Monday, 30-April-2007
There was very little interest in gold overnight as Japanese were outdue to the Golden week. The yellow metal opened above $680 on theelectronic trading, but got capped around $681.50 per ounce by profittaking.
After the opening of London selling persisted, forcing the pricesdown to $676.30 and subsequently fixing at $678, up 5.5 dollars from theprevious AM. The precious metal then turned around and gradually regainedground. After the opening of the Comex division of the New York MercantileExchange the first set of US economic data came out. The country’s incomerose a greater than expected 0.7 percent in March, while core consumerprices were unchanged. The core prices from the same month a year ago easedto a 2.1 percent, while the overall prices posted their largest gain sinceAugust, rising 2.4 percent from a year ago. US dollar retreated slightly asinflation worries eased a little, which allowed gold to break above the$680 resistance level again. Technical selling however once more did notlet the metal to sustain that level. Prices revisited the bottom side ofthe intraday range two hours later despite the National Association ofPurchasing Management Chicago business barometer falling to 52.9 in Aprilverses a reading of 54.00 anticipated. The weaker index was partially dueto the sharp growth pullback, but as soon as it is above 50 it is stillindicating expansion. The US construction spending rose 0.2 percent lastmonth as projected, with the February data upwardly revised. Sellinginterest was seen the second London fix. Prices started trying at $678, butin the absence of buyers we eventually fixed a dollar below the startingpoint. The yellow metal was extremely quiet, spending the last couple ofhours of NY trade hovering below the $681 level which seemed to attractsubstantial selling orders and capping the upside. We continue to believethat gold could be vulnerable to further correction if the $670 level failsto hold. On the other hand we would need some more positive sentiment fromthe market players in order to breach the resistance around $681-682 levelsfollowed by $690.
Silver also firmed after the market closed Friday with the pricesreaching a peak of $13.54 and seeming to find support just below the 13.50dollar mark. During our time zone the overnight range was extended on thedownside. The white metal was sold down to $13.42 levels several timesduring the day, but every time found enough short covering interest torebound back to around $13.50 per ounce. We believe that further downsidecannot be ruled out, especially if silver fails to sustain the $13.40support.
MKS Gold & Silver, Daily Report
By Lidia Nazarova
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