Looking to the Futures
Precious Metals Shine
December's Consumer Price Index may have momentarily put a damper on the run in precious metals, settling mixed Tuesday with February Gold settling at 4599.1. The CPI numbers came in lighter than expected indicating softer consumer inflation and possibly some resistance for metal futures. However, offering support are new geopolitical risks and concerns over Fed Independence from the Department of Justice's Grand Jury subpoenas of Fed Chair Jerome Powell.
November Producer Price Index showed final demand increased 0.2% in November, seasonally adjusted, the United States Bureau of Labor Statistics reported today. The index for final demand less foods, energy, and trade services advanced 0.2 percent in November after moving up 0.7 percent in October. For the 12 months ending in November, prices for final demand less foods, energy, and trade services climbed 3.5 percent, the largest 12-month increase since rising 3.5 percent in March. Tuesday was kicked off with bank earnings and December's Consumer Price Index (CPI). December CPI came in weaker than expected, headline CPI matched forecasts with a 0.3% increase month over month and 2.7% increase year over year, Core CPI was below estimates with a 0.2% increase month over month, and 2.6% increase year-over-year.
Providing support for metals is a mixed bag of headlines. President Donald Trump canceled meetings with Iranian officials and told protesters in a post on Truth Social, "HELP IS ON ITS WAY." Crude oil futures have experienced volatility over the fear of supply disruptions. President Trump also implied a 25% tariff on any country doing business with Iran. This would also pile onto the tensions with China, who is Iran's largest trade partner. In 2025, China bought more than 80% of Iran's shipped oil. Traders in metals and rare earths may see this development as support. China's export restrictions for metals went into effect January 1st.
Monday, news that the Justice Department is investigating Fed Chairman Powell's Fed building renovations raised concern over Fed Independence. Next week, the Supreme Court case for Federal Reserve Governor Lisa Cook will take place on January 21st. President Trump's administration accused Lisa Cook of committing mortgage fraud on properties she bought under federally subsidized housing programs. The court case could end up being important for precedence for future court rulings.
CME Group notified clearing member firms of a change to the performance bond requirements for metals. The notification stated, "with this change, CME will be setting margins for Gold, Silver, Platinum, and Palladium based on a percentage of notional value." The rates went into effect on Tuesday.
Technicals
Silver futures are up over 25% since Christmas and just short of 80% over the last three months. Moving averages are in a strong uptrend going back to November 26th when the 9-day simple moving average (SMA) last touched the 21-day exponential moving average (EMA). Silver is priced above the 9-day SMA after finding support at that level last Friday, January 9th. The 14-day Relative Strength Index (RSI), is hovering at an overbought level of 72.1024. According to the High Tower Report, the next area of resistance is around 89.825 and 92.450, while 1st support hits today at 83.965 and below there at 80.730.
9-Day SMA 80.406
21-Day EMA 75.146
50-Day SMA 62.422
14-Day RSI 72.1024%
50-Day Volume Average 109,458
Contract Specifications
Economic Calendar
- MBA Mortgage Applications 7:00 AM ET
- PPI - Delayed 8:30 AM ET
- Retail Sales – Delayed 8:30 AM ET
- Fed’s Paulson Speaks 9:50 AM ET
- Existing Home Sales 10:00 AM ET
- Fed’s Miran Speaks 10:00 AM ET
- Business Inventories – Delayed 10:00 AM ET
- Oil Inventories 10:30 AM ET
- Fed’s Bostic/Kashkari Speak 12:00 PM ET
- Beige Book 2:00 PM ET
- Fed’s Williams Speaks 2:10 PM ET
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