Gold weakens as U.S.-Iran talks keep oil, rates in focus
Spot gold prices were lower and spot silver prices were also under pressure in late afternoon trading on Friday, as firm Treasury yields, a stronger dollar tone and hawkish Fed inflation language offset residual safe-haven demand tied to the Strait of Hormuz and U.S.-Iran talks. At the time of writing, spot gold was trading near $4,506.30 an ounce, down 0.79% on the session, while spot silver was trading at $75.430, down 1.47%.
The U.S. data and policy mix remained rate-sensitive. The final University of Michigan consumer sentiment index fell to 44.8 in May from 49.8 in April, while one-year inflation expectations rose to 4.8% and long-run expectations rose to 3.9%. Fed Governor Christopher Waller said the Middle East energy shock has shifted his focus back toward inflation and said he would not hesitate to support a rate hike if inflation expectations became unanchored.
The Strait of Hormuz remains the market’s central energy-risk channel. Friday’s latest read was not a clean de-escalation, as Washington saw some progress toward a deal, but major sticking points remained over enriched uranium and control of the strait. That kept crude volatile and supported the inflation-risk premium in rates, while gold failed to hold a haven bid because the same oil channel tightened the Fed reaction-function risk.
U.S. equities firmed into the close while yields eased from recent highs, but the precious-metals tape stayed defensive. Comex gold settled at $4,521.00 an ounce, down 0.76% on the week, while Comex silver settled at $75.893, down 1.64% on the week. Gold has now posted two straight weekly losses, with the broader two-week decline at 4.22%.
The key outside markets saw Nymex WTI crude oil trade around $98.25 a barrel at one point, while Brent crude reached $105.19 in Friday’s volatile session. The U.S. dollar index was firmer. The yield on the benchmark 10-year U.S. Treasury note was trading near the 4.6% area.
Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,530 to $4,550 resistance zone, with a sustained move targeting $4,660 to $4,680 and then $4,774. Bears’ next near-term downside price objective is a break below the recent lows, with deeper downside targets at $4,350 to $4,370. First resistance is seen at $4,530 to $4,550 and then at $4,660 to $4,680. First support is seen at $4,491.20 and then at $4,350 to $4,370.
Spot silver bulls’ next upside price objective is to drive prices back above the 50-day moving average near $75.98, with a move above that level targeting $78.00 to $79.00 and then $85.00 to $86.00. The next downside price objective for the bears is a break below $75.00, with deeper downside targets at $71.00 to $72.00. First resistance is seen at $75.98 and then at $78.00 to $79.00. Next support is seen at $75.00 and then at $71.00 to $72.00.
