Monday, 2-April-2007
Market was very thing and quiet overnight, on the first day of thenew fiscal year for most of the Japanese companies. Gold traded up to $666paid on the EBS, but Tocom pre-open selling took the prices about a dollarlower.
The yellow metal remained bounded by a two dollar range throughoutthe Far East session with the $665 level seeming to provide a resistance.During the European hours spot did not manage to break higher as there wasvery little interest in the market. The metal continues to draw supportfrom the Iranian crises. The country’s television released a fresh footageof the 15 detained British naval personnel today. A report stated that theyhave all admitted entering Iranian waters illegally. The new video showedother members of the group talking and pointing to a map to show where theywere seized, but their voices could not be heard. The television reportsaid: “It seems that Britain has shifted a little bit from its stance inthe past one or two days over the undeniable fact. If this path continues,one can hope that the issue would be resolved in a bilateral process”. Onthe other hand British Foreign Office spokesman said that he did not thinkthat the position had changed as far as Britain is concerned – the sailorswere seized in Iraqi waters. Iranian President Mahmoud Ahmadinejad saidthat Britain should have apologized and some officials criticized Britainfor taking the issue to the United Nations. US dollar steadied againstmajor currencies as investors awaited key US economic data due later thisweek, which could provide hints about Federal Reserve’s future interestrate policy direction.
The precious metal lacked momentum for the pastcouple of weeks to break the key technical levels and a retreat in the oilprices due to profit taking somewhat lowered its inflation hedge appeal.Subsequently the prices extended the Asian range on the downside and fixedat $663.30 on the first London fixing, down 20 cents from the previous AMone. The metal’s weakness did not stop there with the spot progressivelyloosing ground. After the opening of the Comex division of the New YorkMercantile Exchange some follow through selling forced the prices down to$658 levels and after a short lived rebound further down to $656.50. TheInstitute of Supply Management said today that its index of nationalfactory activity fell to $50.9 in the month of March verses 51.1 expected.A reading above 50 indicates growth in the sector even though it slowedfrom 52.3 in February. Prices had difficulty recovering the losses andfluctuated around $660 levels for a couple of hours before the news of USofficials stating that they are seeking information from Iran about missingAmerican via Swiss diplomatic channels. The news pushed the yellow metal toslightly extend top side of the intraday range and closed there. We aremoving to a traditionally strong period of physical demand and we believethat that along with the firm oil prices and geopolitical tensions willcontinue to provide a support.
Silver barely had any range in Asia today with prices hovering justbelow the $13.40 level around which a lot of overseas selling interest wasseen. During our time zone a very quiet and narrow range trading prevaileduntil the opening of the NY trading session. The white metal then followedgold in its weakness and prices dropped all the way down to $12.99. The dipbelow the $13 psychological support was very short lived though. Spot thenmanaged to recover a majority of the intraday losses. We believe that inthe short term the $13.00-13.50 range will prevail.
MKS Gold & Silver, Daily Report
By Lidia Nazarova
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