(Kitco NewWire) - Spot gold prices are firmer, but silver prices are sharply higher in late Monday trading, with bargain hunting in metals weighed against higher oil prices, elevated bond yields and uncertainty around U.S.-Iran negotiations. At the time of writing, spot gold was trading near $4,565.30 an ounce, up 0.57%, while spot silver was trading at $77.480, up 2.16% on the session.
The U.S.-Iran conflict remains the dominant cross-asset driver as the closing of the Strait of Hormuz continues to impact roughly one-fifth of global oil flows. Monday’s oil price swings showed how sensitive markets remain to every sign of escalation or negotiation. Brent crude rose above $111 a barrel earlier in the session, then fell below $109 after President Donald Trump delayed a planned Iran strike at the request of Gulf allies. The market impact is two-sided for gold: Middle East risks support defensive demand, but the oil shock raises inflation and rate expectations, lifting yields and limiting demand for non-yielding bullion.
Fawad Razaqzada, market analyst at FOREX.com, said in a note that gold remains “undermined as oil, yields and dollar apply pressure.” His near-term outlook matches Monday’s trade: gold bounced from support, but the rebound did not yet show enough conviction to neutralize the pressure from energy-led inflation fears and higher real-rate assumptions.
U.S. equities were mixed to lower as oil and rate volatility remained the macro center of gravity. The S&P 500 ended down 0.1%, the Nasdaq fell 0.5% and the Dow rose 0.3%. The 10-year Treasury yield reached 4.63% before retreating to 4.59%, leaving gold’s rebound vulnerable to another leg higher in yields. The U.S. dollar index was softer after last week’s rally, giving gold room to recover, but the dollar remains supported by safe-haven demand and rising rate-hike probabilities.
The key outside markets see Nymex WTI crude oil prices firmer and trading around $101.79 a barrel, while Brent crude was near the $109 to $111 area after touching $112.10 earlier in the session. The U.S. dollar index is softer. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.6% area.
Traders are watching the Federal Reserve’s April 28-29 meeting minutes, due Wednesday at 2 p.m. EDT, for signs that policymakers are becoming more concerned about energy-driven inflation. The gold market’s near-term setup remains tied to whether the Iran risk premium shows up mainly as safe-haven demand or as a stagflationary rates shock.
Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,660 to $4,680 resistance zone, with a sustained move targeting the 50-day moving average near $4,716 and then $4,800. Bears’ next near-term downside price objective is a break below $4,530, with deeper downside targets at $4,350 to $4,370 and then the 200-day moving average near $4,348. First resistance is seen at $4,585.20 and then at $4,660. First support is seen at $4,530 and then at $4,480.50.
Spot silver bulls’ next upside price objective is to drive prices back above the $78.00 to $79.00 area, with a move above that zone targeting $85.00 to $86.00 and then $89.00. The next downside price objective for the bears is a break below the 50-day moving average at $76.83, with deeper downside targets at $75.00 and then $71.00 to $72.00. First resistance is seen at $78.00 and then at $79.00. Next support is seen at $76.83 and then at $75.00.
