Gold tests $4,500 as oil rebounds on Iran risk
Spot gold and silver prices are lower in early U.S. trading Thursday, as oil rebounded on renewed U.S.-Iran friction and Treasury yields held near the 4.6% area. At the time of writing, spot gold was trading near $4,512.90 an ounce, down 0.69%, while spot silver was trading near $75.065, down 1.06% on the session.
Weekly jobless claims fell by 3,000 to 209,000 for the week ended May 16, below the 213,000 consensus, while the four-week average slipped by 1,500 to 202,500. Continuing claims rose by 6,000 to 1.78 million for the week ended May 9. April housing starts fell 2.8% to a 1.465 million seasonally adjusted annual rate, while building permits rose 5.8% to 1.442 million. The Philadelphia Fed manufacturing index fell to -0.4 in May from 26.7 in April, cutting against the firmer housing-permits signal and leaving the macro read mixed: labor remains resilient, housing construction softened at the start stage and regional factory momentum stalled.
The Strait of Hormuz remains the main geopolitical channel into oil, rates and precious metals. Wednesday’s tanker movement through the strait reduced the immediate supply-risk premium, but that relief faded after Iran’s supreme leader hardened Tehran’s negotiating stance by ordering that enriched uranium remain inside the country. WTI crude moved back above $100 a barrel and Brent traded near $107, reversing part of Wednesday’s oil-led disinflation trade.
U.S. equity futures were lower before the open as oil and yields moved higher. S&P 500 futures fell 0.2%, Dow futures lost 0.2% and Nasdaq futures declined 0.4%, with Nvidia’s stronger earnings not enough to offset the oil and rates move. In Asia, South Korea’s Kospi surged 8.4% and Japan’s Nikkei gained 3.1%, while Chinese markets weakened. European stocks were softer in early trade as energy risk and higher yields offset Wednesday’s rebound.
Traders are watching the S&P Global U.S. flash PMI at 9:45 a.m. ET, along with any update on U.S.-Iran negotiations and Hormuz shipping flows.
The key outside markets see Nymex WTI crude oil prices higher and trading around $100.50 a barrel, while Brent crude was near $106.90. The U.S. dollar index is firmer. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.6% area.
Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,531 to $4,546 resistance zone, with a sustained move targeting $4,573 and then $4,600. Bears’ next near-term downside price objective is a break below $4,502.70, with deeper downside targets at $4,500 and then $4,401. First resistance is seen at $4,531 and then at $4,546. First support is seen at $4,502.70 and then at $4,481.78.
Spot silver bulls’ next upside price objective is to drive prices back above the $75.77 to $76.00 area, with a move above that zone targeting $76.50 and then $77.75. The next downside price objective for the bears is a break below $74.68, with deeper downside targets at $74.47 and then $73.90. First resistance is seen at $75.77 and then at $76.00. Next support is seen at $74.68 and then at $74.47.
