Commentary for Friday, Jan 10, 2025 – Today gold closed up $24.70 at $2708.50, and silver closed up $0.30 at $31.09. The bulls may be winning this tug of war going into next week as gold topped $2700.00 in the early trade then dipped, challenging session lows of $2665.00 before surging higher and closing the day strongly in the green. Which reminds me of the classic rocking horse pattern. Testing support at session lows is not a big deal because the price of gold seems to shake off bearish news and favor the higher end of its recent trading range. This solid Friday close may be the combination of safe haven demand created by uncertain Trump tariff policy, momentum follow through after Thursday’s strong close, and a technical picture which favors gold and silver. It is worth noting however that gold has tested overhead resistance at $2700.00 three times since November and failed on each attempt, which suggests the path to higher prices will remain rocky and subject to price reversals. Last Friday gold closed at $2645.00 / silver at $29.81. On the week gold closed higher by $63.50, and silver closed higher by $1.28.
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 the price of gold is struggling with the “what if” scenario as it moved to highs of $2650.0 before dipping to session lows of $2615.00, finishing mid-range by the close. The first plus here is that gold held above $2600.00 as the Dollar Index came off highs. The second plus is that safe haven demand will support these higher prices in the short term as Trump takes another look at tariffs. The third plus is that geopolitical tension supports safe-haven demand. The fourth plus is that The World Gold Council cites increased buying by world central banks for 2024. The fifth plus is that according to Ernest Hoffman (Kitco) – “After gaining nearly 30% in 2024 – outperforming every commodity and all but a handful of assets – gold prices are still inspiring confidence among many industry experts, while most retail traders see the yellow metal breaking above $3,000 per ounce in 2025.” You would think that $3000.00 gold is a cinch this year.
And it may well be, but traders are growing cautious at these higher numbers for two reasons. The first reason is that investors may not see the interest rate decline they had anticipated. The second reason is that gold rose 26% last year, and for many longer term investors that number is dramatically higher so we are facing a classic case in which investors may take profits.
Reuters (Anjana Anil) – Gold prices dip as yields rise, market girds for US economic data – “Gold prices fell on Monday as U.S. Treasury yields rose, while the Federal Reserve’s recent hint at a slower pace of rate cuts in 2025 kept investors keenly awaiting a slew of economic data due this week to shed more light on that view. Spot gold fell 0.3% to $2,632.47 per ounce by 9:55 a.m. ET (1455 GMT). U.S. gold futures were down 0.4% at $2,644.50. “Bond yields are back up again, placing pressure on gold,” said Nitesh Shah, commodity strategist at WisdomTree. Yield on the 10-year U.S. Treasury Note rose to an over one-week high, making non-yielding gold less attractive. “We expect a $3,050/oz by the end of the year based on a ‘consensus’ economic view of dollar depreciation and falling bond yields. Further escalation in tension in the Middle East could drive upside risk to our forecast,” Shah said. The Fed’s latest projections in December implied a shift to a more cautious pace of rate cuts this year, with the majority of the policymakers expressing concern that inflation could reignite. The central bank may need to keep rates higher for longer to address persistent inflation, which remains above its 2% target. U.S. President-elect Donald Trump takes office on Jan. 20, and his proposed tariffs and protectionist policies are expected to stoke further inflation. “There’s speculation that Trump is going to pull back on tariffs… If (the prices of) commodities go up, inflation’s going to remain higher for longer,” Phillip Streible, chief strategist at Blue Line Futures. Gold slid despite the dollar index slumping 1%, down from a more-than-two-year high on Thursday. Market participants now look to the U.S. jobs report on Friday, which could help illuminate the Fed’s policy path. Investors are also awaiting job openings data on Tuesday, ADP employment numbers and the minutes from the Fed’s most recent policy meeting on Wednesday. Spot silver gained 1.2% to $29.97 per ounce, platinum rose 0.3% to $941.01, and palladium added 0.5% to $927.21.”
On the day gold closed down $6.60 at $2638.40, and silver closed up $0.53 at $30.34.
On Tuesday the price of gold was choppy, first rising to session highs ($2665.00) on news that China has renewed its central bank buying. But this bullish sentiment cooled, and gold finished the day only mildly in the green after the most recent Purchasing Managers Index pointed toward economic growth. While gold’s technical picture favors the bulls its inability to regain $2720.00 high made in Dec 2024 implies that traders remain cautious of these higher numbers. Whether this caution will delay the Goldman Sachs forecast of $3000.00 gold remains to be seen.
Reuters (Anjana Anil) – Dollar weakness propels gold 1% higher, US data in focus – “Gold prices climbed 1% on Tuesday, helped by a fall in the U.S. dollar and as China’s central bank added to its gold reserves for a second straight month, while the market awaited U.S. economic data to gauge the Federal Reserve’s policy path. Spot gold was up 0.9% at $2,659.29 per ounce, as of 9:53 a.m. U.S. gold futures rose 1% to $2,673.00. “The dollar is off its highs, which is helping gold,” said Daniel Pavilonis, senior market strategist at RJO Futures. The U.S. dollar index was close to a one-week low following a Washington Post report that suggested President-elect Donald Trump’s tariff policies will not be as aggressive as promised, which Trump later denied. “The caveat is waiting for the new administration to take over…The outlook for stickier inflation is still prevalent, and that coupled with all of the external political issues going on is still keeping the precious metals markets elevated,” Pavilonis said. Uncertainty surrounding the tariff policy in the run up to Trump’s inauguration on Jan. 20 has fueled concerns about future moves in U.S. policy. Investors have been pricing in a scenario where proposed tariffs could inflame U.S. inflation, limiting the Fed’s ability to cut rates and thereby pressuring gold. While bullion is considered a hedge against inflation, high rates reduce the non-yielding asset’s appeal. Traders await Friday’s U.S. jobs report for policy clues, along with job openings data due later in the day, ADP employment and the minutes from the Fed’s December meeting on Wednesday. Meanwhile, China’s central bank added gold to its reserves in December for a second straight month, following a resumption in November after a six-month hiatus, official data showed. “(China’s purchase is) a development likely to lend continued support to the precious metal’s price,” said Evangelista, analyst at ActivTrades. Spot silver gained 1.1% to $30.29 per ounce, platinum added 2.4% to $950.23, and palladium rose 0.6% to $925.57.”
On the day gold closed up $18.30 at $2656.70, and silver closed up $0.11 at $30.45.
On Wednesday the price of gold opened choppy but quickly moved to session highs of $2665.00 even as the Dollar Index moved back to weekly highs. Just as quickly gold moved to session lows around $2650.00, recovered, and finished mildly in green on the day. The ADP news that weaker employment suggests the economy continues to slow initially pushed gold higher and bolstered bullish sentiment. Still, higher gold prices are a tough nut in my opinion because conviction on either side of the bullish / bearish question remains weak. Those who are worried about Trump and his geopolitical policies expect a higher inflation scenario. Moderate investors believe that the economy is slowing and anticipate lower interest rates but are uncertain as to the timeframe. Without conviction on either side, we continue with a “push/pull” trade. Both sides are looking for short to medium term data which might tip the scale in their favor.
Reuters (Anjana Anil) – Gold climbs after weaker-than-expected private payrolls data – “Gold prices rose on Wednesday to hit a near four-week high after a weaker than expected private employment report for December provided reassurance for some in the market the U.S. Federal Reserve may be less cautious about easing rates this year. Spot gold rose 0.5% to $2,663.79 per ounce, as of 9:55 a.m. ET (1455 GMT) and hit its highest since Dec. 13. U.S. gold futures gained 0.5% to $2,679.70. Weaker private payrolls “is contributing to gold’s move, because ultimately, weaker employment numbers imply that the economy has been weaker than many had expected,” said Bart Melek, head of commodity strategies at TD Securities. The ADP National Employment report showed the U.S. economy added 122,000 jobs in the private sector last month, compared with economists’ estimate of a rise of 140,000. A separate Labor Department report showed jobless claims stood at 201,000 in the previous week, lower than estimates of 218,000. “The bigger factor will be U.S. nonfarm payrolls on Friday, the market is expecting a change of 163 (thousand); anything significantly above that will be negative for gold,” Melek said. Markets are awaiting minutes from the Fed’s December meeting due later in the day, and U.S. non-farm payrolls on Friday. “I don’t think the minutes today will have much impact given the uncertainty of the new administration’s policies and the clear indication last month that Fed has moved into another, more moderated, phase of its easing,” said Tai Wong, an independent metals trader. Investors have been considering a scenario where proposed Trump tariffs could rekindle U.S. inflation, limiting the Fed’s ability to cut rates and thereby pressuring gold. However, Fed governor Waller said inflation should continue to fall in 2025 and allow the central bank to further reduce interest rates, though at an uncertain pace. Bullion is considered an inflationary hedge, but high rates reduce the non-yielding asset’s allure. Spot silver added 0.7% to $30.20 per ounce, platinum fell 0.2% to $948.58, palladium lost 0.9% to $917.65.”
On the day gold closed up $7.80 at $2664.50, and silver closed unchanged at $30.45.
On Thursday the price of gold rose to $2677.00. Pushed by fresh safe haven demand and financial problems in the United Kingdom. Traders initially sold this attempt to break into higher ground by then dipping to session lows of $2663.00. And then in usual fashion gold surprised even the bulls by a surprisingly strong close of $2683.80. And finally dipping $13.00 in the aftermarket as even professionals wondered about these rather dramatic swings in pricing.
Gold’s technical picture favors the bulls but there is solid resistance at $2700.00. Today’s trading pattern suggests that gold will see new highs in 2025, given interest rates continue to trend lower. And the FOMC remains dovish concerning its interest rate policy. Even given today’s roller coaster ride in prices our customers are waiting for the next FOMC interest rate assessment.
Reuters (Anushree Ashish Mukherjee) – Gold hits four-week peak on safe-haven demand – “Gold prices rose to a near four-week high on Thursday, supported by safe-haven demand, while investors weighed how U.S. President-elect Donald Trump’s policies would impact the economy and inflation. Spot gold inched up 0.4% to $2,672.18 per ounce, as of 0918 a.m. ET (1418 GMT). U.S. gold futures rose 0.7% to $2,691.80. “Safe-haven demand is modestly supporting gold, offsetting downside pressure coming from a stronger dollar and higher rates,” UBS analyst Giovanni Staunovo said. The dollar index (.DXY) hovered near a one-week high, making gold less appealing for holders of other currencies, while the benchmark 10-year Treasury yield stayed near eight-month peaks. “Market uncertainty is likely to persist with the upcoming inauguration of Donald Trump as the next U.S. president,” Staunovo said. Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries, CNN reported on Wednesday, citing sources familiar with the matter. Trump will take office on Jan. 20 and his proposed tariffs could potentially ignite trade wars and inflation. In such a scenario, gold, considered a hedge against inflation, is likely to perform well. Investors’ focus now shifts to Friday’s U.S. nonfarm payrolls due at 08:30 a.m. ET for further clarity on the Federal Reserve’s interest rate path. Non-farm payrolls likely rose by 160,000 jobs in December after surging by 227,000 in November, a Reuters survey showed. Gold hit a near four-week high on Wednesday after a weaker-than-expected U.S. private employment report hinted that the Fed may be less cautious about easing rates this year. However, minutes of the Fed’s December policy meeting showed officials’ concern that Trump’s proposed tariffs and immigration policies may prolong the fight against rising prices. High rates reduce the non-yielding asset’s appeal. The World Gold Council on Wednesday said physically backed gold exchange-traded funds registered their first inflow in four years. Spot silver rose 0.7% to $30.32 per ounce, platinum fell 0.8% to $948.55, and palladium shed 1.4% to $915.75.”
On the day gold closed up $19.30 at $2683.80, and silver closed up $0.34 at $30.79.
On Friday the price of gold moved towards $2700.00, a bullish plus which will encourage the rank and file. This plus centers around the notion that Trump policies will eventually turn inflationary. But I would not get too carried away with this still developing theory. They do create tension but rising inflation would mean the Fed will keep interest rates higher for a longer period. And a hawkish Fed is not good for a healthy and growing economy. Stick with the most current Fed assessment – we have the soft handing everyone wanted. While Trump may take credit it was the strong leadership of FOMC Chief Jerome Powell that really deserves the tip of the hat. Across our trading desk volume numbers moved higher today but not by a large amount. It is important to keep in mind that gold is now only 3.5% below all-time highs and there is a definite lack of physical sellers. Which favors the long term picture in my mind. Finally, Ernest Hoffman (Kitco) – University of Michigan preliminary Consumer Sentiment is 73.2 in January, as inflation expectations spike higher.
Reuters (Ashitha Shivaprasad – Daksh Grover) – Gold rebounds on Trump policy uncertainty despite robust US jobs data – “Gold prices rebounded on Friday as uncertainty surrounding the incoming Trump administration’s policies lifted safe-haven appeal, even as a stronger-than-expected U.S. employment data reinforced expectations the Federal Reserve might not cut interest rates as aggressively this year. Spot gold was up 0.6% to $2,685.38 per ounce as of 9:40 a.m., while U.S. gold futures rose 1.3% to $2,726.10. Gold prices briefly slipped to $2,663.09 an ounce after data showed the U.S. added 256,000 jobs last month, compared with economists’ estimate of a rise of 160,000. The unemployment rate stood at 4.1%, compared with a forecast of 4.2%. Bullion prices, however, quickly rebounded and are now trading near their highest levels since Dec. 13, poised for a weekly gain of more than 1%. “Gold’s price action points to a lack of committed sellers of the metal; a diffidence well-learned from last year’s remarkable rise,” said Tai Wong, an independent metals trader. “The momentum from the knee-jerk reaction faded quickly and the short-term traders and programs that sold reversed quickly.” The dollar rallied while U.S. stock futures fell sharply after the jobs data. Markets show traders now expect the Fed to cut interest rates by just 30 basis points over the course of this year, compared with cuts worth about 45 basis points before the data. “Gold is still acting resilient in the face of a much stronger-than-expected jobs report … One of the factors that’s been supporting gold is this uncertainty that we’ve seen going into the (U.S. presidential) inauguration,” said David Meger, director of metals trading at High Ridge Futures. As President-elect Donald Trump’s Jan. 20 inauguration approaches, investors are anxious about his vow to impose tariffs on a wide range of imports, fearing they could fuel inflation and further limit the Fed’s ability to lower rates. While bullion is prized as a safeguard against inflation, high interest rates dull its allure as a non-yielding asset. Spot silver gained 1% to $30.43 per ounce, platinum firmed 0.7% to $964.90, and palladium added 2.5% to $949.25. All three metals were headed for weekly gains.”
On the day gold closed higher by $24.70 at $2708.50, and silver closed up $0.30 at $31.09.
Platinum closed up $11.80 at $982.10, and palladium closed up $37.80 at $961.70.
Jim Wycoff (Kitco) – “Technically, February gold futures bulls have the firm overall near-term technical advantage and have momentum. 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 the December low of $2,596.70. First resistance is seen at today’s high of $2,735.00 and then at $2,750.00. First support is seen at $2,700.00 and then at the overnight low of $2,686.90. March silver futures bulls have gained the overall near-term technical advantage and also have momentum. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $32.50. The next downside price objective for the bears is closing prices below solid support at $30.00. First resistance is seen at today’s high of $31.84 and then at $32.00. Next support is seen at $31.00 and then at today’s low of $30.70.”
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