(Kitco NewsWire) - Spot gold prices are down and spot silver prices are sharply lower after the close Wednesday, as a sharp drop in crude oil and record U.S. equity closes reduced safe-haven demand tied to the Strait of Hormuz. At the time of writing, spot gold was trading near $4,454.80 an ounce, down 1.17%, while spot silver was trading near $74.665, down 3.00% on the session.
Fifth District manufacturing activity improved in May, with the Richmond Fed composite index rising to 13 from 3 in April. Shipments rose to 16 from -2, new orders increased to 17 from 8 and employment rose to 3 from 0. The data were firm enough to keep Friday’s inflation tape in focus, with durable goods, second-estimate first-quarter GDP, personal income and spending, the PCE price indexes, new home sales, wholesale inventories and Chicago PMI still due before the week closes.
The Strait of Hormuz remains the main geopolitical transmission channel into energy, inflation expectations and precious metals, but Wednesday’s trade was dominated by a de-escalation bid. Oil fell to its lowest level in more than a month after reports that a possible U.S.-Iran peace agreement could reopen the strait within one month, with the draft framework said to include restored commercial shipping through Hormuz and a U.S. withdrawal from nearby military positions. The deal is not final, and President Donald Trump accused Iran of trying to delay talks, leaving headline risk intact.
The current impact on gold is negative through reduced haven demand, even though lower oil also eases inflation pressure and Treasury yields. Across other markets, the clearest signals were lower crude, weaker energy shares, softer Treasury yields and record closes for the S&P 500, Dow and Nasdaq.
U.S. equities closed at record highs as oil’s decline outweighed caution around inflation and geopolitics. The S&P 500 rose 1.24 points, or less than 0.1%, to 7,520.36, the Dow Jones Industrial Average gained 182.60 points, or 0.4%, to 50,644.28 and the Nasdaq Composite added 18.55 points, or 0.1%, to 26,674.73. The Russell 2000 slipped less than 0.1% to 2,919.94. Oil-and-gas shares fell after crude dropped more than 4%, while Treasury yields eased.
The key outside markets see Nymex WTI crude oil prices lower and trading around $88.68 a barrel, while Brent crude was near $94.29. 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 $4,551.10 to $4,600 resistance zone, with a sustained move targeting $4,640 and then $4,678. Bears’ next near-term downside price objective is a break below $4,450, with deeper downside targets at $4,400 and then $4,373. First resistance is seen at $4,551.10 and then at $4,600. First support is seen at $4,450 and then at $4,400.
Spot silver bulls’ next upside price objective is to drive prices back above the $75.00 to $75.78 area, with a move above that zone targeting $76.50 and then $77.65. 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 $75.00 and then at $75.78. Next support is seen at $73.43 and then at $72.00.
