Gold, silver rally on weaker USDX, better demand hopes

Gold and silver are extending a sharp rally, with June gold up $63.50 to $4,831.50 and May silver up $3.59 to $79.27, as a weaker U.S. dollar index, lower Treasury yields and softer crude support safe-haven buying. Kitco notes the dollar index hit a six-week low overnight, while WTI was down around $93.50/bbl and the 10-year Treasury yield hovered near 4.25%. The macro backdrop is mixed but still supportive for metals: March U.S. PPI rose 0.5% m/m, in line with the prior month and well below the 1.1% consensus, while core PPI slowed to 0.2% m/m from 0.5%. Headline PPI was still up 4.0% y/y, the strongest since February 2023, but the report had little immediate impact on metals. Kitco says improved risk appetite is paradoxically helping precious metals on expectations of better consumer/commercial demand and the prospect of easing inflation pressure if U.S.-Iran truce talks resume. Technically, gold bulls are now targeting a close above $5,000, with first resistance at $4,888 and $4,900; support sits at $4,767.50 then $4,700. Silver bulls need a close above $80, with resistance at $82.50 and support at $77 and $75. Near-term trade will likely hinge on whether the dollar and Treasury yields continue to soften, and whether geopolitical headlines keep supporting both safe-haven demand and industrial demand hopes.