(OroyFinanzas.com) – Gold was bounded by less than a two dollar range below $678 in Asia as well as during London trading hours. Market was extremely quiet, without much interest going through. Prices finally broke higher prior to the opening of the Comex division of the New York Mercantile Exchange and made it above the $680 resistance in the first couple of minutes of the NY session.

The first set of US economic data out shortly after was mixed. The trade deficit unexpectedly narrowed in February to $58.4 billion, which according to government report was due to a drop in oil imports and average imported oil prices at their lowest level since December 2005. Producer prices climbed by a greater than anticipated 1.0 percent in March, on rising energy costs. The core producer prices however remained flat last month and rose only 1.7 percent from the same period 12 months ago. The yellow metal then went stagnant again and kept retreating and recovering with selling interest capping the upside around $683 and buying emerging ondips down to $680 levels.

The precious metal fixed at $681.75 on the second London fixing, up 4.5 dollars from the previous PM, while preliminary US consumer sentiment reading was announced to have fallen to its lowest in eight months in April. In the late afternoon prices dipped down to $679 levels on the euro currency coming off today’s high of $1.3554, but that was short lived. Bargain hunters and fresh buying interest below $680 pushed the yellow metal higher, extending the intraday peak to $685.80 an hour before the close and settled on the highs. We believe that weakening US dollar and firm crude oil will continue providing support to gold, with further upside possible if the $680 level holds.

Next week the following US economic data will be awaited: retail sales along with NY Fed survey and business inventories due on Monday, CPI, housing starts and industrial productivity out on Tuesday, to end with initial jobless claims, leading indicators and Philadelphia Fed survey on Thursday.

Silver followed exactly the same scenario as gold today. It remained bounded by the $13.80/13.90 range on Tocom and during our time zone to start of with, with nothing out there to report. After the opening of the NY trading session prices rallied sharply, breaking above the $14 psychological resistance and subsequently marking the peak of $14.13. The white metal remained hovering above $14 per ounce practically for the entire Comex hours, with an exception of a brief dip below half way through the session. We believe that silver has further upside potential if the $14 level, which has now became a support, is sustained.

MKS Gold & Silver, Daily Report
By Lidia Nazarova

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