(Kitco NewsWire) - Spot gold and silver prices are sharply lower in early U.S. trading Wednesday, as lower oil prices, firmer global equities and reduced safe-haven demand outweighed support from lower Treasury yields. At the time of writing, spot gold was trading near $4,446.70 an ounce, down 1.35%, while spot silver was trading near $74.545, down 3.16% on the session.
The U.S. calendar is light, with the Richmond Fed manufacturing index due at 10 a.m. ET. The heavier macro tape comes Thursday, when April personal income and spending, durable goods orders and second-estimate first-quarter GDP are due at 8:30 a.m. ET, followed by April new home sales at 10 a.m. ET.
The Strait of Hormuz remains the main geopolitical transmission channel into energy, inflation expectations and precious metals, but Wednesday’s market is trading deal optimism more than escalation. Oil prices fell as U.S.-Iran negotiations were seen as still on track toward a possible peace agreement and reopening of the strait, even after recent U.S. strikes on Iranian boats and Iran’s retaliation against U.S. aircraft. Brent crude traded near $95 and WTI near $92, well below last week’s highs, easing inflation pressure and helping pull yields lower.
For gold, the current impact is negative from the safe-haven side because a credible reopening path reduces the conflict premium, but supportive through lower oil and lower rate pressure. Across other markets, the clearest effects are lower crude, firmer equities, lower Treasury yields and reduced stress in energy-sensitive sectors.
Global equities were mostly firmer before the U.S. open, tracking Tuesday’s record U.S. closes. Germany’s DAX rose 0.7%, France’s CAC 40 gained 0.5% and Britain’s FTSE 100 slipped 0.1%. S&P 500 futures edged up 0.1% and Dow futures gained 0.2%. In Asia, South Korea’s Kospi rose 2.3%, Taiwan’s Taiex gained 1.7%, Australia’s S&P/ASX 200 added 0.7%, Hong Kong’s Hang Seng lost 1.1% and China’s Shanghai Composite fell 1.3%.
The key outside markets see Nymex WTI crude oil prices lower and trading around $91.92 a barrel, while Brent crude was near $95.03. The U.S. dollar index is firmer. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.5% area.
Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,453 to $4,484 resistance zone, with a sustained move targeting $4,523 and then $4,538. Bears’ next near-term downside price objective is a break below $4,424.40, with deeper downside targets at $4,404.90 and then $4,319. First resistance is seen at $4,453 and then at $4,484. First support is seen at $4,424.40 and then at $4,404.90.
Spot silver bulls’ next upside price objective is to drive prices back above the $75.78 to $76.50 area, with a move above that zone targeting $77.00 and then $77.75. The next downside price objective for the bears is a break below $73.43, with deeper downside targets at $72.00 and then $70.00. First resistance is seen at $75.78 and then at $76.50. Next support is seen at $73.43 and then at $72.00.
