(Kitco News) - Gold prices are a bit weaker in midday U.S. trading Monday, while silver prices are higher. While the general marketplace remains uneasy amid still-heightened geopolitics, especially in the Middle East, there are some ideas the Israel-Iran confrontation will not escalate. Such has squelched some of the safe-haven buying interest in gold. Rising U.S. Treasury yields to start the trading week are also negative for gold and silver. June gold was last down $9.10 at $2,365.00. May silver was last up $0.33 at $28.65.
It was a tense weekend after Iran and its allies coordinated a massive air strike on Israel. However, judging by what the markets are doing Monday, some of the marketplace reckons the weekend outcome could have been much worse and that the Iran-Israel confrontation could de-escalate now. That may be wishful thinking, however.
Israel has vowed to retaliate for the more-than 300 missiles and drones fired into Israel by Iran and its proxies. The attack included 185 explosive drones, 36 cruise missiles and 110 ballistic missiles, “in a salvo that could have killed thousands and destroyed most of Israel’s infrastructure,” said broker SP Angel in a morning email dispatch. “Iran has been threatening to annihilate Israel for many years and it is only a matter of time before Iran develops its nuclear arsenal. The hard-line Netanyahu government will, almost inevitably, hit back at Iran in an attempt to slow its nuclear program, change its regime and reduce the capacity of the Iranian Revolutionary Guard. Members of the Israel cabinet are reported to be pushing for a powerful retaliatory strike as a deterrence, though the U.S. has stated it will not help Israel retaliate against Iran. We suspect the retaliatory attack will come sooner rather than later,” said the broker.
The Associated Press said in a morning email: “Iran may have managed to strike a balance between retaliating publicly and avoiding provoking further Israeli military action and setting off a much wider conflict. Mona Yacoubian, vice president of the Middle East and North Africa center at the U.S. Institute of Peace said of the situation: ‘Both (Iran and Israel) are able at this point to claim victory and step down off the precipice, particularly since there were no Israeli civilians killed.’ ” The marketplace will remain extra nervous in the coming days.
U.S. retail sales jumped 0.7% in March, much higher than expected. The rise surpassed market expectations of a 0.3% increase. This follows an upwardly revised gain of 0.9% in February, indicating continued strength in U.S. consumer spending. This news helped to push up U.S. Treasury yields and also falls into the camp of the U.S. monetary policy hawks.
The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are weaker and trading around $84.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 4.65%.
Technically, June gold futures prices Friday hit a contract and record high. The bulls have the strong overall near-term technical advantage. A two-month-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,500.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,300.00. First resistance is seen at the today’s high of $2,389.60 and then at $2,400.00. First support is seen at today’s low of $2,340.20 and then at last week’s low of $2,321.70. Wyckoff's Market Rating: 8.5.
May silver futures prices Friday hit a nearly three-year high. The silver bulls have the strong overall near-term technical advantage. A two-month-old price uptrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $30.00. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at $27.00 and then at $27.50. Next support is seen at $28.00 and then at $27.50. Wyckoff's Market Rating: 8.5
May N.Y. copper closed up 1,200 points at 437.85 cents today. Prices closed nearer the session high and hit a 14-month high. The copper bulls have the solid overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 450.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 415.00 cents. First resistance is seen at today’s high of 439.65 cents and then at 445.00 cents. First support is seen at 430.00 cents and then at 425.00 cents. Wyckoff's Market Rating: 8.5.