(Kitco News) - Gold and silver prices are trading modestly lower in early U.S. trading Monday. Traders are weighing the latest developments in the U.S.-Iran war, as well has trying to handicap this weeks batch of central bank meetings. June gold was last down $24.00 at $4,717.00. May silver prices were down $0.804 at $75.60.
Latest on the war in the Middle East…
--Iran told Pakistan the war could end if the Americans lift a naval blockade
-- Traffic in Strait of Hormuz remains halted with blockades firmly in place
--U.S. says Navy intercepted Iran-linked vessel in Arabian Sea
--Germany readies naval units for possible Hormuz mission
Iran has given the U.S. a new proposal to reopen the Strait of Hormuz and end the war, which includes postponing nuclear negotiations. The plan calls for extending the ceasefire so the parties can work toward a permanent end to the fighting, with nuclear talks to come later after a U.S. blockade of the Strait of Hormuz is lifted. Pakistani mediators have given the proposal to the White House, but it's unclear whether the U.S. wants to explore it, with the White House saying the U.S. will only make a deal that puts the American people first, according to a report from Axios.
Armed man storms event where Trump, Vance, other officials were attending; all safe. A man armed with guns and knives stormed the lobby outside a high-profile journalists’ dinner at the Washington Hilton attended by President Trump, Vice President Vance and multiple senior U.S. leaders on Saturday night. The man rushed toward the ballroom before Secret Service agents swarmed him and took him into custody. The president and vice president were uninjured and were hustled away. One law enforcement official said a gunman had opened fire. A law enforcement officer was shot in the bullet-resistant vest but is expected to be OK, several sources told The Associated Press.
Major central banks hold meetings this week. Monetary policy makers in the U.S. and across the Group of Seven will probably keep interest rates steady this week, while watching nervously for signs of higher energy costs fanning inflation, Bloomberg reports. “Three days of decisions in Washington, Ottawa, London, Frankfurt and Tokyo are widely anticipated to result in unchanged borrowing costs across the club of rich nations, with each central bank seen keeping a hawkish eye on fallout from the Iran war,” said the report. The Bank of Japan will be first on Tuesday, with officials who spoke in the past week leaning toward holding off this month on a potential hike. The Bank of Canada and the Federal Reserve on Wednesday are both expected by economists and investors to insist on waiting and watching events too, and the Bank of England and European Central Bank will almost certainly echo with similar messages on Thursday. “While domestic conditions are key for all of them, events at the Strait of Hormuz, the Middle East pinch point of global energy supply, could well partly dictate the path of their monetary policy too,” said the report. The FOMC meeting this week may well be the last for Jerome Powell as head of the U.S. central bank.
Big hurdle cleared for Warsh becoming next Fed chair. U.S. Senator Thom Tillis Friday said he is dropping his blockade of Kevin Warsh's nomination to head the Federal Reserve. The Justice Department's decision, announced Friday, to end its criminal probe targeting Fed Chair Jerome Powell removed a threat to the central bank's independence, according to Tillis. Tillis said he looks forward to supporting Warsh's confirmation, calling him an "outstanding nominee" who can help the Federal Reserve move beyond the distraction and return its full attention to its mission. The North Carolina Republican’s decision sets the stage for Warsh’s swift confirmation to succeed Powell, whose term ends on May 15.
The key outside markets today see the U.S. dollar index lower, while Nymex WTI crude oil prices are up and trading around $95.50 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.32%.
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 $4,750.00 and then at $4,800.00. First support is seen at last week’s low of $4,672.20 and then at $4,626.00. Wyckoff's Market Rating: 5.5.
May silver futures see the next upside price objective for the bulls 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 $77.50 and then at $80.00. Next support is seen at last week’s low of $73.845 and then at $72.00. Wyckoff's Market Rating: 5.0.
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