Friday, 27-April-2007
Gold opened a dollar lower on Tocom compared to the NY closing pricelast night. Subsequently general pubic selling ahead of the long holiday inJapan pushed the yellow metal down to $671.50. Prices then rebounded, butremained in a very narrow range.
In Europe the picture did not change withthe market being extremely quiet and dull. The precious metal remainedsidelined until about 13 o’clock in the afternoon (Geneva time) when pricesstarted to gain some ground. After the opening of the Comex division of theNew York Mercantile Exchange the US first-quarter GDP came out at 1.3percent, which is weaker that the 1.8 percent forecasted by Wall Streetanalysts. Gross domestic product, GDP, is a measure of total goods andservices output within the country’s borders. According to the CommerceDepartment the reading was the weakest in four years with the economicgrowth being slowed down by lower exports and a steady slide in spending onhomebuilding. The personal consumption expenditures excluding food andenergy items, which is a price gauge favored by the Federal Reserve,increased at slightly higher than expected 2.2 percent rate. The data islikely to keep policy makers concerned about the potential for a pick up ininflation. After a disappointing GDP numbers dollar fell to a record lowagainst the euro and gold climbed further. The high of $678.80 waseventually reached with the yellow metal then very quietly hovering above$675 level for the last two hours of trade and settling on a firm note. Webelieve it is important for gold to sustain the first $670 support in ordernot to experience a further correction down to $650 levels.
Next week the following US economic data will be awaited: personalspending, core PCE along with Chicago PMI and construction spending due onMonday; manufacturing ISM and pending home sales out on Tuesday; ADPpayrolls estimate and factory orders on Wednesday; initial jobless claims,productivity as well as non-manufacturing ISM index due on Thursday; tofinally end the week with the release of the non-farm payrolls andunemployment rate.
Silver followed exactly the same pattern as gold. The metal wasextremely quiet in Asia as well as in London. Prices fixed at $13.35, down31 cents from the previous fixing. The white metal then finally headedhigher and hit a peak of $13.51 during the NY trading session, but failedto hold on to the gains and settled just above $13.40. We believe thatsilver could drop further if the $13.40 important technical level is notsustained.
MKS Gold & Silver, Daily Report
By Lidia Nazarova
Disclaimer
