Gold and silver gain momentum after softer U.S. manufacturing data, easing Treasury yields
Spot gold and silver prices ended the North American session on a positive note on Friday, with both metals gaining support from softer U.S. manufacturing data and a pullback in Treasury yields. Gold firmed through the late morning and afternoon after early choppy trading, while silver led with modest gains. At the close, spot gold was trading at $4,613.83 per ounce for a flat performance, while spot silver closed at $75.357 per ounce for a gain of 2.18%.
The key U.S. data during the North American session was the ISM manufacturing report for April, which came in weaker than expected but remained in expansion territory. The report reinforces concerns about slowing industrial activity. The earlier S&P Global manufacturing PMI release also pointed to only modest expansion. Together, the data suggested softer momentum in the U.S. manufacturing sector, which capped Treasury yields lower and supported gold and silver prices.
Markets also continued to digest the implications of this week’s Federal Reserve, European Central Bank and Bank of England meetings. The overall takeaway remains that policymakers are in no rush to ease monetary policy, but today’s softer U.S. data added to expectations that economic growth may be cooling, which could eventually shift the policy outlook.
Geopolitical tensions tied to the U.S.-Iran conflict continued to underpin energy markets, although crude oil prices pulled back modestly from recent highs during the session. That easing in oil helped relieve some inflation pressure concerns and contributed to the decline in bond yields, which in turn supported the precious metals.
North American equity markets closed mixed. The S&P 500 ended little changed after fluctuating through the session, the Dow Jones Industrial Average posted a modest decline, and the Nasdaq Composite finished slightly higher, supported by continued strength in large-cap technology shares. Canadian equities were also mixed, with the TSX posting a marginal decline.
The key outside markets saw Nymex WTI crude oil prices slightly lower and trading near $102.00 a barrel by late afternoon. The U.S. dollar index was modestly weaker on the day. The yield on the benchmark 10-year U.S. Treasury note declined to around 4.372%, reflecting the softer tone in the U.S. economic data.
Technically, spot gold bulls regained some near-term momentum with today’s rebound and have the next upside price objective of pushing prices above the $4,615 to $4,642 resistance zone, which would open the door to a test of $4,685 to $4,720. Bears’ next downside price objective is a break below $4,568, with deeper downside targets at $4,532 and then $4,485. First resistance is seen at $4,615 and then at $4,642. First support is seen at $4,568 and then at $4,532.
Spot silver bulls’ next upside price objective is to drive prices above the $74.10 to $74.45 resistance zone, with a move above that area targeting $75.20. The next downside price objective for the bears is a break below $73.05, with deeper downside targets at $72.30 and then $71.40. First resistance is seen at $74.10 and then at $74.45. Next support is seen at $73.05 and then at $72.30.
