(OroyFinanzas.com) – Gold was very dull and stagnant in Asia today. Prices failed to stabilize above the $666 level, but got supported below $665. During the European trading hours the same quiet and range bounded scenario prevailed.
The yellow metal was inactive but firm, supported by the Britain keeping uppressure on Iran to release 15 military personnel seized last week, while the world’s fourth biggest oil exporter, Iran, continues to insist that Britain must accept its crew was arrested in Iranian waters. Britain said that it is waiting for details on an undertaking by Tehran to allow diplomats to meet sailors who did not yet have any contact with British officials. Many in UK were angered by the release of the video of the only woman crew member captured wearing a black headscarf and smoking a cigarette. Britain said that parading the female sailor was completely unacceptable and humiliating for the troops, while US called the Iran’s behavior as “reprehensible” and “odious”.
Britain is now seeking approval from the UN Security Council for a statement that would “deplore” the detention of the military personnel and call for their immediate release.The tensions were further escalated by an incident at the Iranian consulate in Iraq, which the British military denied and called a “geographical coincidence”. Iranian consul in the Iraqi city of Basra said today: ”They came at 10 am and surrounded the consulate. After 20 minutes they started shooting in different direction. They are trying to irritate us because of the issue of the capture of the British soldiers, but this behavior will make the issue worse”. The consul described the act as a provocative one at a time of heightened tensions between the two countries. The detention ofthe militants coupled with United States conducting its largest exercise inGulf waters since 2003. Russia warned US today that it must take care not to aggravate tensions over Iran with its naval presence in the Gulf as any escalation could hit crucial oil supplies from the area.
By the mid-day the situation was aggravated by the statement from the secretary of Iran’s Supreme National Security Council broadcasted on the state television about the fact that the country will delay the release of the woman among the 15 British military personnel if Tehran was faced with a “fuss and wrong behavior” from Britain. Gold however did not manage to break higher, as selling orders above $666 kept capping the market and this is despite oil trading above $66 per barrel. After the opening of the Comex division ofthe New York Mercantile Exchange the US economic data came out to be better than expected. Initial jobless claims surprisingly fell to a seasonally adjusted 308,000 verses 318 thousand anticipated. The reading was at its lowest since more than two months. The four-week moving average of claims also fell, for the third straight week.
The US gross domestic product (GDP), which measures total goods and services output within the country’s boarders, was stronger in the forth quarter than earlier estimated. According to the Commerce Department that was due to the higher levels of business inventories. Larger inventories can reflect a backlog of unsold goods or businesses building stocks up in anticipation of better salesahead. The personal consumption expenditures excluding the volatile food and energy items, a prices gauge favored by the Federal Reserve, advanced at a slightly lower 1.8 percent in the fourth quarter. The Fed Chairman said that the potential inflation remains the US central bank’s primary policy concern. After the data release the yellow metal plunged over one percent lower, briefly dipping below $660, on slightly firmer US dollar and fund selling. Prices then hovered just above the 660 dollar mark for sometime, supported from falling further by crude gaining over a dollar on the day. After a period of hesitation the precious metal continued its descent, hitting stops below $660 and extending the low to $655.60 on follow through selling and end-of-quarter liquidation. Prices however managed to recover the majority of the intraday losses as short covering emerged on the back of London Brent (LCOc1) hitting the high of 68.22 per barrel and settled above $660 per ounce. We believe that gold should obtain some support around the $655 level with the major resistance still lying in the region of $668.
Silver followed exactly the same scenario as gold. The metal was extremely quiet and range bounded in Asia and London, with nothing out there to report. After the opening of the NY trading spot started to loose ground, with the descent continuing all the way down to $13.10. Eventually prices managed to recover practically all the intraday losses and settled above $13.30 per ounce. We believe that in the short term the $13 level should provide a firm psychological support, where as the major resistance remains at $13.50.
MKS Gold & Silver, Daily Report
By Lidia Nazarova
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