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(Kitco News) - Gold and silver prices are solidly higher in early U.S. trading Thursday, as solid losses in the U.S. dollar index today are prompting precious metals traders to step in and do some perceived bargain hunting after recent losses. June gold was last up $87.00 at $4,648.00. May silver prices were up $2.10 at $73.67.
Latest on the war in the Middle East…
--Brent crude oil hits four-year high on reports U.S. mulls Iran military options
--U.S. seeks to deploy hypersonic missile for the first time against Iran
--California gasoline price surges above $6 as Iran war spurs gains
--One by one, Asian currencies are faltering as oil worries worsen
--India’s rupee currency drops to record low as amid crude oil surge
--U.S. seeks forfeiture of seized oil tankers linked to Iran
President Trump will receive a briefing on new military options for action in Iran, signaling the potential for fresh escalation in the Middle East, Axios reported. Brent crude oil futures surged as much as 7.1% to surpass $126 a barrel — the highest since the aftermath of Russia’s invasion of Ukraine in 2022 — before paring gains to trade near $122. The head of U.S. Central Command Admiral Brad Cooper will brief Trump today, signaling a resumption of combat operations are seriously under consideration, Axios said, citing two unnamed people.
Fed keeps U.S. rates steady; Powell staying. Federal Reserve officials left U.S. interest rates unchanged Wednesday, as fully expected, but revealed a deepening division over the outlook for policy amid increased uncertainty caused by the conflict in the Middle East. Four officials voted against the decision, including three who objected to language in their post-meeting statement that suggested the central bank would eventually resume cutting rates. Meantime, Fed Chair Jerome Powell said he intends to remain at the central bank as a member of its Board of Governors, and will not leave until a controversial criminal investigation into the central bank is "well and truly over with transparency and finality."
U.S.-Iran war fanning inflation in China: IMF. China is seeing signs of a return of inflation as the U.S.-Iran war pushes up energy costs but will need more sustainable price gains to fully turn around deflationary pressures, according to an International Monetary Fund official.
“If you look at inflation, certain numbers have come up,” Krishna Srinivasan, the IMF’s Asia-Pacific director, said in an interview on Bloomberg Television today. On whether China is experiencing reflation, he added that while there have been some signs of that, “I would want to see it on a more durable basis before I can say anything more firmly.” The world’s No. 2 economy is set to end a record streak of economy-wide deflation as producer prices emerge from more than three years in the red. China’s growth has held up this year, in part thanks to a boom in global demand for artificial intelligence and high-tech related products that has led to explosive export growth across Asia.
Stagflation starting to grip European Union. The euro zone economy unexpectedly slowed at the start of 2026, with soaring energy costs triggered by the Iran war threatening stagflation in the months ahead, according to a report by Bloomberg. First-quarter gross domestic product rose 0.1% from the previous three months — below the 0.2% median estimate in a Bloomberg poll. “Highlighting the dangers still unfolding just hours before the European Central Bank sets interest rates, a separate release from Eurostat showed consumer prices surged 3% in April — the fastest pace since September 2023” and led by rising energy costs. Slowing economic growth and accelerating inflation are a recipe for dreaded stagflation. European Commission President Ursula von der Leyen has warned that the economic damage may be felt for “years to come.” France and Italy have already trimmed their outlooks for economic growth, while Germany has halved its forecast for 2026 to 0.5%.
The key outside markets today see the U.S. dollar index solidly down, while Nymex WTI crude oil prices are near steady and trading around $106.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.41%.
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 the April high of $4,917.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,300.00. First resistance is seen at $4,700.00 and then at this week’s high of $4,745.80. First support is seen at $4,600.00 and then at the overnight low of $4,550.80. Wyckoff's Market Rating: 5.0.
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 $75.00 and then at this week’s high of $76.555. Next support is seen at this week’s low of $70.885 and then at $70.00. Wyckoff's Market Rating: 5.0.
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