Tuesday, 17-April-2007
Gold opened just below Monday’s NY closing levels in Asia, but in theabsence of any follow through buying prices were limited to $690.30 perounce on the upside.
Due to the emerged long liquidation from the generalpublic shortly after Tocom opening the yellow metal slipped down to $687levels and remained on the bottom of the Far East range until the close. InEurope the precious metal further eased until the low of $686.30 was hit bymid-day. The metal however managed to rebound and fixed at $688 on thefirst London fixing, up 0.75 from the previous AM one. After the opening ofthe Comex division of the New York Mercantile Exchange US economic datacame out to be better than expected. The pace of US home construction roseto 1.518 million units in March verses 1.495 anticipated, with an increasein building permits of 0.8 percent. The overall March consumer prices stoodat 0.6 percent as projected, while the so called core prices edged up by aslimmer than estimated 0.1 percent. There was no immediate reaction fromgold, but it eventually climbed higher with prices extending the overnightpeak to $690.80 per ounce. Profit taking however did not allow the preciousmetal to sustain the gains despite slightly firmer crude after a leak on aCanadian pipeline to the United States and expectations of further drop inUS gasoline stocks. Subsequently US industrial production came out to belower than forecasted. A Federal report showed that that was due to a sharpdecline in utility output fueled by cold weather. The yellow metal couldnot attract enough buying interest which could propel it higher andremained bounded by a narrow range below $690 for the last couple of hoursof a very quiet NY session. We believe that after a period of consolidationgold might be heading towards the $700 main target.
Silver spent the entire Far East session hovering in a narrow rangeabove the $14 level. In Europe the white metal became choppy and volatile.Selling pressure pushed the prices sharply below the $14 support levelseveral times, with the dip every time followed by a recovery back abovethat level. Prior to the London fixing spot plunged down to $13.89 and halfan hour later the metal fixed seven cents above the low. The grey metalthen spent the whole NY trading session plunging down to $13.90 levels andrecovering back up to 14.05. The prices finally did manage to stabilizeabove the 14 dollar mark as copper hit new highs on supply worries. Webelieve that silver needs to undergo a period of consolidation before thenecessary momentum to head higher could be acquired.
MKS Gold & Silver, Daily Report
By Lidia Nazarova
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