(Kitco News) - Gold and silver prices are higher in early U.S. trading Tuesday, on safe-haven demand amid marketplace uncertainties regarding the war in Iran. A lower U.S. dollar index today is also a positive for the metals markets. April gold was last up $83.60 at $5,187.80. May silver prices were up $4.092 at $88.62.
Latest on the war in Iran.
--Trump said he predicted the war would end “very soon,” but not this week
--He said some oil-related sanctions would be waived, escorts provided in Hormuz
--Trump says U.S. will hit Iran “20 times harder” if it attacks ships in Persian Gulf
--Gulf countries deepen oil-output cuts, with Hormuz still near-shut
--Nymex and Brent crude oil prices retreat sharply from Monday’s highs, now below $90
--Turkey said NATO will deploy a Patriot system to its Eastern region to shore up defenses
--Missiles were launched from Iran toward Israel and sirens sounded; no known casualties
--Saudi Arabia has cut oil output by 2M-2.5M B/D; UAE by about 0.5M-0.8M B/D
--Kuwait cuts oil output by about 0.5M B/D; Iraq has cut output by about 2.9M B/D
President Trump on Monday said the U.S. and Israel were making significant progress in their war on Iran and could end the conflict “very soon,” curtailing an oil-price surge. Trump said he didn’t believe the fighting would be over this week, but insisted the operation was ahead of schedule. The U.S. Navy will escort tankers out of the Middle East to maintain a steady oil supply through the Strait of Hormuz, he added. Today, Saudi Arabian oil giant Aramco said it would be able to ramp up a pipeline that can take crude to the kingdom’s west coast — thus bypassing Hormuz — to full capacity in a few days, Bloomberg reported.
G-7 meets today to discuss releasing oil reserves. Group of Seven energy ministers will meet in Paris today as they continue to debate a possible release of oil reserves to stabilize markets, French Finance Minister Roland Lescure said today and as reported by Bloomberg. The group, currently presided by France, said on Monday it was ready to take any steps needed to support global energy supplies. The G-7 stopped short of calling for a release of stockpiles, however, and prices have since declined sharply with President Trump hinting at an early end to the conflict. “We are gathering the G-7 energy ministers today here in Paris; we are going through the process but obviously all options are on the table,” including an emergency oil stock release, Lescure said on the sidelines of a nuclear energy conference. “We are ready.”
China’s imports, exports surge. China's export growth accelerated far faster than expected in the first two months of this year, with exports soaring almost 22% from a year earlier. The country's imports jumped nearly 20%, leaving a surplus of $214 billion — an all-time high for the period, according to China’s General Administration of Customs. “The escalating crisis in the Middle East now poses new risks for China's exports, with the possibility of a global demand shock from the hostilities emerging as a major threat to its ambitions for growth this year,” said Bloomberg. The U.S. was the only major region to see a decline in Chinese exports in January-February, according to the latest data, with sales down 11%.
The key outside markets today see the U.S. dollar index lower, with Nymex crude oil prices solidly down and trading around $90.00 a barrel after spiking to near $120.00 early Monday. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.1 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 last 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 this week’s high of $5,210.40 and then at $5,250.00. First support is seen at the overnight low of $5,127.10 and then at $5,100.00. Wyckoff's Market Rating: 7.0.
May silver futures bulls see their next upside price objective is closing prices above solid technical resistance at last 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 the overnight high of $90.385 and then at $92.50. Next support is seen at the overnight low of $86.805 and then at $85.00. Wyckoff's Market Rating: 6.0.
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