(Kitco News) - Gold and silver prices are higher in early U.S. trading Thursday, as safe-haven demand has returned amid the Iran war that has elevated risk aversion in the general marketplace. The war’s final outcome is still very much uncertain. April gold was last up $42.30 at $5,176.70. March silver prices were up $1.637 at $84.27.
Latest on the war in Iran:
--The war entered its sixth day with no sign of abating.
--Aerial strikes continue across region; Iran said attacks will intensify.
--Air travel remains mostly disrupted; Qatar will begin relief flights.
--Asia shares rebounded, Europe turns positive; Brent rises to $84.
--Iran says it offered a uranium deal to the U.S. before the attacks began.
--An oil tanker was attacked off the coast of Iraq, suggesting wider risks in Persian Gulf.
--Trump says U.S. is faring very well in the war.
Arab states across the Middle East — as well as Israel — reported interceptions of Iranian missiles and drones into Thursday, with Qatar telling residents to remain indoors due to the high level of threat. Tehran said it struck an oil tanker in the Persian Gulf, underlining the risk to shipping in the energy-rich region. Israel is carrying out waves of airstrikes on the Iranian capital, hitting military and intelligence assets, following attacks on the Hezbollah militant group in Lebanon. At least 1,100 people have died in Iran so far, and dozens elsewhere in the region, said a Bloomberg report.
China to stop exporting gasoline and diesel fuel. China's government has told the country's top oil refiners to suspend exports of diesel and gasoline due to an escalating conflict in the Persian Gulf, Bloomberg reported. Officials from the National Development and Reform Commission called for a temporary suspension of refined product shipments to begin immediately, with some exceptions. “China's curbs on exports reflect a scramble across Asia to prioritize domestic (energy) needs as the crisis in the Middle East deepens, with refiners from Japan to Indonesia and India also cutting back run rates and suspending exports,” said the report.
Supertankers starting to shun planned Persian Gulf routes. Supertankers have begun to abandon planned voyages into the Persian Gulf and seek safer destinations amid the turmoil at the strategic Strait of Hormuz, Bloomberg reported. “At least three very large crude carriers that sailed from Asia with plans to load in the Gulf have diverted toward the Atlantic Basin, according to vessel-tracking data compiled by Bloomberg.” The move will mean fewer tankers are in place to lift oil from key Middle East producers as and when conditions normalize. The region’s producers are filling up their storage because there aren’t enough oil carriers entering the Persian Gulf to collect cargoes.
IMF warns of global economic damage from Iran war. International Monetary Fund Managing Director Kristalina Georgieva said the war in the Middle East will test global economic resilience and warned that “new shocks in different shapes and sizes” will keep coming. Georgieva warned that a prolonged conflict could affect energy prices, market sentiment, economic growth and inflation, “placing new demands on the shoulders of policymakers everywhere.” The IMF is closely monitoring the Middle East conflict, and will incorporate its findings in the World Economic Outlook that will be published in April, Georgieva said.
Fed’s beige book: U.S. economy growing modestly and inflation is moderate. U.S. economic activity increased at a slight to moderate pace across most regions in recent weeks, though a growing number reported flat or declining activity, the Federal Reserve’s beige book said Wednesday. Employment levels were generally stable, with firms looking to artificial intelligence to bolster efficiency, and companies reported wages rose at a modest or moderate pace in most regions. Eight of the Fed’s 12 districts reported moderate inflation, with firms expecting prices to rise at a somewhat slower pace in the near term, and policymakers considering the likelihood that interest rates may need to be raised if inflation stays elevated.
Federal judge orders Trump administration to stop U.S. tariff payment process. A U.S. judge has ordered the Trump administration halt a key step in the tariff payment process in order to make any refunds simpler after the U.S. Supreme Court struck down the president’s global tariffs. In an order on Wednesday, Judge Richard Eaton, who sits on the federal trade court in New York, ordered Customs and Border Protection to stop calculating U.S. emergency tariffs on importers’ customs paperwork. He also questioned why the government was continuing to do so after the Supreme Court ruled the tariffs illegal, Bloomberg reported. Eaton also ordered officials to recalculate certain duties that had passed that step of the customs process, removing Trump’s contested tariffs. The judge confirmed that he has been assigned to handle all of the thousands of refund lawsuits filed in the trade court to date.
Venezuela’s main crude oil export hub already sees shipments hitting multi-year highs. Venezuelan crude exports from its main export hub are surging toward multi-year highs in March, three months into the Trump administration’s control of oil sales, said a Bloomberg report. “March shipments from the Jose terminal, which accounts for more than 80% of the country’s oil exports, are set to soar to 848,000 barrels a day, according to a preliminary loading program seen by Bloomberg. The volume, if it materializes, would be the highest from Jose since 2019. Exports are getting a boost from steady imports of naphtha used to thin out Venezuela’s extra-heavy crude for pipeline transport, allowing oil to flow,” said the report. “Just like in February, at least five cargoes of the blendstock are scheduled to discharge in
Venezuela this month.”
China vows to eliminate deflation. China’s leaders issued their strongest pledge yet to end deflation, which has been “a menace haunting the world’s No. 2 economy for three straight years by damaging business profits and holding down workers’ wages,” said a Bloomberg report. The Chinese government will “steer general price levels back into positive territory,” according to its annual report delivered by Premier Li Qiang in Beijing on Thursday. That language is far more emphatic than the pledge made last year to ensure the “general price level will stay within an appropriate range.” China’s economy-wide prices, measured by the GDP deflator, have been declining since early 2023 — the longest streak since the country transitioned toward a market economy in the late 1970s. Apart from Japan, known for its “lost decades” of stagnation, few major economies have experienced such prolonged and crippling deflation since the end of World War II. The move by China to eliminate deflation by increasing consumption could be a positive for the metals markets.
U.S.-Venezuela gold deal moves gold bars to U.S. markets. The Trump administration and Venezuela’s state mining company have finalized a deal that would see the South American country selling as much as 1,000 kilograms of gold to U.S. markets, the news website Axios reported on Wednesday and as reported by Bloomberg. “The deal would require the Venezuelan-owned Minerven to sell between 650 to 1,000 kilos of gold dore bars to the commodities trader Trafigura, Axios said, citing anonymous people familiar with the matter. Trafigura, according to the report, would then distribute the gold to U.S. refineries under a separate arrangement.” The report of the deal comes after a meeting between U.S. Interior Secretary Doug Burgum and Venezuela’s interim President Delcy Rodriguez on Wednesday to discuss mining reforms and mineral extraction.
The key outside markets today see the U.S. dollar index firmer, with Nymex crude oil prices higher and trading around $76.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.12 percent.
Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.
Technically, April gold futures bulls’ next upside price objective is to produce a close above solid resistance at this week’s high of $5,434.10. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $5,000.00. First resistance is seen at $5,250.00 and then at $5,300.00. First support is seen at the overnight low of $5,129.00 and then at $5,092.80. Wyckoff's Market Rating: 7.0.
March silver futures bulls see the next upside price objective is closing prices above solid technical resistance at this week’s high of $95.86. The next downside price objective for the bears is closing prices below solid support at the February low of $71.815. First resistance is seen at $85.00 and then at $87.50. Next support is seen at today’s low of $80.955 and then at $80.00. Wyckoff's Market Rating: 5.5.
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