Precious Metals week in Review

 

Here are your Short-Term Support and Resistance Levels for the upcoming week. 

 

 

 

1. Gold and silver prices are higher in early U.S. trading Monday, with gold sharply up and hitting a record high of $3,973.70, basis December Comex futures. Silver prices are modestly up and hit a 14-year high of $48.59. Platinum futures hit a 13-year high of $1,638.70. Steady safe-haven demand continues to be featured in the precious metals. The expected U.S. interest rate cuts yet this year and the prospect of a prolonged U.S. federal government shutdown have boosted trader and investor demand for precious metals. After pausing in July, central banks resumed significant gold buying in August, led by the National Bank of Kazakhstan, with Bulgaria and El Salvador also joining the list of 2025 buyers, according to Krishan Gopaul at the World Gold Council. UPDATE: Gold futures rise above $4,000 per ounce for the first time on soaring demand for the safe-haven metal.

2. U.S. stocks nudged higher early Tuesday, building on their latest record-setting run, as Wall Street weighed worries over the government shutdown against bright hopes for AI. The Dow Jones Industrial Average gained 0.2%. The S&P 500 GSPC and on the tech-heavy Nasdaq Composite both rose about 0.1% after fresh record high closes on Wall Street. Gold futures topped $4,000 per ounce for the first time ever, as investors continue to flock to the safe-haven asset. The longer the federal stoppage drags on, the more clouded the picture of the economy will become for investors as key data releases dry up, making it hard to divine the path of interest rates. It has already delayed the September jobs report that was due Friday. Next week's releases on consumer and producer inflation, crucial to the Federal Reserve's decision making, could also be postponed.

3. There was some division at the Federal Reserve's last meeting about whether to cut interest rates and by how much, though most agreed the central bank could cut rates further in 2025. “Most judged that it likely would be appropriate to ease policy further over the remainder of this year,” according to the minutes from the Federal Market Open Committee's Sept. 16-17 meeting. While the Fed justified the rate cut due to more risks facing the job market, the minutes reveal that a majority of the central bank is still concerned about inflation, noting that there is continued uncertainty about the impact of tariffs and the risk that inflation proves longer lasting than expected. Though some noted that they saw less upside risk to inflation than earlier in the year. At that last meeting, the FOMC members penciled in a median of two more cuts this year. Though remarks from some members indicate they see fewer cuts if at all, while at least one sees more than two cuts.

4. Stocks are sitting at record highs, but some Wall Street strategists say that very optimism could be a warning sign. In a note to clients, Citi strategist Chris Montagu said buying activity has been strongest among smaller companies, with the Russell 2000 seeing the largest weekly increase in bullish bets. This has left markets more fragile, especially if momentum stalls, he said. "Profit-taking risks have rapidly risen across markets, and are particularly elevated for Nasdaq, potentially hampering further upside," Montagu said. Citi's Levkovich Index, which tracks flows, positioning, and risk appetite — shows markets are still deep in euphoria. Historically, returns from this level have been weaker as optimism leaves less room for upside surprises. That picture is echoed elsewhere. Goldman Sachs said client sentiment is at its highest level since December, while Barclays' sentiment tracker also sits firmly in "exuberant" territory. The concern is that investors may be overconfident, especially as valuations hover near multidecade highs.

5. Consumer sentiment surveys can gauge consumer spending, employment levels, inflation and other factors that help determine the strength of the economy. The survey, conducted through Monday, Oct. 6, showed little change from the prior month's results, even amid the start of a federal government shutdown. The survey indicated that consumer perceptions of current economic conditions improved slightly in October, while expectations for future economic conditions declined somewhat. “Overall, consumers perceive very few changes in the outlook for the economy from last month,” said survey director Joanne Hsu. “Interviews reveal little evidence that the ongoing federal government shutdown has moved consumers’ views of the economy thus far.”

6. Oil edged lower as traders focused on cooling tensions in the Middle East, and broader markets struck a more cautious tone. West Texas Intermediate fell as much as 1.9% to trade below $62 a barrel while Brent was near $65. Israel and Hamas reached a deal for a truce and the release of hostages held by the militant group, a major step toward ending a two-year war that’s loomed overflows from the Middle East, the source of a third of the world’s crude.

7. EUR/USD trimmed early losses and trades at around 1.1620 in the American session, establishing fresh daily highs after Wall Street's opening. U.S. indexes collapsed while the USD turned south against European rivals following headlines indicating fresh trade tensions between the U.S. and China. President Trump hints at no more talks with Xi Jinping.

8. The Japanese Yen sticks to its modest intraday recovery gains in the wake of some verbal intervention from Japan's Finance Minister Kato earlier this Friday. Moreover, bets for another interest rate hike by the Bank of Japan this year, along with the cautious market mood, underpin the safe-haven JPY.

Betting against the dollar has been the dominant trade this year in the $9.6 trillion-a-day foreign-exchange market, but the wager is starting to stumble. The world’s primary reserve currency is around a two-month high even as the U.S. government shutdown drags on, and traders in Asia and Europe say hedge funds are adding options bets that the rebound versus most major peers will extend into year-end. Overseas developments have been a key driver, with the euro and the yen falling abruptly this month. The longer the strength persists, the more painful it is for those sticking with calls for the greenback to take another leg lower.

Mortgage rates dropped slightly this week as financial markets remained largely calm amid the government's shutdown. The average 30-year mortgage rate was 6.3% this week through Wednesday, according to Freddie Mac data, from 6.34% a week earlier. Average 15-year mortgage rates were 5.53%, from 5.55%. “With the government shutdown delaying major economic data releases, markets are relying on alternative data sources, which may have contributed to the narrow range for mortgage rate movements over the last week,” Kara Ng, senior economist at Zillow, said in a statement. As rates held steady, refinancing and purchase activity slowed. Mortgage applications for refinancing dropped 8% through Friday from a week earlier, while purchase applications declined by 1%.

Volatility should be expected to remain high as investors will be closely watching for hints on the upcoming monetary policy direction. Many investors have redoubled their efforts to ensure that their portfolios are sufficiently diversified in the hope that they will be able to withstand corrections in multiple market sectors. Many of these investors have included physical precious metals as part of their diversification plans, given their long history as a hedge against both inflation and during times of economic turmoil. Remember, the key to profitability through the ownership of physical precious metals is to own the physical product and hold it for the long term. Always remember that you should never overextend your ability to maintain ownership of your precious metals over the long run.

Trading Department – GCILBullion.

This is not a solicitation to purchase or sell.