(Kitco News) - Gold and silver prices are modestly down in early U.S. trading Tuesday, as the metals traders await to key U.S. economic data points at mid-week. April gold was last down $38.10 at $4,970.10. May silver prices were down $0.351 at $79.57.
FOMC meeting ends today; likely no change in U.S. monetary policy. Traders and investors will be looking to Federal Reserve Chair Jerome Powell for insight on how the U.S. central bank is weighing risks to the economy amid war in the Middle East. Fed officials are expected to keep interest rates steady and release fresh economic projections that could reveal how they're interpreting recent economic data and geopolitical events. Powell will hold a press conference early this afternoon, where he will likely emphasize that Fed officials need more time to see how long the U.S. conflict with Iran lasts and to assess how it might impact economic growth and inflation. “Bond traders are scaling back aggressive bets that had driven markets to price out Federal Reserve interest rate cuts this year. The market has shifted back to pricing at least one quarter-point cut by the end of 2026, after a sell off in short-end Treasuries accelerated due to inflationary worries fueled by oil topping $100 a barrel,” said a Bloomberg report.
U.S. producer price index out today. U.S. producer prices are expected to rise by 0.3%, month-over-month, in February—below the 0.5% rise in January and the least in three months. Core PPI, which excludes food and energy, is also forecast to increase by 0.3%, compared with a 0.8% jump in the previous month. On an annual basis, headline producer inflation is projected to remain at 2.9%, the same as in January. Core producer inflation is expected to edge up to 3.7%, which would be the highest reading since March of last year and compares to 3.6% in January.
Latest on the war in Iran…
--Iranian attacks in the Persian Gulf continued with a fresh wave of missiles and drones, targeting the UAE, Saudi Arabia and Kuwait.
--The attacks followed Iran’s confirming the assassination of its security chief, Ali Larijani, in an Israeli strike. Israel's killing of Ali Larijani leaves Iran's wartime leadership largely in the hands of hardliners who may be less likely to seek a diplomatic pathway out of the war.
--Trump said the U.S. would soon be ready to end the war: “We’re not ready to leave yet. But we’ll be leaving in the near future.”
--Israel has stepped up an offensive in Lebanon, where strikes have killed more than 900 people, according to the Lebanese government.
--Iran has been moving its crude through the Strait of Hormuz at rates broadly comparable to before the war began.
--Oil prices dip as Iraq signed a deal to resume exports via Turkey that avoid the Strait of Hormuz, and as the U.S. stepped up efforts to force the reopening of the key waterway.
-- U.S. to ease Venezuela sanctions to unlock more oil amid Middle East war
--China to tap its vast crude oil stockpiles to offset Iran crisis
The key outside markets today see the U.S. dollar index slightly up, with Nymex crude oil prices lower and trading around $94.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.2 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 the March high of $5,434.10. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,700.00. First resistance is seen at this week’s high of $5,049.40 and then at $5,100.00. First support is seen at this week’s low of $4,970.10 and then at $4,900.00. Wyckoff's Market Rating: 6.0.
May silver futures bulls see their next upside price objective is closing prices above solid technical resistance at $90.00. The next downside price objective for the bears is closing prices below solid support at $72.405. First resistance is seen at this week’s high of $82.76 and then at $85.00. Next support is seen at this week’s low of $77.125 and then at $76.00. Wyckoff's Market Rating: 5.0.
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