(Kitco NewsWire) - Spot gold and silver prices were lower in early U.S. trading Wednesday, as a hotter April producer inflation print added to the rates headwind after Tuesday’s CPI surprise. At the time of writing, spot gold was trading near $4,682.53 an ounce, down 0.70%, while spot silver was trading at $86.167, down 0.44% on the session.
Gold’s session range was $4,678.40 to $4,727.60, leaving the market below Tuesday’s $4,700 technical fight but above the overnight low. Silver traded between $82.710 and $87.920, holding above Monday’s breakout levels but off the intraday high.
The April PPI report kept inflation risk at the center of the metals trade. Final demand prices rose 1.4% in April after gains of 0.7% in March and 0.6% in February, the largest monthly increase since March 2022. The index rose 6.0% year over year, the largest 12-month increase since December 2022, while final demand goods rose 2.0% and final demand services rose 1.2%.
Energy remained the pressure point. Final demand energy prices rose 7.8% in April, with gasoline up 15.6%, while crude petroleum prices rose 11.3% at the intermediate-demand stage. For gold, the data reinforced the hard-asset case but also lifted the implied Fed-rate hurdle. For silver, the industrial-demand and supply-deficit story continued to offset a firmer dollar and still-high yields.
The Iran conflict remains a core macro input for metals and energy. A fragile U.S.-Iran cease-fire was still holding Wednesday morning, but oil markets remained volatile above $100 as traders monitored supply disruptions, Strait of Hormuz risk and planned U.S.-China talks. The risk premium is no longer providing the same clean haven bid to gold as it did earlier in the conflict, but it continues to feed energy-led inflation risk, which is keeping the rates channel active.
Kevin Warsh’s 51-45 Senate confirmation to the Fed Board added another policy variable for metals traders. The vote cleared one hurdle toward a possible Fed chair transition later this week, which keeps Fed independence, real rates and the dollar in the foreground for gold after the inflation data.
The key outside markets see Nymex WTI crude oil prices weaker and trading around $97.37 a barrel, while Brent crude was near $106.67. The U.S. dollar index was firmer. The yield on the benchmark 10-year U.S. Treasury note was trading near the 4.485% area.
Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,711 to $4,723 resistance zone, with a sustained move targeting the 50-day moving average near $4,749 and then the 100-day moving average near $4,789. Bears’ next near-term downside price objective is a break below the $4,680 to $4,702 support area, with deeper downside targets at $4,648 and then the 200-day moving average near $4,329. First resistance is seen at $4,711 to $4,723 and then at $4,749. First support is seen at $4,680 to $4,702 and then at $4,648.
Spot silver bulls’ next upside price objective is to drive prices back above the $87.26 to $89.73 area, with a move above that zone targeting $90.02 and then the $91.34 to $98.49 retracement zone. The next downside price objective for the bears is a break below $84.90, with deeper downside targets at $84.00 and then $82.12. First resistance is seen at $87.26 to $89.73 and then at $90.02. Next support is seen at $84.90 and then at $84.00.
