next week.

At that point, the impeachment moves on to the Senate for trial. I don't know anyone who thinks the Senate will vote to convict and remove the President from office.

In the UK, the conservative Tory party won a sweeping victory based on their pledge to "Get Brexit Done." The Labour Party had its worst showing since 1935! With a strong majority led by Boris Johnson, Brexit is now likely to happen as soon as January 30.

The British pound reached a 19-month high this week, helping to push the dollar to fresh 23-week lows. Dollar weakness helped to keep gold underpinned, even as the good news on the trade front boosted risk appetite.

The resilience of gold this week is encouraging for the underlying uptrend. However, I feel like $1500 needs to be regained to really return confidence to the uptrend. The high from 04-Dec at 1484.07 provides good intervening resistance.

Both the Fed and the ECB held steady on rates in their last meetings of 2019. This was in line with expectations, but the Fed dot plot suggests the Fed is on hold through 2020, even as they remain concerned about the low rate of inflation.

The ECB is apparently on hold through next year as well. In her first press conference, new ECB President Cristine Lagarde emphasized that highly accommodative policy is still needed.

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 Financial Services LLC, unless otherwise expressly noted.

Obviously, US suggestions that a deal has been reached "in principle" has the potential for being a major negative for gold as that would drain safe-haven interest from the market but a lack of confirmation of an impending deal from China has left many market participants skeptical.

Yet another safe haven draining development overnight was the landslide election victory in the UK by the Conservatives which many think will help to speed the UK to an exit.

However, the gold market is possibly deriving support from a significant gap down washout in the dollar with the dollar trading down to the lowest level since the middle of this summer.

While not a significant issue yet we have detected a pattern of gold and silver ETF selling this week and that negative psychology is given added importance following an overnight analyst recommendation for gold and silver ETF holders to purchase put protection. It should also be noted that funds have begun to flow away from mining ETFs and Hong Kong gold prices closed lower overnight.

However, the bear camp needs to be wary of pressing the short side after yesterday's high to low setback of $23, especially with February gold support fairly solid and credible at $1,463. Below that, we're watching $1,456.60 and the November low down at $1,453.10.

Another reason for the bears to be cautious is the very fickle nature of trade negotiations over the past 15 months, with the President's optimism many times misplaced.

While not a driving force in the market today, one might assume that the entrenched down-trending pattern of South African gold production will accelerate in the coming months, as their power problems are structural and seasonal weather ahead is likely to cause further problems.

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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 Financial Services LLC, unless otherwise expressly noted.

"Getting VERY close to a BIG DEAL with China. They want it, and so do we!" - President Trump via Twitter

As it turned out, this time there was apparently some substance behind the optimism. Late in the day, it was reported that President Trump signed off on a Phase 1 trade deal that will avert the additional tariffs that were slated to be imposed on China this Sunday.

According to Bloomberg, terms have been agreed to, but a formal document has yet to be signed. I suppose you can either interpret that as a "done deal,' or there's still a possibility that the deal won't get signed.

Gold retraced nearly all of Wednesday's gains, leaving the yellow metal entrenched in the lower-third of the recent range. That being said, key supports remain protected at this point. Perhaps gold is waiting to see if ink actually makes it to paper or not.

U.S. PPI came in weaker than expected, further highlighting the Fed's expressed concerns about weak inflation. Most notably, annualized core PPI fell to 1.3% from 1.6% in Oct.

It seems the cuts from earlier this year have not been sufficient to stoke inflation. As I suggested in yesterday's post, it strikes me as far more likely that the Fed's next move is another rate cut rather than a hike.

If talk of easier policy starts circulating immediately after the Fed pretty adamantly indicated they were on hold through 2020, gold is likely to catch a bid. However, a rebound above $1500 is needed to return confidence to the underlying uptrend.

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 Financial Services LLC, unless otherwise expressly noted.

In a strange twist, it should be noted that the South African mining index reached an 11 year high and that price action was achieved in the face of further evidence of contracting South African production in both PGM's and gold. In fact, total South African mining output declined by 2.9% in October with gold output declining by 1.2% in October versus year-ago levels.

South African gold output for September was revised to even lower levels. As indicated yesterday, power generation has recovered but the utility infrastructure remains precarious and further rolling blackouts are likely as load factors rise along with seasonal temperatures.

Certainly, the gold and silver markets will be sensitive to the question of trade with China overnight refusing to comment on possible retaliation if the weekend tariffs from the US are invoked.

The gold market might also see some reaction from the UK parliamentary election with conservative leads in the polls narrowed just ahead of the beginning of the vote. We see a conservative victory as slightly bearish to gold as that could facilitate a quicker end to the exit thereby removing a global economic uncertainty. Obviously, a labor win or a hung parliament would stoke uncertainty again and support gold.

In looking ahead we see very little reaction to this morning's US PPI readings unless the headline reading posts a figure above 0.3%.

In the end, the gold trade appears to think there will not be trade progress this week and that has left the market with a bullish tilt. A downtrend channel resistance line on the February gold charts at $1,481.80 was taken out following the Fed result yesterday and that leaves the technical pattern in favor of the bull camp.

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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 Financial Services LLC, unless otherwise expressly noted.

The Fed held steady on rates as was widely anticipated. The dot-plot suggests the Fed is on hold through next year. Fed Chair Powell said he would not consider raising rates until inflation picks up significantly.

I don't think Powell (or us for that matter) has anything to worry about when you consider the Fed has been trying to stoke inflation for a decade with little to show for it. In my opinion, it's far more likely that the Fed's next move is another rate cut.

There's plenty of smart analysts who believe the whole point of the rate hikes from December 2015 until December 2018 was to give the central bank room to cut when the economy inevitably slowed. They spent some of that ammo with three cuts this year amid trade war worries, leaving them just 150 bps above the zero bound.

With the Fed now out of the way, the focus is squarely on the December 15 deadline for the next round of U.S. tariffs against China. That may, in fact, be the primary reason that gold recovered today.

If history is our guide, you can almost bank on optimistic trade headlines over the next two sessions. However, it becomes a question of the believability of those headlines. At some point, like Peter and the wolf, trade negotiators are going to cry "deal" one too many times.

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 Financial Services LLC, unless otherwise expressly noted.

First and foremost in the bull argument is Goldman Sachs projections that central bankers could take down up to 20% of world gold supply in an effort to diversify from overly large dollar holdings. While some headlines overnight suggested Indian wedding season demand gains were somewhat disappointing, Indian November gold imports actually jumped in a sign that Indian gold jewelers saw the November approach of $1450 as a point to refill their inventories at cheap levels.

In conclusion, the $1450 level is presenting classic consolidation chart support and that level now appears to be seen as value by Indian consumers. It should also be noted that both China and India have seen domestic gold premium readings which we think signals their return to a firm import posture.

However, in the short term, the gold market will fight some modest pressure from restarts of several South African mining facilities which were idled due to power issues.

Another minor negative for gold to start today is a liquidation of 53,325 ounces from ETF holdings yesterday with silver also seeing an ETF holding reduction of 2.33 million ounces.

While prices are likely to see some reaction to today's FOMC dialogue, we doubt there will be any definitive change in US Federal Reserve policy. However, in the event that the Fed floats anything more than passing praise for the US jobs market that could be taken as a sign of a shift back in favor of tightening.

The resiliency of the bull camp in the gold market was present yesterday when the trade spun rumors of a possible delay in tariffs into the storyline that a delay in tariffs would also mean a delay in getting a deal. In other words, seeing the US delay tariffs could put the trade negotiations back into limbo again.

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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 Financial Services LLC, unless otherwise expressly noted.

The Fed is widely expected to hold steady when they announce policy on Wednesday, but last week's NFP print prompted some trimming of expectations for further rate cuts in 2020. It remains to be seen whether those data will illicit more hawkish guidance from the FOMC.

A more hawkish tone from the Fed may spark a further recovery in U.S. yields and the dollar. That, in turn, would likely weigh on gold. Unless escalating trade tensions and U.S. political risks offset those pressures.

That being said, I don't think the Fed will turn overly hawkish on the basis of that one NFP print, particularly in light of ongoing liquidity issues in the repo market. Bond market expert Mohamed El-Erian contends that the "spike in the repo rate come as a surprise to the New York Fed.

"It hasn’t proven to be temporary. It hasn’t proved to be reversible without massive injections of liquidity. Which means that structural issues are playing a role.” – Bloomberg Opinion columnist and chief economic adviser at Allianz SE Mohamed A. El-Erian

So the Fed was caught off-guard by the surge in the repo rate in September and has been reactive rather than proactive ever since. I doubt they'll do anything suggestive of tighter policy until the repo market normalizes.

Power issues in South Africa are providing some limited additional support for gold and a more substantial tailwind for platinum today. The state-owned power utility reportedly cut 6,000 megawatts of power from the grid today, resulting in rolling blackouts that shut down mining operations.

While gold may be garnering some support, platinum surged 3% to new three-week highs. Arguably, platinum should be playing some catch-up with the soaring palladium market as substitution becomes increasingly attractive. However, regulatory uncertainty surrounding emissions has seemingly made auto manufacturers reluctant to make the necessary investments to substitute platinum for palladium.

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 Financial Services LLC, unless otherwise expressly noted.

Citi expects central banks to take down 20% of global gold supply. UBS has predicted $1600 gold next year and a Singapore based fund manager has suggested investors should allocate 10% of $100,000 in investable funds to gold.

While the markets have not paid significant attention to classic supply fundamentals, gold prices should garner some support from worsening power problems at South African mining facilities. Apparently the national electric utility Eskom has been fraught with significant structural problems and the utility has been forced to implement rolling blackouts which in turn has forced mining companies to shutter production. In fact, the most recent cut back was a record reduction from the utility which they indicate was necessary to prevent a total collapse of the grid following several different plant failures.

At first blush, one could interpret the overnight US/Chinese trade headlines as supportive of gold as the US appears to have pressed China for "movement/action" ahead of the tariff deadline this Sunday. Certainly, the ultimate "risk-on" event is some form of phase 1 trade deal between the US and China, and therefore it is logical to assume some twists and turns in the trade situation into the next flashpoint of December 15th.

Therefore, the bear camp has to be somewhat cautious pressing the short side, especially with gold respecting consolidation support on a number of occasions over the last four weeks. In fact, a negative trade headline now could instantly throw February gold right back up to last week's consolidation which begins at $1,478.

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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 Financial Services LLC, unless otherwise expressly noted.

As I noted in Friday's post, gold is actually displaying some resiliency in the face of a pretty strong jobs number. Persistent trade uncertainty may be providing some support, or the market may just be waiting for the Fed's take on that NFP print.

The Fed's 2-day FOMC meeting begins tomorrow and policy will be announced on Wednesday, along with the central bank's economic projections. While the Fed was not expected to move on rates this month, it seems the jobs data may warrant at least a tweak to guidance.

While the dollar popped on Friday as hopes for further Fed rate cuts in 2020 dimmed, it has been unable to sustain those gains thus far. Continued softness in the greenback within the range, provides some underpinning for gold.

The ECB will also announce policy this week. While they are likely to hold steady on rates, look for Lagarde to reaffirm the easing bias evident since the restart of asset purchases in November.

There's also a lot of focus in the market on a December 15 deadline, when President Trump may institute additional tariffs on $156 bln in Chinese exports. There is some sense that last week's jobs data gives Mr. Trump some additional leverage, given that the positive U.S. economic news preceded today's report that Chinese exports declined for a fourth consecutive month in November.

Palladium extended to the upside today to satisfy our long-standing measuring objective at 1895.15, notching a record high just shy of 1900.00. While the market is overbought, the fundamentals remain broadly supportive with the psychologically important $2000 level looking increasingly attractive.

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 Financial Services LLC, unless otherwise expressly noted.

In other words, the looming December 15th tariff deadline appears to be hastening discussions. Obviously, the much better than expected US nonfarm payroll reading last week reduces market uncertainty and that combined with better German exports overnight keeps last week's risk-on vibe in place.

Countervailing the positive US and German economic news is the fact that Chinese November exports declined but fear of slowing in China was offset by the fact that imports were positive. In total the economic view toward the world continues to improve and that should provide a cap over gold and silver prices.

Certainly, the gold market could draft some support from what was reported to be large protests in Hong Kong on Sunday, but it can take two or three days to fully factor in surprising strong US nonfarm payroll readings and therefore February gold is probably headed back down to consolidation support of $1,459.10, and March silver is likely to extend its downside breakout to the next lower support level of $16.43.

Fortunately for the bull camp, the net spec and fund long in gold has been coming down consistently from a 2019 high of nearly 500,000 contracts but we would suggest the market remains vulnerable until the net spec and fund long falls below 290,000 contracts.

It should be noted that Goldman Sachs has told investors to diversify some long-term bond holdings with gold because they believe "fear-driven demand" will surface for gold.

The silver market appears to have significant damage on its charts and appears to be headed back to the early August lows with almost no visible benefit off the better economic vibe put in place at the end of last week. Even the dollar looks to exert more pressure on gold and silver this week as the ultra-strong US nonfarm payroll reading and lower Chinese overall monthly export figures probably facilitate capital flow into the dollar.

The December 3rd Commitments of Traders report showed Gold Managed Money traders are net-long 226,855 contracts after net buying 21,221 contracts. Non-Commercial & Non-Reportable traders were net long 331,201 contracts after increasing their already long position by 25,855 contracts.

The December 3rd Commitments of Traders report showed Silver Managed Money traders net sold 3,957 contracts and are now net long 44,942 contracts. Non-Commercial & Non-Reportable traders net bought 258 contracts and are now net long 75,689 contracts. On Friday gold ETF holdings declined by 322,734 ounces with silver holdings declining by 1.1 million ounces.

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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 Financial Services LLC, unless otherwise expressly noted.

The U.S. Department of Labor reported that payrolls surged 266,000 in November, well above market expectations of 184,000. October's figure was revised higher from 125,000 to 156,000. The unemployment rate ticked lower to 3.5%.

Stocks rallied on the news with both the DJIA and S&P500 posting gains greater than 1%. Fed funds futures tumbled reflecting dimmed expectations of another rate cut any time soon, which sparked a bounce in the dollar.

Gold fell more than $16 (1.1%) on Friday, but the low end of the recent range remains protected at this point. Supports to watch are at 1450.05 (26-Nov low) and the range low at 1445.62. I feel that $1500 must now be regained to return confidence to the underlying uptrend.

Spot Gold Daily Chart

All in all, gold didn't fair too badly today; displaying a modicum of resilience in the face of a pretty sizable upside data beat. Silver, however, was not so fortunate and considerable damage has been done to the technical picture.

Spot Silver Daily Chart

The next support level to watch is the 16.34 Fibonacci level (61.8% retracement level of this past summer's impressive rally from 14.29 (28-May low) to 19.65 (04-Sep high). The rising 200-day SMA comes in at 16.23.

At this point, a move back above $17 is needed to ease pressure on the downside. It would take an even bigger retracement to even start thinking about the high end of the three-year range at 21.13. This level is now well protected by the September high at 19.65.

Spot Silver Monthly Chart

While I'm not feeling outright bearish on silver, today's price action within the context of the above monthly chart reflects why it's pretty difficult for me to be bullish. The marked rebound in the gold/silver ratio to a 15-week high is another reason why I'm not terribly enthusiastic about silver.

Next week the U.S. economic calendar features CPI (+0.2% expected), PPI (+0.2% expected), and Retail Sales (+0.5% expected. Most importantly the Fed will hold their 2-day FOMC meeting. While the Fed is likely to hold steady on policy, Friday's robust jobs data may factor into guidance.

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 Financial Services LLC, unless otherwise expressly noted.

However, the gold market is also facing the prospect of a positive nonfarm payroll reading from the US which is expected to show a fairly healthy increase and even a slightly lower than expectations reading should lead to economic confidence.

Yet another negative for gold comes from what appears to be a contradictory headline to recent news flow with Indian government-connected sources suggesting gold imports in November might have declined by 19% versus year-ago levels. However, the November imports were still markedly larger than the imports seen in September and October and the trade has not been as intensely focused on physical demand as it has been on the prospect of safe-haven demand.

Clearly US data yesterday tamped down economic uncertainty and given that Thursday's data was heavily jobs related data that could mean positive jobs data today might unleash a wave of selling in gold and silver. Traders might consider the purchase of near-to-expiration, just out of the money January gold puts.

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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 Financial Services LLC, unless otherwise expressly noted.

U.S. nonfarm payrolls for November will be reported tomorrow morning with expectations running at +184k. The unemployment rate is expected to hold steady at 3.6%.

There is perhaps some downside risk for the headline number in the wake of yesterday's rather significant miss on the ADP employment survey. The ADP survey came in at just +67k, well below expectations of +140k, versus a negatively revised +121k in October (was +125k). That's the fewest number of job gains in six-months.

The market seems to be disregarding Nancy Pelosi's announcement today that the House will proceed with articles of impeachment against President Trump. While the House is likely to impeach on a party-line vote, the odds of a Senate conviction remain pretty long.

There's not much new on the trade war front, although the House passed another bill that the Chinese view as meddling in their internal affairs. The legislation condemns Beijing's crackdown on the Muslim Uighur minority in Tibet and Xinjiang.

This bill comes a week after the U.S. House passed legislation in support of pro-democracy protesters in Hong Kong. President Trump signed this bill and I presume he will sign the Uighur legislation as well, which arguably further deteriorates the likelihood of a trade deal.

Markets have been paying an inordinate amount of attention to the ebb and flow of trade deal odds. If those odds are seen as getting longer, gold should garner further support.

A short-term breach of resistance at 1486.93/1488.10 is needed to bolster confidence in the underlying uptrend. This level is marked by the 100-day SMA and 38.2% retracement of the decline off the September high.

A nonfarm payrolls miss tomorrow could trigger such a move, as could more pessimism on the trade front.

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 Financial Services LLC, unless otherwise expressly noted.

On one hand, China indicates that tariff rollbacks are a necessary component of a phase I deal but at the same time they are warning the US against meddling in their domestic affairs. It should be noted that the US House passed the Xinjiang Bill and that clearly meddles in Chinese affairs.

The US President, on the other hand, indicated the talks are at a "critical stage" and therefore there is no shortage of trade headlines but so far they have been countervailing. In an ongoing supportive storyline buyout/mergers continue in the gold mining industry with market analysts indicating the flurry of activity is at some of the highest levels since the turn-of-the-century.

In a minimally positive development, gold ETFs added 26,971 ounces to their holdings yesterday but net purchases this year remain below 10 million ounces. Silver ETF's reduced their holdings by 1.38 million ounces for the third straight day of declines.

While February gold reached up to the highest level since November 7th yesterday, the market was unable to hold that rally and at times prices traded more than $10 an ounce below the morning high in a fashion that undermines this week's initial bullish bias.

Furthermore, gold prices were not able to remain firmly bid in the wake of a series of disappointing US scheduled data points yesterday. In fact, we would have expected disappointing US data yesterday (particularly from the job sector) would have put the gold market into a fresh upward trajectory because of fresh concern of a soft monthly payroll report Friday.

Instead, safe haven interest was knocked down by the positive vibes being thrown off by equity market gains which in turn were inspired by unidentified Administration comments that a lack of urgency in trade talks should not be taken as a sign that the talks have stalled.

Adding into the disappointing condition for the bull camp this morning is the fact that the gold market has not been supported by a third bullish brokerage firm gold price forecast in the last 24 hours with the latest forecast projecting $1,600 gold pricing next year.

Another supportive development for gold earlier this week came from the Polish central bank governor's suggestion that his bank should increase their gold holdings as a percentage of total reserve holdings from 10% to 20% as that provided the second positive central bank gold story of the week.

In the short term, the ebb and flow of trade headlines will prompt two-sided volatility with temporary sideshows created by US scheduled data.

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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 Financial Services LLC, unless otherwise expressly noted.

At this point, downticks back within the range have been pretty limited and gold remains higher on the week, but clearly still within a corrective phase of the longer-term uptrend. 

Spot Gold Weekly Chart

Sadly it seems that a trade deal is the only thing the market is focused on. In reality though, there are plenty of bullish fundamentals underpinning the market.

Central bank gold demand – associated to a large degree with reserve diversification away from the dollar and U.S. Treasuries – is one pretty significant factor. And as Mark O'Bryn of GoldCore pointed out in a blog post, repatriation and movement of bullion to safer jurisdictions are also evidence of a burgeoning new "global gold rush."

The continuation of easy global monetary policy highlighted recently by three Fed rate cuts is another at the top of the list. Meanwhile, the pile of global debt with a negative yield continues to grow and is approaching $20 trillion!

That means investors who hold that debt to maturity are guaranteed a loss. Many of course own this debt in anticipation of further weakness in yields (increases in bond prices). This is reflective of a global flight to safety; and of course, gold is arguably to the safest of the safe-haven assets.

Total global debt surged $7.5 trillion in H1 2019 to a new record in excess of $250 trillion. The global debt to GDP ratio is now around 320%!

Stunningly, the conversion in capitols the world over is that the answer to the staggering pile of debt is more debt, as proponents of Modern Monetary Theory (MMT) gain traction with politicians reluctant to initiate meaningful fiscal reforms.

The U.S. budget deficit for 2019 surged 26% to $984 billion, the highest in seven years. The deficit is expected to reach $1 trillion in fiscal year 2020.

This has driven the U.S. national debt over $23 trillion. Factor in various unfunded government mandates and the reality is more than 3 times that number, even as numerous presidential candidates pledge more "free stuff."

Where does it all end? I fear it ends in another financial crisis; one bigger and badder than the last.

While many clearly learned nothing over the past decade, there are a few of us that have continued stacking physical gold and silver in anticipation of the next day of reckoning.

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 Financial Services LLC, unless otherwise expressly noted.