(Kitco News) - Gold and silver prices are lower in early U.S. trading Friday, just ahead of another key U.S. inflation report. June gold was last down $38.50 at $4,779.10. May silver prices were down $0.823 at $75.59.
U.S. consumer price index on deck today. The U.S. consumer price index report for March comes out this morning. The CPI is seen coming in at up 0.9%, month on month, with the core CPI reading (minus food and energy) seen up 0.3%. Year-on-year, CPI is expected up 3.3% and the core reading up 2.7%. Thursday’s core PCE price index, which is the Federal Reserve's preferred gauge of underlying inflation, rose by 0.4% from the previous month in February, sustaining the 10-month high recorded over the previous two months. Those numbers came out in line with the market expectations. From the previous year, the core PCE price index rose by 3%, down from 3.1% in the prior month and remaining well above the Federal Reserve's 2% annual inflation target.
Latest on the war in the Middle East…
--Ceasefire agreement between U.S. and Iran appears to be largely holding
--U.S. and Iranian delegations are set to meet in Pakistan on Saturday
--Israeli strikes into Lebanon continued, as did Hezbollah’s rocket volleys across border
--Trump demands reopening of Strait of Hormuz ahead of U.S.-Iran peace talks
--Russian-flagged tanker transits Hormuz into Persian Gulf in rare passage
--Trump warns Iran not to charge fees for ships transiting Hormuz
President Trump demanded Iran reopen the Strait of Hormuz while Israel and Hezbollah exchanged fire, complicating upcoming talks aimed at turning a fragile ceasefire into lasting peace. The truce announced on Tuesday remains shaky, with Kuwait reporting large-scale drone attacks on “vital” facilities overnight and accusing Iran and its proxy groups of violating the terms of the agreement. There were no further reports of strikes on Friday, said a Bloomberg report. Meantime, Israel continued to target towns in south Lebanon, where its parallel campaign against Tehran-backed Hezbollah threatens to undermine negotiations. Hezbollah said it launched drones and rocket salvos toward Israel, while Israeli medics reported treating several people injured while rushing to shelters in central and southern Israel. U.S. and Iranian delegations are set to meet in Pakistan on Saturday, with shipping through Hormuz — which handled about a fifth of the world’s oil and liquefied natural gas before the war — a central sticking point. Vice President JD Vance is expected to lead the U.S. delegation in discussions scheduled for Islamabad, Pakistan’s capital.
ConocoPhillips mulls return to Venezuela to drill for oil. ConocoPhillips has dispatched a team to Venezuela to evaluate the prospects for a return to drilling in the oil-rich Caribbean nation almost two decades after billions of dollars in assets were seized by the socialist regime, Bloomberg reported. “The undertaking makes ConocoPhillips just the second major U.S. oil company to publicly disclose an on-the-ground inspection in Venezuela, home to some of the world’s biggest crude reserves. The purpose of the trip is to ‘better understand the potential for in-country oil and gas opportunities,’ Dennis Nuss, a spokesman, said in a statement on Thursday. ‘We will evaluate Venezuela against other international opportunities as part of our disciplined investment framework,’ “ he said and as reported by Bloomberg. Exxon Mobil Corp. quit the country after asset seizures by the late dictator Hugo Chavez. “Rebuilding Venezuelan oil output to 3 million barrels a day would require ‘probably hundreds of millions of dollars’ over a long time horizon, Dan Ammann, upstream president at Exxon, said during the CERAWeek by S&P Global conference in Houston last month,” said the report.
Top Ukraine negotiator says progress made on peace deal with Russia. Ukraine’s top negotiator with Russia said he sees progress toward a potential peace deal with the Kremlin, adding that a resolution to the war may not take long to achieve, Bloomberg reports. “While negotiations to end Europe’s bloodiest conflict since World War II have publicly yielded few results, Kyrylo Budanov expressed optimism that the talks are evolving toward a settlement. Ukraine’s former top military spy said he believes Russia also wants to stop the war,” said the report. “They all understand the war needs to end. That’s why they are negotiating,” Budanov said in an April 4 interview with Bloomberg. “I don’t think it will be long.”
The key outside markets see Nymex WTI crude higher and trading around $98.00 a barrel. The U.S. dollar index is slightly down. 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, June 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 $4,500.00. First resistance is seen at $4,800.00 and then at this week’s high of $4,888.00. First support is seen at $4,750.00 and then at $4,700.00. Wyckoff's Market Rating: 6.0.
May silver futures bulls see their next upside price objective is closing prices above solid technical resistance at $80.00. The next downside price objective for the bears is closing prices below solid support at the March low of $61.21. First resistance is seen at this week’s high of $77.80 and then at $80.00. Next support is seen at $72.50 and then at this week’s low of $69.78. Wyckoff's Market Rating: 5.5
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