Strong price gains for gold, silver on U.S.-Iran ceasefire
NEW YORK (April 8) Gold and silver prices are posting strong gains and hit three-week highs on the overnight news that the U.S. and Iran have reached a two-week ceasefire deal. The deal pushed the U.S. dollar index sharply lower, which is bullish for the metals. June gold was last up $140.60 at $4,827.60. May silver prices were up $5.50 at $77.45.
Latest on the war in the Middle East…
--U.S., Israel and Iran all agree to two-week ceasefire and will discuss a deal to end war
--Trump says U.S., Iran will work together to destroy Iran’s enriched uranium
--Israel continues combat in Lebanon--U.S. to help with Strait of Hormuz shipping traffic--Relief rallies sweep through global stock, financial markets; oil and gas prices tumble--Pakistan says it will host talks Friday; U.S. has yet to confirm attendance--Explosions reported earlier at Iran’s Lavan refinery; timing, source unclear--Across Europe, Middle East, Asia, shipowners cautiously optimistic on opening of Hormuz--Global benchmark Brent crude trading 13% lower, near $95; Nymex oil also near $95
Details remain scant on how the reopening of the Strait of Hormuz will be carried out. “That won’t dispel the fears shipowners have been grappling with over the past six weeks, as Iran lobbed missiles and projectiles at vessels. Until now, owners have been making plans to have their ships on standby. They are also reaching out to insurers and security consultants for advice,” Bloomberg reported. Ships of all types were seen today clustered on either side of Hormuz, around Dubai in the Persian Gulf and Khor Fakkan in the Gulf of Oman, said the report. “We now have two weeks of respite,” said Vincent Juvyns, chief investment strategist at ING in Brussels. “It remains to be seen whether the crisis is really over but its impact on oil prices will remain. Whatever happens we’re heading towards slower global growth and higher inflation this year,” he said and as reported by Bloomberg.
Fed’s FOMC minutes out this afternoon. The Federal Reserve’s minutes from its last Open Market Committee meeting (FOMC) held in mid-March are out early this afternoon. Traders and investors will closely scrutinize the minutes for fresh clues on the Fed’s thinking on inflation, U.S. monetary policy trajectory and the Middle East war’s impact on the U.S. and global economies.
U.S. consumers expecting higher inflation: N.Y. Fed survey. Near-term U.S. inflation expectations jumped in March as consumers anticipated higher gas and food prices with the onset of war in the Middle East. U.S. consumers expected an inflation rate of 3.4% over the next 12 months, up 0.4 percentage points from February, according to the New York Fed’s monthly Survey of Consumer Expectations. Households expressed more pessimism over their finances, with a larger share reporting a worse financial situation compared to a year ago and expecting their finances to deteriorate over the next year.
USTR Greer proposes U.S.-China board of trade… Top U.S. trade official Jamieson Greer has promoted the creation of a U.S-China board of trade, while downplaying the possibility of a similar group focused on bilateral investment, a sign of what could be at the center of talks when Chinese President Xi Jinping and President Trump meet next month, Bloomberg reports. “We’re looking at that kind of mechanism where we can work with the Chinese to figure what are the non-sensitive goods we should be trading with each other, get a handle on that, figure out what those flows should look like,” said Greer Tuesday during an event at the Hudson Institute in Washington. “Then you’re in a better position to talk about stickier issues,” he added. The Trump-Xi summit was initially scheduled for March 31-April 2, but was delayed after the start of the Iran war in late February. Trump is now planning to travel to Beijing from May 14-15.
The key outside markets see Nymex WTI crude strongly down and trading around $94.50 a barrel. The U.S. dollar index is sharply down and at a four-week low early today. The yield on the benchmark 10-year U.S. Treasury note is presently 4.234 percent.
KitcoNews
