1. As the U.S. dollar begins 2025 on firm footing, questions linger about how long this strength can persist against the backdrop of mounting debt and shifting global capital flows. After hitting a September low, the U.S. Dollar Index, which measures the dollar’s value relative to a basket of six foreign currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc, has rallied 10%. Since the election, it has climbed by over 6%. One of the biggest traits for 2025 is the peak of the U.S. dollar versus other fiat currency. Not only against tangible assets but really against other fiat currencies. The dollar’s strength has had mixed consequences. While it has helped temper import prices, it has also strained U.S. exporters and multinational corporations by reducing the competitiveness of their goods and services. Valuations in the U.S. are larger than in 1929 right before the great depression. For investors, the potential peak in the dollar presents opportunities in tangible assets like gold and silver. Gold’s performance has been seen as a hedge against fiscal irresponsibility and currency devaluation. Gold’s appeal is only growing as central banks continue to increase their purchases, referencing the recent surge in central bank demand for the yellow metal. Inflation and interest rates remain critical variables in this equation. Despite progress in bringing inflation down from its 2022 highs, structural issues, such as deglobalization and underinvestment in commodity production, are likely to keep inflation elevated.
2. U.S. stocks and precious metals rallied on Wednesday as high hopes for bank earnings paid off and a crucial consumer inflation update showed prices increased less than expected in December. The benchmark S&P 500 popped more than 1.6% while the Dow Jones Industrial Average rose more than 1.5%. Meanwhile, the tech-heavy Nasdaq Composite soared 2.2%. Stocks took a leg higher after the Consumer Price Index showed progress toward the Fed’s 2% inflation target in December. Prices climbed 0.2% month-on-month on a “core” basis, which strips out the more volatile costs of food and gas, an easing from November’s 0.3% gain. Over last year, the core CPI rose 3.2%. Until the latest print, the annual core CPI had been stuck at a 3.3% gain for the four months. December was the first time since July that the metric reflected a deceleration in price growth. Traders still see just a 3% chance that the Fed will lower rates in January, per the CME FedWatch Tool. They remain split on whether a cut will come in the back half of this year, with the odds of easing in June now seen as more likely than not.
3. Wholesale prices rose less than expected in December, a positive sign for the economy amid recent market fears that inflation isn’t falling as quickly as hoped to the Federal Reserve’s 2% target. Tuesday’s report from the Bureau of Labor Statistics showed that its producer price index (PPI), which tracks the price changes companies see, rose 3.3% from the year prior, up from the 3% seen in November but below the 3.5% increase economists had projected. On a monthly basis, prices increased 0.2%, below the 0.4% increase economists had expected. Excluding food and energy, “core” prices rose 3.5% year-over-year, above November’s 3.4% gain. Economists had expected an increase of 3.8%. Meanwhile, month-over-month core prices were unchanged, below the 0.3% increase economists had expected and the 0.2% gain seen last month.
4. Energy prices jumped in December, helping send up overall inflation for the month amid colder-than-expected temperatures, supply concerns driven by Ukraine’s targeting of Russian oil facilities, and optimism over Chinese stimulus spurring demand. According to Consumer Price Index (CPI) data released by the Bureau of Labor Statistics, seasonally adjusted energy prices rose 2.6% from the previous month, higher than November’s 0.2% increase. December’s rise in prices accounted for more than 40% of the monthly increase in headline inflation. A big reason for energy’s increase was gasoline prices, which popped more than 4% for the month as oil prices rallied in December. As of Wednesday, West Texas Intermediate was up about 12% in the past month while Brent, the international benchmark price, spiked roughly 10%.
5. The number of Americans filing new applications for unemployment benefits increased more than expected last week but remained at levels consistent with a healthy labor market. Initial claims for state unemployment benefits rose 14,000 to a seasonally adjusted 217,000 for the week ended Jan. 11, the Labor Department said on Thursday. Economists polled had forecasted 210,000 claims for the latest week. Claims tend to be volatile at the start of the year but have continued to signal low layoffs that are underpinning the labor market and broader economy. Nonfarm payrolls increased by 256,000 jobs in December while the unemployment rate dropped to 4.1% from 4.2% in November.
6. Oil prices edged lower on Friday but remained on course for a fourth consecutive week of gains, as the latest U.S. sanctions on Russian energy trade added to worries about oil supply disruptions. Brent crude futures were down 41 cents, or 0.5%, at $80.87 per barrel by 11:30 a.m. ET, having gained 1.4% this week. U.S. West Texas Intermediate crude futures were down 89 cents, or 1.1%, at $77.81 a barrel, having climbed 1.6% for the week.
7. The EUR/USD pair struggled to maintain upward momentum on Friday, slipping by 0.20% to settle around the 1.0285 mark. Efforts to break decisively above the 20-day Simple Moving Average (SMA) once again fell short, underscoring persistent headwinds facing any near-term recovery. Looking ahead, the 20-day SMA, situated around 1.0330, remains a pivotal hurdle for EUR/USD. A convincing move above this threshold would be needed to shift the short-term outlook in favor of the bulls. Failing that, further downside risks may emerge, with the next layer of support likely clustered near 1.0260–1.0250.
8. The Japanese Yen rallied more than 0.9% against the U.S. Dollar since the start of the week with USD/JPY pulling back from technical resistance on the heels of yesterday’s CPI print. Support is in view and the focus is on possible price inflection ahead- decision time for the bulls. Battle lines drawn on the USD/JPY weekly technical chart.
Fresh inflation data released Wednesday is likely to keep the Federal Reserve on pause during its next policy meeting this month, even though a new reading did show some signs of easing. On a “core” basis, which eliminates the more volatile costs of food and gas, the December Consumer Price Index climbed 0.2% over the prior month, a deceleration from November’s 0.3% monthly gain. On an annual basis, prices rose 3.2%. It was the first drop on a core basis after three months of being stuck at 3.3%. “This latest inflation reading confirms a Fed rate cut skip at the January FOMC meeting,” said chief economist Gregory Daco. The new print “won’t change expectations for a pause later this month, but it should curb some of the talk about the Fed potentially raising rates,” said Ellen Zentner, chief economic strategist for Morgan Stanley. The Fed next meets on Jan. 28-29, and investors are nearly unanimous in their view the central bank will leave rates unchanged after reducing them by a full percentage point in late 2024. “We are making progress on inflation, it’s just very slow,” former Federal Reserve economist Claudia Sahm told the media on Wednesday. “Cuts are not coming later this month, but that doesn’t mean they aren’t coming later this year.”
Israel and Hamas reached a deal Wednesday for a ceasefire in Gaza and the release of hostages, a breakthrough in their 15-month war, which has wreaked destruction and inflamed tensions across the region. The deal would be implemented in three phases, starting Sunday, Jan. 19. The first phase will include a full ceasefire and the withdrawal of Israeli forces from the populated areas of Gaza. It will also feature the release by Hamas of many of the hostages taken during the Oct. 7, 2023, attacks, especially the wounded, the elderly and women. Hundreds of Palestinian prisoners will be released in exchange for the hostages. Also, during phase one, Palestinians will be permitted to return to their homes in Gaza, many of which have been destroyed during the past year and half of fighting. The return of civilians will be accompanied by a surge in humanitarian aid to Gaza. This initial phase is intended to last six weeks, a time that negotiators will use to finalize “a permanent end of the war.” If negotiations require more than six weeks, however, the temporary ceasefire will remain in place. News of the agreement prompted joyful demonstrations in the streets in both Israel and Gaza late Wednesday.
The most aggressive Western sanctions imposed on Russia’s oil sector since Moscow’s 2022 invasion of Ukraine threaten to disrupt global supply as buyers, led by China and India scour the Middle East for alternative suppliers. Some estimates suggest the measures could halve Russian oil exports and their introduction has driven up Brent futures by as much as $5 a barrel in recent days. The 161 tankers affected by the Jan. 10 measures could transport about 1.4 million barrels a day of oil according to an estimate from the London-based EA Gibson Shipbrokers Ltd. That equates to almost half of Russia’s seaborne crude exports. Macquarie Group estimates the impact could be even greater with as many as 2.15 million barrels a day of oil exports potentially lost, driving up prices.
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 – Precious Metals International Ltd.
Friday to Friday Close (New York Closing Prices)
| Jan. 10, 2025 | Jan. 17, 2025 | Net Change | ||
| Gold | $2,695.94 | $2,712.91 | 16.97 | 0.63% |
| Silver | $30.42 | $30.33 | -0.09 | -0.30% |
| Platinum | $966.44 | $944.10 | -22.34 | -2.31% |
| Palladium | $953.44 | $956.56 | 3.12 | 0.33% |
| Dow | 41929.32 | 43487.59 | 1558.27 | 3.72% |
Previous Year Comparisons
| Jan. 19, 2024 | Jan. 17, 2025 | Net Change | ||
| Gold | $2,028.88 | $2,712.91 | 684.03 | 33.71% |
| Silver | $22.59 | $30.33 | 7.74 | 34.26% |
| Platinum | $903.40 | $944.10 | 40.70 | 4.51% |
| Palladium | $949.03 | $956.56 | 7.53 | 0.79% |
| Dow | 37857.47 | 43487.59 | 5630.12 | 14.87% |
Here are your Short-Term Support and Resistance Levels for the upcoming week.
| Gold | Silver | |
| Support | 2636/2538/2552 | 30.16/29.63/28.86 |
| Resistance | 2720/2751/2804 | 30.93/31.47/32.24 |
| Platinum | Palladiumn | |
| Support | 937/911/893 | 941/917/886 |
| Resistance | 982/1000/1027 | 971/995/1025 |