Mild price pressure on gold, silver ahead of Iran deadline
NEW YORK (April 7) Gold and silver prices are down a bit in early U.S. trading today, ahead of a U.S.-imposed deadline of this evening for Iran to open the Strait of Hormuz, or else. June gold was last down $11.20 at $4,673.00. May silver prices were down $0.792 at $72.07.
Latest on the war in the Middle East…
--Trump sets deadline deal, including reopening Strait of Hormuz, by Tuesday 8 p.m. ET
--Iran keeps up attacks before U.S. deadline, dimming peace chances
--Iran rejects U.S. proposed ceasefire terms
--Iran’s demands include a permanent end to fighting and the lifting of sanctions
--Israel warns Iranians to avoid the country’s railway network until 9 p.m. local time Tuesday
--Saudi Arabia intercepted ballistic missiles fired overnight
China ramps up gold buying amid Middle East war. China’s central bank bought the most gold in more than a year in March, “demonstrating that a key pillar of support for the precious metal remains intact as prices come under pressure amid the Iran war,” said Bloomberg in a report. Bullion held by the People’s Bank of China rose by 160,000 troy ounces last month, or about 5 tons, according to data on from the World Gold Council today. The central bank, among the world’s largest buyers, has added to holdings for 17 months straight. Gold prices sank 12% in March — the worst monthly performance since 2008 — as the conflict that ripped across the Middle East boosted the U.S. dollar and spurred bets that the Federal Reserve wouldn’t be able to cut interest rates if inflation picked up. “The PBOC’s latest purchases may help to bolster investor confidence in gold, at a time when some other central banks have turned to sales. In March, Turkey’s central bank sold and swapped about 60 tons to defend the lira, said the report. In the first two months of the year, central banks bought a net 25 tons, according to an estimate from the World Gold Council last week. The National Bank of Poland picked up 20 tons in February, driving much of the buying.
U.S. oil-shale drillers to increase output. U.S. shale drillers are expected to follow President Trump’s call for higher U.S. crude oil production. “The 68% surge in crude prices since the U.S. and Israel commenced attacks on Iran roughly five weeks ago is incentive enough to compel American oil executives to ramp up output, according to observers as diverse as Citigroup Inc., Enverus Inc. and government analysts at the Energy Information Administration,” Bloomberg said in a report. Shale explorers require oil prices somewhere between $62 and $70 a barrel to turn a profit on new wells, according to the Federal Reserve Bank of Dallas. “Elevated prices are certainly going to increase production in the United States,” Mike Sommers, chief executive officer of industry lobby group the American Petroleum Institute, said during a Bloomberg Television interview. “You are going to see that over the course of the next few months.”
The key outside markets see Nymex WTI crude oil higher and trading around $114.00 a barrel. The U.S. dollar index is slightly up early today. The yield on the benchmark 10-year U.S. Treasury note is presently 4.34 percent.
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