(Kitco News) - Gold and silver prices are weaker in early U.S. trading Wednesday, after hitting three-week high overnight. Modest profit-taking from the shorter-term futures traders is featured at mid-week. June gold was last down $23.30 at $4,826.80. May silver prices were down $0.723 at $78.81.
Latest on the war in the Middle East…
--Trump hints truce deal with Iran might be close
--Strait of Hormuz remains virtually closed
--China’s Xi vows closer coordination with Russia as Iran war drags on
--U.S. stocks hold near all-time highs on peace hopes
--Israel hails Lebanon talks despite slim odds of breakthrough
President Trump played down the prospect of renewed fighting in the war with Iran, even as questions remain over Tehran’s nuclear program and access to the Strait of Hormuz. Speaking to ABC News on Tuesday and as reported by Bloomberg, Trump said extending a ceasefire that expires next week may not be necessary, hinting at near-term progress toward a deal to end the near seven-week conflict. In a Fox Business interview, he said the war is “close to over.” An initial round of peace talks between the two sides ended in Pakistan on Sunday without a deal. A second meeting hasn’t been agreed, though work has been ongoing this week to secure a new time and place, according to people familiar with the matter, who asked not to be identified discussing private deliberations, said Bloomberg. Talks might restart “over the next two days,” Trump told the New York Post, which would mean by Thursday.
Retail U.S. gasoline, diesel prices at highest seasonal levels ever. While fuel costs have eased slightly in recent days as oil markets have backed off amid the possibility of a U.S.-Iran deal to end the war, retail prices are still elevated — especially for this time of year. Gasoline averaged $4.12 a gallon on Monday, according to the American Automobile Association and as reported by Bloomberg. That’s a record for the date and compares with the previous high of $4.07 on the same day in 2022, following the price spike driven by Russia’s invasion of Ukraine. Meanwhile, national average diesel prices sat at $5.65 a gallon, more than 60 cents above their previous high-water mark for this time, set in 2022.
Bessent says U.S. tariff rates could be restored by July. U.S. tariffs may be restored by July to the levels in place before the Supreme Court struck down many of his levies, Treasury Secretary Scott Bessent said and as reported by Bloomberg. “We had a setback at the Supreme Court in terms of the tariff policy, but we will be implementing or conducting Section 301 studies, so the tariffs could be back in place at the previous level by beginning of July,” Bessent said Tuesday at a Wall Street Journal event in Washington. The Treasury secretary said because the Section 301 tariff authority has already been tested in the courts, business leaders are able to start planning and making decisions around capital expenditures. Trump is seeking to restore his tariff wall using different authorities after the high court ruled that his use of emergency powers to impose those earlier duties was unconstitutional.
Hedge funds turning bearish on the greenback. Hedge funds are increasingly downbeat on the U.S. dollar, Bloomberg reports, as the prospect of renewed U.S.-Iran talks and a possible peace deal have seen the greenback unwind almost all its war-driven strength. The dollar’s turnaround has been swift, with Bloomberg’s dollar index dropping 1.9% in April after jumping 2.4% in March, as the U.S. and Iran started to discuss a resolution to the conflict. “The path to a weaker dollar is widening, with analysts expecting medium-term dollar weakness to be more concentrated versus major peers, such as the Euro, yen, and Swiss franc,” said the report. Meantime, the elevated dollar signals long-term correction risks, according to Harvard University professor Kenneth Rogoff. “The dollar is probably at least still 20% overvalued,” he said. “Every previous episode where the dollar — or frankly any major currency — has been this overvalued, it tends to come down over, say, a five- or six-year period,” he said.
The key outside markets see Nymex WTI crude oil prices higher and trading around $93.00 a barrel. The U.S. dollar index is a bit firmer. The yield on the benchmark 10-year U.S. Treasury note is presently 4.25 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 today’s high of $4,895.40 and then at $4,950.00. First support is seen at $4,800.00 and then at $4,750.00. Wyckoff's Market Rating: 6.5.
May silver futures bulls see their next upside price objective for the bulls is closing prices above solid technical resistance at $85.00. The next downside price objective for the bears is closing prices below solid support at $70.00. First resistance is seen at $80.00 and then at today’s high of $81.155. Next support is seen at $77.00 and then at $75.00. Wyckoff's Market Rating: 6.5.
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