Commentary for Friday, Feb 7, 2025 – Today gold closed up $11.30 at $2867.30, and silver closed down $0.018 at $32.34. The price of gold had another good but volatile week as prices rose initially to session highs of $2885.00 then reversed direction and finally closed only mildly in the green. This back and forth movement is driven by a combination of safe haven demand and short term profit taking. But there are those who believe that traders, in the heat of battle, may have pushed prices too far and too fast. Perhaps suggesting that gold is overbought but this is classic tough calls for several reasons. First, the use of tariffs as an international bargaining tool is tricky. Second, safe haven demand is not likely to move lower despite a large amount of white noise at current levels. And third President Trump loves the “art of the deal” which means it is tough to figure out where he is in his own vision of making things “fair” for all parties. Until these questions are further defined, volatility will continue at the higher end of its current trading range. Last Friday gold closed at $2812.50 / silver at $32.13. On the week gold closed up $54.80, and silver closed up $0.21.
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On Monday the price of gold was off to a good start reaching $2835.00, looking at record prices in the shorter term. But considering the large tariff hammer that Trump is using against friend and foe the bulls may be disappointed that $3000.00 is not immediately in play. The reason being is that both sides of the tariff issue are looking for a workable strategy.
(Reuters) “Trump said his tariffs on the three largest U.S. trading partners might cause Americans some short-term pain, but “long term, the United States has been ripped off by virtually every country in the world”. It is difficult to figure out how much of Trump is bombast and how much is truth. He has proven to be however a master politician and bringing countries around to his way of thinking is an artform.
At the same time, he believes the US is being “ripped off”. This is not a political term; it takes the form of a threat which makes the world uncomfortable. The price of gold today closed up $21.40 at $2833.90. High enough to gain attention but not so high as to create panic. Traders consider this first move at “balancing” the books between trading partners a strategy with an uncertain outcome, so plan accordingly. It’s very important to note that by the afternoon, Trump had delayed tariffs on both Mexico and Canada for 30 days. Something in the way of negotiation is likely going on behind closed doors. The price of gold is down by $18.00 in the aftermarket ($2815.00), so far so good and Trump’s stock is on the rise in this high stakes poker game.
Reuters (Anmol Choubey) – Gold hits record high as Trump tariffs spur safe-haven buying – “Gold prices hit an all-time high on Monday, bolstered by safe-haven inflows after U.S. President Donald Trump’s tariffs on Canada, China and Mexico added to concerns of inflation that would dent economic growth. Spot gold rose 0.6% to $2,816.53 per ounce by 09:38 a.m. ET (1438 GMT), after hitting a record of $2,818.58 earlier in the session. U.S. gold futures rose 0.7% to $2,855.90, trading at a higher premium to spot rates. “It’s the implications of the tariffs… a lot of people believe that this could raise inflation upwards and also impact economic growth because of the higher costs involved with that and tariffs leaving a stagflationary type environment,” said Phillip Streible, chief market strategist at Blue Line Futures. The 25% tariffs imposed by Trump on Canadian and Mexican imports from Tuesday, along with a 10% charge on Chinese goods, fueled fears of a trade war that could slow global growth and feed inflation. Canada and Mexico ordered retaliatory measures while China said it would challenge the tariffs at the World Trade Organization and take unspecified countermeasures. The market is not fully convinced about the extent of the trade war, Bart Melek, head of commodity strategies at TD Securities, said. “We haven’t seen a complete response from gold and if this trade war continues for a considerable period, it could lead to significantly higher gold prices down the road,” Melek added. Gold is often considered as a safe-haven investment during periods of economic or geopolitical instability. J.P. Morgan said bearish contagion from equities could weigh on gold in the near term, but disruptive tariffs were a medium-term bull case for bullion. Investors await data this week on U.S. job openings, the ADP employment report and the U.S. employment report to gauge the health of the U.S. economy. Spot silver rose by 0.1% to $31.33 an ounce, platinum lost 2.2% to $956.45, and palladium was fell 0.3% to $1,005.25.”
On the day gold closed up $21.40 at $2833.90, and silver closed up $0.26 at $32.39.
On Tuesday the price of gold moved higher with authority ($2842.00) and finished solidly in the green. Which reinforces yesterday’s strong move to the upside. What a difference a day makes in these markets. Yesterday the price of gold was stronger because of feared tariffs against Mexico and Canada. Today, these specific tariffs are called “phantoms” because Trump has postponed them for 30 days, apparently working on a deal of some kind.
At the same time, he has ramped up threats against China which will likely support higher prices in gold as this dialogue progresses. Gold’s technical picture remains in the green. Current prices are supported by a weaker dollar as reflected in the Dollar Index which lost a full point today. We see minor selling across our trading desk but buyers far outnumber sellers.
FXEmpire (Christopher Lewis) – Gold Continues to See Buying – “The gold market continues to be very bullish, as the market has now reached a fresh new high. Technical Analysis – Gold markets have rallied a bit during the early hours on Tuesday and now are threatening to break out yet again to new highs. All things being equal, there’s nothing on this chart that even remotely suggests that you should be short of this market. And quite frankly, I think it’s probably only a matter of time before we go much, much higher. In fact, I think we are starting to see the first steps of an attempt to make it to the $3,000 level. I believe that short-term pullbacks will continue to look at the $2,800 level as support, as we saw during the trading session on Monday. I do believe that there will be occasional pullback, and you must look at those as potential opportunities to start buying yet again. After all, gold is in a massive uptrend and that’s been undeniable for a couple of years now, so there’s no real reason to think it’s going to change anytime soon. Political instability, worry about trade wars, and general uncertainty overall will continue to push gold higher over the longer term. Despite the fact that interest rates are higher than usual in the United States, that doesn’t matter. This is not so much about the US dollar correlation as it is the fact that gold is used as safety. I am very bullish about this market going forward. Silver Continues to Threaten a Move Higher – The silver market looks as if it is trying to get to the upside at this point in time but also faces a significant amount of resistance above. Technical Analysis – Silver has initially fallen just a touch in the early hours on Tuesday only to turn around and show signs of strength. It’s worth noting that there is a big pocket of resistance just above, that extends to the $32.35 level. While silver does look extraordinarily resilient at the moment, the reality is that it may not be that easy to get to the $32.35 level. It’s also worth noting that silver has the reputation of being extraordinarily noisy, and I do think that plays out here. I just don’t see a situation where silver has an easy path higher. This is not to say that it won’t go higher. Quite frankly, I think it eventually does, mainly because gold is going to continue to grind to the upside as it will drag silver right along with it. Industrial demand is certainly a major factor here, so that might be part of why silver is a laggard, but also, silver is not as much of a precious metal trade as gold is anymore. And I do think that is something that we need to keep in mind. Buying on the dips more likely than not will end up being buying opportunities for longer term traders as well as short term scalpers. The 50 day EMA sits right around the $30.65 level, with the $31.00 level also offering support.”
On the day gold closed up $19.40 at $2853.30, and silver closed up $0.50 at $32.89.
On Wednesday the price of gold surged higher, reaching $2888.00, so we are adding to yesterday’s nice upside move as the bulls enjoy higher prices encouraged by increased safe haven demand and perhaps the possibility of stagflation. (Ernest Hoffman/Kitco) – “Growing fears of stagflation are driving gold prices to new all-time highs, according to Kelvin Wong, Senior Market Analyst at OANDA. In an analysis published Wednesday morning, Wong said that rising Treasury yields, and the specter of trade wars are combining to create a stagflationary environment, which has investors fleeing to gold. “The recent three weeks of sideways movements of the US Dollar Index since its 52-week high of 110.18 printed on 13 January had a positive knock-on effect on gold prices,” he wrote. “Gold (XAU/USD) has staged a bullish breakout from its prior two-month range configuration on 21 January and rocketed by 4.4% to print a fresh intraday current all-time high of US $2,865.00 at this time of the writing.”
So where to go from here? I’m always suspicious when everyone is beating the drum for higher prices in the metals but there is no doubt these spectacular prices suggest $3000.00 gold is on the front burner. Still, profit taking may fit into this latest fireworks when you consider that gold moved from $2635.00 through $2880.00 this past month. Caution always makes sense in hot markets so look for settling here as investors consider options. But most bullion investors continue to see the handwriting on the wall, which points to higher prices in the longer term.
FXEmpire (Christopher Lewis) – Gold Continues to Power Ahead – “The gold market looks very strong again on Wednesday, as the markets are now breathing a sigh of relief after the trade war spat seems to be cooling off a bit. At this point in time, the markets are likely to find one reason or another to push gold higher. Technical Analysis – Gold markets continue to see a lot of upward pressure as we continue to see the US dollar give back some of its strength. So now we have gold acting as a safety measure against tariffs. And then suddenly as a US dollar loses strength as people are not so concerned about tariffs, at least for the next five minutes, gold rallies based on that. So, what is the lesson here? The lesson here is that gold is going higher regardless. And with that, it’s a situation where you pay attention to what the market does, not what people say. Now, the question also is whether or not gold’s a little overextended here. I think it probably is, but I will be taking a bit of profit sometime today and then letting it fall a bit and reload. This is an uptrend that I think probably goes on for quite some time. Regardless, you are in a situation where the $2,800 level should offer a bit of support based on market memory. And I think that’s the first thing that you would watch on any significant pullback. I still believe that gold is going to the $3,000 an ounce level. But at this point in time, I just think that it’s a one-way trade. Now, I don’t think that you should chase it. I think you’re looking for value, and value is found in the form of dips. We saw that on Monday when everybody was freaking out about the tariffs being foregone for like 30 days. Sold gold, went into everything else, and then we turned right back around. So here we are. We’re much higher than we were then. It’s been a strong three days, considering that at one point in time we were down to $2,775 or so, and we are about $90 higher now. So, with this, I remain bullish. There’s no way to short this market. Silver Continues to See Same Ceiling – The silver market has rallied nicely on Wednesday, as the market has now reached the crucial $32.35 level. Technical Analysis – Silver has tried to rally a bit during the trading session, and at this point in time, I think what we are seeing is the $32.35 level offers significant resistance, an area that I had pointed out previous times. So, with that being the case, I think you need to be very cautious about trying to buy it here. There is an argument to be made that a dip is actually needed in this market, as it shot straight up in the air for a couple of days, and I’m not going to lie here, I think that’s probably what we are seeing. I don’t know if the uptrend in gold is over. I don’t know that the uptrend in silver is over, but they both look very similar today. It’s a little exhausted. So, with that being said, I think gold, if it pulls back, it’ll probably pull this market back as well. But I do see Silver finding a lot of support near the $31.00 level. Alternatively, if we just power higher from here and break above the $33.00 level, then I think Silver really starts to melt up. I’m not looking for that to happen, but you always have to keep the Black Swan event, as it were, in the back of your mind. So that is something that you have to watch. A pullback and perhaps a buying opportunity, I could buy that and probably would buy that if it does, in fact, show itself.”
On the day gold closed up $18.30 at $2871.60, and silver closed down $0.03 at $32.86.
On Thursday the price of gold turned contrary as paper traders twice tried to push above recent highs of $2870.00 but failed. They sensed wavering strength and turned into sellers which pushed gold prices to session lows of $2837.00. Traders were not aggressive in taking advantage of this weakness, and on the day, gold closed only slightly in the green. This suggests that gold is, for now, oversold and the bullish sentiment is cooling. Still, I don’t believe gold will continue much lower, there are too many other factors which offer shorter term support.
We may be seeing a transition in pricing to more of a “sideways” action as investors feel their way around. And the world gets a better idea of what Trump has in mind relative to friends and foes alike. This looks like the “taking profits” scenario I talked about yesterday. And it may develop into a good time for the bullion market to think about the relationship between the price of gold and silver from a relative value standpoint. Some investors may want to take profits in gold and use the money to buy silver, or vice versa. We have not seen much of this across our trading desk yet, but such trades are likely to happen. If you are not a seller under the current circumstances, the next scenario would be to buy weakness with the longer term in mind.
Reuters (Ishaan Arora and Swati Verma) – Gold’s 5-session record streak pauses, but momentum remains upbeat – “Gold prices steadied on Thursday after a five-session rally to all-time highs on tensions over trade wars between the world’s two largest economies raising worries about economic growth and uncertainty around the future path of U.S. interest rates. Spot gold edged 0.1 higher to $2,867.93 per ounce by 1214 GMT after hitting an all-time high of $2,882.16 on Wednesday. U.S. gold futures were flat at 2,892.20. “It’s quite clear that gold has got a bit between its teeth, like a racing horse, and the momentum is very much on the upside,” independent analyst Ross Norman said, adding that the danger of an escalation in the trade war, especially between the U.S. and China, is raising massive uncertainties. “But the correction is a natural phenomenon… profit-taking off the highs,” Norman said, noting that gold, technically, is overbought with the RSI of about 76, so it is looking a bit overextended. A Relative Strength Index (RSI) reading above 70 indicates overbought conditions, potentially leading to a correction. While global trade war concerns have accelerated the flight to safety, “growing bets around tariffs rekindling inflationary pressures could bring gold bears back into the picture, especially if this results in higher for longer U.S. rates,” said FXTM senior research analyst Lukman Otunuga. U.S. Federal Reserve officials pointed to the large policy uncertainty around tariffs and issues arising from the early days of Trump’s administration as among the top challenges in figuring out where to take the monetary policy in the months ahead. Market focus is on the non-farm payrolls report on Friday, which could offer insights into the economy’s overall strength and Fed policy path. “A disappointing jobs print could strengthen the argument around lower U.S. interest rates, boosting gold prices. The same can be said vice-versa,” Otunuga added. In other metals, spot silver dropped 0.8% to $32.06 per ounce, and palladium fell 0.4% to $985.50. Platinum rose 1.4% to $993.50.”
On the day gold closed up $2.70 at $2856.00, and silver closed down $0.34 at $32.52.
On Friday gold prices presented another set of fireworks, at first bouncing to session highs of $2885.00 as traders sold this really and gold finished the day only mildly in the green. But expert commentary from informed insiders frankly got to me. From my first cup of coffee, I could not get an adage out of my head – “Don’t look a gift horse in the mouth” – which most of you old-timers understand is an idiom suggesting that you should be grateful for a gift and not be too critical. Trying to divide the price of gold into a pro and con argument at all-time highs would be impolite because you are doubting the giver’s generosity.
Whether the price of gold moves to fresh record highs or not is not the point. Enjoy having gold bullion in your hands during times of anxiety because it has always been considered the greatest financial safety net. Sometimes it goes up and sometimes it goes down but, in all cases, it is worth cash on the spot. Now that is something to be thankful for under all circumstances.
Reuters (Anmol Choubey) – Gold poised for sixth week of gains on safe-haven demand – “Gold prices rose on Friday and were on track for a sixth consecutive week of gains as escalating trade tensions between the U.S. and China prompted investors to seek refuge in the safe-haven asset. Spot gold gained 0.6% to $2,873.63 per ounce as of 09:33 a.m. ET (1433 GMT), rising more than 2% this week. U.S. gold futures added 0.7% to $2,897.50. “Central focus of the gold market continues to be the uncertainty in regard to the Trump tariff policies,” said David Meger, director of metals trading at High Ridge Futures. Earlier this week, U.S. President Donald Trump kick started a trade war as he followed through on his threat to impose duties on China. Meanwhile, Trump granted Mexico and Canada a one-month reprieve. Gold, used as a safe investment during times of political and financial uncertainty, rose to an all-time high of $2,882.16 on Wednesday amid trade war concerns. Meanwhile, A Labor Department report showed the U.S. economy added 143,000 jobs in January, compared with a rise of 170,000 expected by economists, whereas the unemployment rate stood at 4%, compared with the expectations of 4.1%. Wage growth and declining job creation reflects market uncertainties and potential inflation, and challenging the Federal Reserve’s ability to adjust rates, actively shaping a uniquely complicated yet potentially advantageous situation, said Bart Melek, head of commodity strategies at TD Securities.”
On the day gold closed up $11.30 at $2867.30, and silver closed down $0.18 at $32.35.
Platinum closed up $23.64 at $1011.10, and palladium closed down $4.98.
Jim Wycoff (Kitco) – “Technically, April gold futures bulls have the strong 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 $3,000.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,800.00. First resistance is seen at $2,900.00 and then at the contract high of $2,906.00. First support is seen at the overnight low of $2,879.60 and then at Thursday’s low of $2,855.00. March silver futures bulls have the overall near-term technical advantage amid a price uptrend in place on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $34.00. The next downside price objective for the bears is closing prices below solid support at $31.00. First resistance is seen at $33.00 and then at the December high of $33.33. Next support is seen at Thursday’s low of $32.15 and then at $32.00.
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