Commentary for Friday, Jan 17, 2025 (www.golddealer.com) – Today gold closed down $2.10 at $2744.30, and silver closed down $0.57 at $30.95. The good news this week was that traders pushed gold to 4 month highs on Thursday, ($2746.40) which is only 2.6% below all-time highs. The bad news is that paper traders sold this rally in the aftermarket yesterday and in the cash market this morning, pressuring gold lower as traders took profits. Still on the day gold recovered and was off only off $2.10 on the day, bolstering bullish sentiment. Most physical bullion players see higher gold and silver in the longer term. But today it’s easy to get a sense of that problematic overhead resistance shelf. You are likely to see this dynamic again soon as the Fed interest rate policy appears to be undecided. Creating more crosswinds in the bullish/bearish tug of war is how investors will react to President Trump. It is not clear if his policies will create inflationary problems, but investors seem willing to wait and see. Expect more volatility but consider the opportunities which might be created using the “gold to silver ratio” theory. Just a reminder that Golddealer.com will be closed this Monday, Jan 20th for Martin Luther King Jr. Day. Last Friday gold closed at $2708.50 / silver at $31.09. On the week gold closed higher by $35.80, and silver closed up $0.14.
Please note that FedEx is no longer asking for delivery signatures. They are scanning IDs. We have complained to FedEx, but they remain resolute. Scanned identification is safer, but if you have a problem with this decision, please make your feelings known to FedEx. Unfortunately, the present delivery time for the USPS alternative is 2-3 weeks.
Should you decide to use our Delayed Delivery Program please talk with your service rep and understand how this program works. It is handy if you want to lock in the price “now” and insist on a new product – but is not for everyone. Just like us – you must pay upfront to “lock in” prices and you can’t “change” your mind. So, unless God has blessed you with patience, please ask your rep for other options and thank you for understanding.
On Monday traders reacting to a stronger dollar quickly pushed prices to session lows ($2655.00). Obviously not an encouraging day for the bulls and may portend further weakness depending on near term Fed action. There are other forces at work this morning which discourage bullish sentiment in the short term. Follow through selling as traders took advantage of the $63.50 rise in prices last week comes to mind. There is also the notion that CPI numbers last Wednesday suggest that inflation will remain higher for longer. Weakening the case for early interest rate cuts by the Fed this year. Also worth noting is that since last Nov gold has tried to break above $2700.00 and failed on three occasions, so overheard resistance remains daunting. Finally, any significant push towards $2600.00 gold may induce further profit taking.
On the plus side of the bullish ledger is the notion that Trump’s presidency may turn inflationary if he follows through on the possibility of tariffs. I’m not a big fan of this theory and while all of this sounds threatening waiting out this turbulence makes sense. As I said last week this looks like a “rocking horse market” which assess inflation and interest rates in the short term. Keeping the longer term in mind has always made more sense in the physical bullion market.
Reuters (Anjana Anil) – Gold drops 1% as robust US jobs data strengthens dollar – “Gold prices dipped on Monday as the U.S. dollar soared to an over two-year high after a robust jobs report last week cemented expectations the Federal Reserve will proceed with caution with cutting interest rates this year. Spot gold fell 0.7% to $2,670.86 per ounce as of 10:00 a.m. ET (1500 GMT), after dropping as low as 1% earlier in the session. Prices hit their highest in a month on Friday. U.S. gold futures were 0.9% lower at $2,689.80. “We had a better than expected U.S. job report which strengthened the U.S. dollar and the Treasury yields…(Gold’s) move lower here is some follow through on the stronger than expected report,” said Bob Haberkorn, senior market strategist at RJO Futures. There is also some profit-taking after gold had a great week last week, Haberkorn added. The Dollar Index rose to its highest since November 2022 after the U.S. jobs report underscored the strength of the economy and muddied the Fed outlook. A higher dollar makes bullion more expensive for overseas buyers. Trump will be sworn in as president of the U.S. next week. His proposed tariffs and protectionist trade policies are expected to be inflationary and could spark trade wars, adding to gold’s allure as a safe-haven asset. Investors now await U.S. inflation data, weekly jobless claims and retail sales this week for further insights into the economy and the Fed’s policy plans. “Should CPI inflation data on Wednesday show signs of persisting, any calls for a rate cut in the first half of the year will be firmly dismissed again,” Fawad Razaqzada, market analyst at City Index and FOREX.com, wrote in a note. Currently, markets expect 25 basis points cut this year, compared with expectations of 40 basis points last week. Higher interest rates make the non-yielding bullion less attractive. Spot silver fell 2.1% to $29.76 per ounce, platinum dropped 0.7% to $958.40, and palladium shed 1% to $938.23.”
On the day gold closed down $35.00 at $2673.50, and silver closed down $1.00 at $30.09.
On Tuesday the price of gold was steady, a plus for bullish sentiment considering yesterday’s price drop. The reasoning being that today’s PPI (Producer Price Index) came in a bit cooler than expected. But traders will be keen to see the results of tomorrow’s CPI (Consumer Price Index). The thinking here is that any upward surprise in the CPI would suggest inflation is moving in the wrong direction and reinforce the notion that the Fed will not soon be cutting interest rates. A negative for gold in the short term. While the price of gold has moved lower since the first of the year, investors may find that fresh safe haven demand in the Middle East will refocus bullish sentiment and I’m optimistic enough to be patient. Reasonable crosswinds may slow $3000.00 gold but if the Fed begins to lower interest rates this year you may see fresh recent highs.
Reuters (Anjana Anil) – Gold holds steady with investors cautious ahead of US CPI – “Gold prices held steady on Tuesday as market participants maintained caution ahead of key U.S. inflation data, which could throw further light on the U.S. interest rate trajectory. Spot gold was little changed at $2,663.29 per ounce as of 9:40 a.m. ET (1440 GMT) after briefly rising 0.5% soon after the Producer Price Index (PPI) data. Data showed PPI rose 3.3% on an annual basis in December, versus the 3.4% rise expected by economists polled by Reuters. U.S. gold futures fell 0.1% to $2,676.40. “We’re going to need to see continued progress on inflation in order to bring back those interest rate cut expectations,” said Phillip Streible, chief market strategist at Blue Line Futures. “People are a little bit nervous, and they want to be cautious going into CPI tomorrow,” he added. Investors now await the Consumer Price Index (CPI) on Wednesday to analyze the Fed’s policy path. A Reuters poll forecast an annual rise of 2.9%, versus November’s 2.7%, and a monthly increase of 0.3%. Traders currently see the Fed delivering 29.4 basis points worth of rate cuts by the end of the year, data compiled by LSEG shows. Bullion is considered a hedge against inflation, but higher rates dull the appeal of the non-yielding asset. U.S. President-elect Donald Trump will return to the White House on Jan. 20 and has vowed to impose trade tariffs. Analysts expect these to trigger trade wars and re-ignite inflation. UBS noted that a stronger dollar and elevated U.S. yields will remain headwinds in the first half of this year for gold but should be more than offset by demand for the metal as a diversifier.”
On the day gold closed up $4.00 at $2677.50, and silver closed up $0.04 at $30.13.
On Wednesday the price of gold was volatile. Initially rising to $2695.00 then falling to session lows and again reversing direction, finishing up $35.00 which was session highs of $2795.00. The initial rise in the price of gold was likely a reaction to a weakening dollar and the modest CPI report which suggests that the Fed may continue to favor the dovish side of its interest rate policy. Traders, however, sold this rally as gold approached tough overhead resistance at $2700.00. This suggests that the paper market is still cautious of these higher prices given the rising the crosswinds for gold created by an uncertain Trump presidency, and the notion that the Fed may choose to be less aggressive at lowering interest rates in 2025. Today’s trading pattern suggests underlying strength, and technical experts are looking for a close above solid resistance at the December high of $2761.30. It would appear our shiny friend is at least setting the stage for fresh record highs this year given interest rates continue to trend lower.
Reuters (Anjana Anil – Daksh Grover) – Gold advances as softer core CPI data revives Fed easing hopes – “Gold prices extended gains on Wednesday, as the dollar dipped after U.S. core inflation data came in softer than expected, abating inflation pressures and rekindling expectations that the Federal Reserve’s easing cycle may not be over yet. Spot gold gained 0.4% to $2,688.19 per ounce by 0915 a.m. ET (1415 GMT). U.S. gold futures were up 1.1% to $2,711.40. Excluding volatile food and energy components, core CPI increased 3.2% on an annual basis, compared with an expected 3.3% rise, the U.S. Bureau of Labor Statistics said on Wednesday. “Core CPI came in a little bit below expectations. This is a bit of a positive for gold… The corollary to this is that the Fed will not necessarily exclude the possibility of cutting rates,” said Bart Melek, head of commodity strategies at TD Securities. “The probability of a rate cut in January is kind of nothing, but we are pricing some rate cuts by the end of the year here.” Markets now expect the Fed to deliver 40 basis points (bps) worth of rate cuts by year-end, compared with about 31 bps before the inflation data. The Dollar Index eased 0.4%, making bullion more attractive for other currency holders. The benchmark 10-year Treasury yields also slipped. Investors are worried that the potential for tariffs after President-elect Donald Trump re-enters the White House next week could stoke inflation and limit the Fed’s ability to lower rates to a greater extent. Non-yielding bullion is considered a hedge against inflation, although higher rates diminish its appeal. However, the uncertainties around Trump’s tariffs and trade policies for the global economy and their potential impact on growth are likely to sustain safe-haven demand for gold, said Zain Vawda, market analyst at MarketPulse by OANDA. Spot silver firmed 1% to $30.23 per ounce, platinum rose 0.4% to $938.70, and palladium added 2% to $960.25.”
On the day gold closed up $35.00 at $2712.50, and silver closed up $1.19 at $31.32.
On Thursday the price of gold held to a tight trading range between $2690.00 and $2720.00 in the early trade and the price of silver was choppy between $30.55 and $30.90 which suggests that both were facing important pivot points. As luck would have it for the bulls – prices broke to the upside as gold finished up $33.90 but silver remained lackluster. That is the good news, the bad news is that traders sold both metals in the aftermarket, gold giving up $31.00, and silver losing $0.70. This trading pattern will serve as a lesson to those who believe higher prices for gold and silver are inevitable in a tricky short term market. Investors believe gold and silver will trend higher in the longer term if the Fed continues to lower interest rates. But during this transition period its anyone’s guess. Across our trading desk volume numbers are increasing.
FXEmpire (Christoher Lewis) – Gold Continues to Look at Ceiling – “The gold market continues to see a lot of buying pressure, but at the same time, we are staring down the massive resistance barrier above, and this is an area that we are likely to see a bit of trouble. Technical Analysis – The market in gold seems to be fairly bullish again during the early hours on Thursday, but at this point, we are most certainly testing the top of the overall range, and I think that is something worth paying attention to. If we can break above the $2,720 level, then I would be a little bit more confident about the continuation of the uptrend. Longer term, I do think that probably ends up being the case. But right now, we have to determine whether or not interest rates are going to drop enough to make gold go higher, or perhaps maybe the US dollar will calm down. The geopolitical situation certainly makes a lot of sense for gold to be strong and of course, if you buy gold right now, truthfully, you’re going to get more mileage buying gold against something, you know, like the Australian dollar, the Canadian dollar, Japanese yen, that type of thing, not against the US dollar. But as it is the standard, this is how we measure gold and it looks like we are going to try to break out, but we have to wait and see. Buying here might just simply be a bridge too far and you’d just be chasing the trade. If we get a short-term pullback, I think it’s a very possible setup near the 50-day EMA, and again, at the $2,600 level. I think right now, you still have to look at this as a neutral market that’s just drifted a little higher. Now we have to see if it’s got the momentum to finally get moving. Silver Struggles at the $31 Area – Silver continues to see a lot of noisy trading on Thursday morning, as the market is currently looking to try to build the necessary momentum to break above the $31 barrier, an area that has been troublesome. Technical Analysis – The silver market initially rallied during the trading session on Thursday but has given back quite a bit of the gains as we could not get over that crucial $31 level. If you’ve been following me here at FX Empire, you know I’ve been watching $31 very closely. If we can get above there, then the market could really start to go higher. But as things stand right now, it looks like we’re still struggling with the previous uptrend line. The 50 day EMA sits just below, so that could offer a bit of support. But I think at this point in time, when I look at the precious metals arena, the gold market is probably a little bit more likely to rally than silver. However, if we turn around and break above the $31 level on a close on the daily chart, then I do think silver probably goes looking to the $32.35 cents level. On a pullback, I would suspect $30 be important support and then after that, the 200 day EMA. Keep in mind that interest rates will have a major influence on silver, probably much more than gold and of course, we have the same situation where the silver market is also an industrial metal, and that is going to be something worth watching as well, as whether or not there’s going to be industrial demand. So silver, probably a bit of a laggard in comparison to gold at this point in time.
On the day gold closed up $33.90 at $2746.40, and silver closed up $0.20 at $31.52.
On Friday the price of gold traded between $2700.00 and $2720.00 in the early trade, so it would appear the metals will go into the weekend with little buzz or excitement. Still in this market you never know as traders continue to sell the rallies and buy the dips because they fear gold’s inability to move above tough overhead resistance and hold the gains. Still with many looking for lower interest rates sometime this year I would expect a test of all-time highs in gold. Whether further jumps in the price of gold will hold depends on how much fireworks President Trumps creates with the promised tariff sanctions. He has already threatened Mexico and Canada with 25% levies on everything unless they adhere to his wishes. Reuters also makes a fresh point: Trump will inherit a bigger US debt pile in his second term. That may be an understatement. The debt held by the public through Treasury securities at the end of his first term was $15 trillion, today that number has risen to $28 trillion. You could make the case that this number is arbitrary, and Congress will simply raise the debt limit. But I worry about that Black Swan tipping point; you will never see it coming. My best advice is to hold real money (gold or silver bullion) outside the typical banking system. You will likely never need it but if you did the prices of gold and silver would be turning hyperbolic.
Reuters (Anushree Ashish Mukherjee and Ashitha Shivaprasad) – Gold set for third straight weekly gain, Trump’s policies in focus – “Gold prices eased on Friday but were still headed for a third consecutive week of gains, as U.S. inflation data and dovish comments from a Federal Reserve official revived hopes the central bank might cut interest rates more than once this year. Spot gold was down 0.1% to $2,711.38 per ounce at 1255 GMT. Bullion has gained about 0.8% so far this week. “Persistent uncertainties surrounding 2025 further bolstered the metal’s appeal.”
U.S. data released on Wednesday showed softer than expected core inflation, raising bets on a Fed rate cut, with rate futures traders pricing in nearly even odds of two cuts by year-end. Echoing this sentiment, Fed Governor Christopher Waller said three or four cuts could be possible if U.S. economic data weakens further. Gold is considered an inflation hedge, while lower rates boost the non-yielding asset’s allure. U.S. gold futures were down 0.3% to $2,741.90. “Gold gained support this week, buoyed by weaker-than-expected U.S. economic data, including PPI and CPI figures, alongside dovish remarks from Federal Reserve policymakers,” said Zain Vawda, market analyst at MarketPulse by OANDA. As President-elect Donald Trump’s Jan. 20 inauguration approaches, attention is also centered on his policies, which could stimulate inflation. He has pledged to impose trade tariffs. “While upside risk to inflation increases the prospects of shallower rate cuts, this also means lower or steady real rates which will be supportive for gold investment,” ANZ said in a note. “We expect exchange-traded funds flows to turn positive after three years of consecutive outflows.” Elsewhere, gold discounts in India increased to their widest in six months as a rise in domestic prices dampened demand and jewelers awaited the annual federal budget. Spot silver was down 0.95% to $30.49 per ounce. Palladium added 0.2% to $942.71. Platinum added 1.1% to $945.30 but was set to register its worst week since November.”
On the day gold closed down $2.10 at $2744.30, and silver closed down $0.57 at $30.95.
Platinum closed up $16.80 at $951.10, and palladium closed up $10.20 at $960.50.
Jim Wycoff (Kitco) – “Technically, February gold futures bulls have the overall near-term technical advantage. Prices are trending up on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the December high of $2,761.30. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,650.00. First resistance is seen at $2,750.00 and then at this week’s high of $2,757.90. First support is seen at the overnight low of $2,729.40 and then at Thursday’s low of $2,720.40. March silver futures bulls have the overall near-term technical advantage. Prices are now trending up on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the December high of $33.33. The next downside price objective for the bears is closing prices below solid support at $30.00. First resistance is seen at the overnight high of $31.64 and then at $32.00. Next support is seen at $31.00 and then at $30.50.”
Brothers and Sisters, thank you for your friendship. If you have unusual circumstances, need cash or a special favor – talk to Harry or Eric or Ken Slater. We are now back to our traditional business model. Thank you for your patience. Blessings. Richard Schwary
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