(Kitco News) - Gold prices are trading near unchanged silver is posting mild gains in early U.S. trading Friday. As the trading week winds down, the two precious metals markets are pausing as traders assess the latest geopolitical developments and trying to handicap what comes next. June gold was last up $1.60 at $4,725.00. May silver prices were up $0.316 at $75.85.
Latest on the war in the Middle East…
--U.S. works to get Iran to the peace talks table; so far no success
--U.S. will sink any boat laying mines in Strait of Hormuz
--Iran war to keep gas market tight for two more years, IEA Says
--Goldman says Persian Gulf oil supply 57% below pre-war level
The U.S. increased pressure on Iran with its naval blockade, as it seeks to get Tehran to agree to talks, while Israel and Lebanon are set to extend a ceasefire for three weeks. President Trump ordered the U.S. Navy to shoot any boat putting mines in the Strait of Hormuz, after the military intercepted two oil supertankers that tried to evade restrictions on traffic to and from Iran’s ports. The move by Trump, who claimed Iran is laying sea mines in the strait, is part of the White House’s attempt to cut off the country’s oil exports, squeezing it economically and forcing it to make concessions that will help end the war. “I have all the time in the World, but Iran doesn’t — The clock is ticking!” Trump said in a Truth Social post and as reported by Bloomberg. Trump’s allies say the blockade will force Iran to start shutting down crude production — its main source of foreign-exchange earnings — within about two weeks. JPMorgan Chase & Co. analysts have said it may take closer to a month for the U.S. to achieve that goal.
China raising its export prices may be global inflation warning… Chinese exporters are lifting prices on their goods due to the Iran war driving up oil-linked input costs, signaling that global consumer inflation is likely to accelerate, said a Bloomberg report. “More than a dozen categories of household goods saw sharp year-on-year price increases in March, with products reliant on rubber, plastic and oil-derived chemicals seeing spikes. The detailed breakdown provides a snapshot of how the U.S.- Iran-war induced energy shock is rippling through China's economy and on to retailers around the world, with Bloomberg Economics estimating above-3% inflation in 2026 is ‘back in play’ across major economies,” said the report.
Positive U.S.-China relations sign: Chinese pandas coming to U.S. before summit meeting… Beijing is sending two pandas to the U.S., adding to signs of stabilizing ties between the nations. A male panda named Ping Ping and a female named Fu Shuang are part of an agreement reached with the China Wildlife Conservation Association, according to Zoo Atlanta. The new deal replaces the original one, which expired in 2024, and comes before President Trump's planned meeting with China’s leader Xi Jinping in mid-May.
Currency market carry trades are “revving up”… “DoubleLine Capital and Van Eck Associates Corp. are among investors seeing renewed appeal in a currency strategy that’s revving up as the Middle East ceasefire helps steady markets and reignite risk appetite,” reports Bloomberg.
“The carry trade — borrowing where interest rates are low and investing where they’re high — was already thriving as the war sparked a surge in oil prices that boosted commodity currencies such as Brazil’s real and Colombia’s peso. But now it’s getting turbocharged by the relative ebbing of international tensions, which has caused volatility in currencies, bonds and stocks to collapse. That backdrop is giving investors confidence that exchange rates won’t swing abruptly against them, as happened in 2024 when the trade combusted and roiled markets broadly,” said the report.
The key outside markets see Nymex WTI crude oil prices higher and trading around $97.50 a barrel. The U.S. dollar index is slightly weaker. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.33 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 Thursday’s high of $4,771.30 and then at $4,800.00. First support is seen at the overnight low of $4,672.20 and then at $4,626.00. Wyckoff's Market Rating: 5.5.
May silver futures bulls see their next upside price objective is closing prices above solid technical resistance at the April high of $83.245. The next downside price objective for the bears is closing prices below solid support at $70.00. First resistance is seen at $76.00 and then at Thursday’s high of $78.405. Next support is seen at $73.00 and then at $70.00. Wyckoff's Market Rating: 5.5.
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