Spot gold softer in thin trade as oil rebound, U.S.-Iran uncertainty cloud rate outlook
Spot gold prices are lower and spot silver prices are also weaker in early U.S. trading Monday, pressured by a firmer inflation-risk backdrop as crude oil prices rebounded on renewed Persian Gulf tensions. Trading was thinner than usual overnight, with major markets in China, Japan and the U.K. closed for public holidays. At the time of writing, spot gold was trading near $4,570.26 an ounce, down 0.95%, while spot silver was trading at $73.953, down around 1.86% on the session.
Financial markets are currently digesting mixed global manufacturing data. South Korea’s April manufacturing PMI rose to 53.6. India’s final April manufacturing PMI rose to 54.7 from 53.9. In Europe, Spain and Italy manufacturing PMIs softened, France’s final manufacturing PMI rose to 52.8 from 50.0, Germany’s final manufacturing PMI fell to 51.4 from 52.2, and the Eurozone final manufacturing PMI came in at 51.6, below the prior reading of 52.2.
Traders are watching scheduled European Central Bank speeches and surveys later today, along with comments from Bank of Canada officials, for signals on how policymakers are weighing energy-driven inflation risks against signs of uneven global growth.
The main weekend and overnight headline remains the U.S.-Iran conflict and its impact on energy markets. Oil prices bounced as the U.S. launched a military-supported maritime operation in the Strait of Hormuz to assist stranded vessels, while Iran rejected the U.S. plan but continued reviewing an American response to a peace proposal. This remains a mixed input for gold: geopolitical risk is supportive, but higher oil prices are reviving inflation worries and reducing expectations for near-term rate cuts.
Global financial markets were mixed overnight. Asian technology shares rallied strongly after Wall Street’s record-setting Friday close, with South Korean and Taiwanese equities jumping on chip-sector strength, while European markets were mixed and U.K. markets were closed.
The key outside markets see Nymex WTI crude oil prices higher and trading around $102.57 a barrel, while Brent crude was near $110.40. The U.S. dollar index is firmer. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.4% area.
Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,645.91 to $4,670 resistance zone, with a sustained move targeting $4,733 and then $4,800. Bears’ next near-term downside price objective is a break below $4,576.74, with deeper downside targets at $4,566 and then $4,500. First resistance is seen at $4,645.91 and then at $4,670. First support is seen at $4,576.74 and then at $4,566.
Spot silver bulls’ next upside price objective is to drive prices back above the $73.00 to $73.40 area, with a move above that zone targeting $74.20 and then $75.10. The next downside price objective for the bears is a break below $72.65, with deeper downside targets at $71.85 and then $70.90. First resistance is seen at $73.40 and then at $74.20. Next support is seen at $72.65 and then at $71.85.
