(Kitco News) - Gold and silver prices are posting big losses and hit six-week lows in early U.S. trading Thursday. The metals are getting hammered as traders worry about the prospects of problematic inflation keeping central banks’ monetary policies tighter. Such a scenario would not only support the U.S. dollar but also likely limit consumer and commercial demand for gold and silver. April gold was last down $226.60 at $4,669.20. May silver prices were down $6.852 at $70.735.
Metals markets punished amid war in Middle East. Gold futures prices are down over $900 an ounce from the late-January record high. Silver prices are down over $50 an ounce from its record high scored in late January. Copper gave up its gains for this year as the worsening war in the Middle East pushed energy prices higher and increased the risk of damage to the global economy. There were broad declines on the London Metal Exchange after Iran and Israel traded strikes on energy facilities in the Middle East. Copper, which started this year in bullish form and reached an all-time high in late January, has shed more than 9% this month.
FOMC leaves U.S. interest rates unchanged, as expected. Federal Reserve officials on Wednesday left U.S. interest rates unchanged, as fully expected by the marketplace. The FOMC said it expects one interest rate cut this year due to increased uncertainty from the war in the Middle East. Fed Chair Jerome Powell emphasized that progress in reducing inflation is needed in order to resume lowering rates, and Fed officials raised their outlook for inflation in 2026 to 2.7% annually. Powell said in his press conference that he has no intention of resigning as a member of the Fed's Board of Governors until an investigation of the Fed by the Department of Justice has concluded.
Latest news on the Middle East war:
--Trump presses for de-escalation of attacks on gas facilities in Iran, Qatar
--Iran strikes a crucial Saudi Arabian refinery on the Red Sea and LNG export plant in Qatar
--Israeli military earlier attacked Iran’s giant South Pars gas field
--Crude oil advances, with WTI hitting $100 overnight and Brent reaching $119 a barrel
--Stocks slump on fears energy prices will feed inflation
--European gas futures surged as much as 35% to more than double their pre-war level
-- Asia buys most U.S. oil in three years as war blocks Mideast flows
Brazil’s currency supported as its central bank only modestly cuts rates. Brazil’s cautious start to interest-rate cuts is expected to support local assets, underpinning its currency, the real, and easing pressure on short-term yields, money managers say and as reported by Bloomberg. Policymakers led by Gabriel Galípolo delivered their first cut to the benchmark Selic rate since 2024, lowering it by a quarter point to 14.75%. “The rate cut was important, even though it was smaller than initially expected, and the statement also showed caution, but if external risks ease, there’s room for the market to recover,” said the report.
The key outside markets today see the U.S. dollar index slightly up, with Nymex crude oil prices firmer and trading around $97.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.3 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 $5,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the February low of $4,423.20. First resistance is seen at $4,750.00 and then at $4,800.00. First support is seen at $4,650.00 and then at $4,600.00. Wyckoff's Market Rating: 5.0.
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 the February low of $64.66. First resistance is seen at $72.50 and then at $75.00. Next support is seen at $70.00 and then at $67.50. Wyckoff's Market Rating: 4.0.
(Hey! My “Markets Front Burner” weekly email report is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. Plus, I’ll throw in an educational feature to move you up the ladder of trading/investing success. And it’s free! Sign up here; it’s real easy. https://www.kitco.com/services)
