(OroyFinanzas.com) – Gold was extremely quiet overnight with the Japanese market closed for holiday. Prices tried to challenge $660 per ounce, but offers accumulated around that level capped the upside. During our time zone the same dull scenario prevailed.

The yellow metal fixed at $660.50 on the first London fixing and extended the high to $662 by mid day. Prices then stagnantly hovered on both sides of the 660 dollar mark with market participants cautious about taking new positions ahead of the release of the Fed interest rate decision. Federal Reserve is widely expected to leave interest rates unchanged, but investors believe that interest rate cuts might be possible some time later this year due to the concerns about the US subprime mortgage sector. Following the deterioration in the subprime market many expect Fed to adjust their language slightly and take a more neutral stance. The weekly report from Energy Information Administration said today that crude inventories jumped by far more than anticipated in the week ended March the 16th, while gasoline stocks draw was much greater than projected. According to the government report the fall in gasoline inventories was due to a solid demand and slow imports as refineries struggled to return from maintenance. The demand for the refined products over the past month is up 4 percent over the same period a year earlier. Crude oil hardly reacted to the date release, while gold lost some ground on a slightly firmer US dollar. The precious metal fixed at $658.75 on the second London fixing, down 25 cents from the previous PM one and then further extended the downside to $657.60. Prices recovered some of the intraday losses, but remained below the $660 level until the settlement. After the close Fed announced that the interest rates were left unchanged as expected, at 5.25 percent. We believe that gold needs to stabilize above the 660 psychological level in order to be able to acquire further gains.

There was clearly luck of interest in silver today, as market players remained sidelined ahead of the FOMC announcement. Overnight prices remained in a narrow range above $13.30, with the same picture repeating in London. Prior to the opening of the Comex division of the New York Mercantile Exchange the white metal made a move on the upside, but in the absence of any follow through was limited to $13.37. After some time of range trading prices followed gold in its weakness and briefly dipped below the 100-day moving average of $13.18. After a very boring day we finally settled just below $13.30. We believe that as soon as the $13.18 support holds silver has a possibility to go higher after a period of consolidation.

Please note that the Comex market will be opening and closing one hour earlier for the whole current due to the earlier change to summer time in America.

MKS Gold & Silver, Daily Report
By Lidia Nazarova

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