During the early UK trading the precious metal continued taking advantage from a softer US dollar to fix at 628.30 on the first London fixing. Speculation over US interest rate cuts next year prompted selling in dollar and as soon as it moves in an opposite direction with the yellow metal, gold profited. Subsequently the prices fluctuated within a two dollar range below $628 despite oil extending Tuesday’s losses as warmer than usual weather in the US Northeast and Midwest reduced demand for heating oil. Spot tried to challenge the upside during the Comex hours, but got limited to $629.30 to then fix 80 cents below the peak on the PM London fixing. The only US economic report on the day came out to be better than expected. New home sales rose to an annualized rate of 1.047 million units in November verses 1.015 million anticipated. According to the government report the sales were however down 15.3 percent from a year ago. The prices lost some ground, but remained firmly above 627 dollar mark until the close. We continue to believe that gold will remain within the wide $618-630 range in the short term and that volatility will carry on due to the thin holiday market conditions.

Silver had very little action in the Far East, but it managed to drift higher from the NY closing price last night and remained firm. In London spot gained ground mirroring its sister metal, followed by a fix at $12.86. This high was slightly extended after the opening of the Comex division of the New York Mercantile Exchange, but the gains could not be held on to and the white metal retreated more then ten cents shortly after. Spot however seemed to be well supported by the $12.70 level, above which it remained for the rest of NY hours. We continue to believe that silver will be volatile and enclosed within the wide $12.29-13.00 range for the short term.

MKS Gold & Silver, Daily Report
by Lidia Nazarova

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