(OroyFinanzas.com) – An interesting day for all commodity related products, with Asia experiencing only a tiny range after the post new year buying. London came in fairly neutral with gold and silver close to 640 and 13.00 respectively however any buoyancy was short lived as traders pushed the precious lower with base metals, a weakening energy market and the EUR USD pushing to break 1.3200.
3 Month Copper contracts weakened further hitting stops under the key $6000/tonne mark after yesterdays 3.6 % fall due to greater warehouse surplus and the end of strike mine rumors. Oil remained weak all day with further medium temperatures out of the US, keep a eye out for DOE inventory figures tomorrow afternoon.
With a lack of further buying gold fixed down at 636.75 in the AM and silver 12.91, with noted banks large offers and some lending coming into the silver forwards in particular. Lows were hit just before COMEX New York session but the opportunity arose for large scale fund buying shooting prices higher again. ISM figures came in close to in-line with expectation sand although energy and base was still weak traders pushed for stops above 641.50 to burst gold and silver to the highs of the day at 644.90 bid. PM fix was also high at 642.60. Unfortunately this market cant seem to hold its intraday gains, a choppy market still exists and as bullish as everyone was this morning there was no follow through after the stops were hit and everyone turned major bear pushing gold down to the lows some 20 dollars away to 625.00/625.50. Silver followed down to its intraday low of 12.55. A case of ‘What Goes Up Must Come Down Harder’ when sell stops were hit also below 630. 00. Oil went for further losses breaking under the 60 dollar mark.
It lends me to think that although we are seeing the range and although the market should be more liquid with the inclusion of CBOT trade, electronic and manual Comex trade, spot trade and physical two way business, etc etc the market is still suffering Christmas/new year vacation liquidity problems. Stops on days like today are being hit on both the up and the down sides, no doubt clearing the trading order books and leaving the environment further exposed to large range trade and choppy seas. Assuming this characteristic lingers, expect to see a continued volatile start of the year.
MKS Gold & Silver, Daily Report
By Emanuel Georgouras