Gold slightly up, silver slightly down amid conflicting fundamentals
Gold and silver prices are down a bit in early U.S. trading today, ahead of a U.S.-imposed deadline of this evening for Iran to open the Strait of Hormuz, or else. June gold was last down $11.20 at $4,673.00. May silver prices were down $0.792 at $72.07.
Trump sets deadline deal, including reopening Strait of Hormuz, by Tuesday 8 p.m. ET
China ramps up gold buying amid Middle East war. China’s central bank bought the most gold in more than a year in March, “demonstrating that a key pillar of support for the precious metal remains intact as prices come under pressure amid the Iran war,” said Bloomberg in a report. Bullion held by the People’s Bank of China rose by 160,000 troy ounces last month, or about 5 tons, according to data on from the World Gold Council today. The central bank, among the world’s largest buyers, has added to holdings for 17 months straight. Gold prices sank 12% in March — the worst monthly performance since 2008 — as the conflict that ripped across the Middle East boosted the U.S. dollar and spurred bets that the Federal Reserve wouldn’t be able to cut interest rates if inflation picked up. “The PBOC’s latest purchases may help to bolster investor confidence in gold, at a time when some other central banks have turned to sales. In March, Turkey’s central bank sold and swapped about 60 tons to defend the lira, said the report. In the first two months of the year, central banks bought a net 25 tons, according to an estimate from the World Gold Council last week. The National Bank of Poland picked up 20 tons in February, driving much of the buying.
The key outside markets see Nymex WTI crude oil higher and trading around $114.00 a barrel. The U.S. dollar index is slightly up early today. The yield on the benchmark 10-year U.S. Treasury note is presently 4.34 percent.
Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.
Technically, June gold futures bulls’ next upside price objective is to produce a close above solid resistance at $5,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,300.00. First resistance is seen at $4,750.00 and then at last week’s high of $4,825.90. First support is seen at this week’s low of $4,626.20 and then at $4,580.40. Wyckoff's Market Rating: 5.0.
May silver futures are weaker early today. The next upside price objective is closing prices above solid technical resistance at $80.00. The next downside price objective for the bears is closing prices below solid support at the March low of $61.21. First resistance is seen at $75.00 and then at last week’s high of $76.265. Next support is seen at $70.00 and then at last week’s low of $67.70. Wyckoff's Market Rating: 5.0
