(OroyFinanzas.com) – Gold firmed slightly after Friday’s NY close, but spent a fairly quiet Far East session. Tocom had a two dollar range with the upside limited to $693.30.
In Europe the yellow metal eased and dipped below the$690 support level several times before fixing at $691 on the first London fix, up 3.4 dollars from the previous AM. The market was very quiet in the absence of any important economic data announcement with only Brent drifting slightly higher after Nigeria’s presidential elections drew condemnation from monitors and investors waited for fresh word on oil supplies from the world’s eighth biggest exporter. Nigeria could provide the impetus for a move out of the $64.76-69.59 range within which crude traded for the past four weeks due to the concerns of the violence cutting deeper into the output. Nigerian President Olusegun Obasahjo’s chosen successor was proclaimed victor today in the presidential poll. European Union observers as well as local coalition of civil society said however that the election could not be considered as credible, calling for the cancellation of the vote.
This popular dissatisfaction with the elections raises the possibility of sabotage directed at the oil industry. After the opening of the Comex division of the New York Mercantile Exchange the precious metal rallied, but as well as in Asia got capped by profit taking just above $693. Prices then once again slipped below $690, but this time due to the follow through selling the low was extended to $687.20. Subsequently the yellow metal hovered in a tiny range below $690 and only an hour before the close managed to get above it on the news that IranianPresident Mahmoud Ahmadinejad said in an interview today that the country will not agree to a European Union proposal of a “double suspension” of uranium enrichment and sanctions. He said: “Iran will not accept it because the sanctions are not legal, so you can not ask a country to suspend its legal activities in return for a suspension of an illegal move”. We believe that gold needs to break out of the $680-694 range within which it fluctuated since the beginning of last week in order to get a clearer direction.
Silver also had a very subdued start of the week. In the Far East the prices could not get above $13.95 while fairly well supported below $13.90. During our time zone the white metal became slightly more active. The downside was gradually extended to hit $13.87 prior to the opening of theNY trading session. Subsequently prices recovered the losses, but failed to break above the $13.95 level until about an hour before the close. Spot rallied up to $14.09 and settled above the $14 psychological level. We believe that silver has the potential to trade higher, but for the moment did not yet acquire enough momentum to break out of the $13.80-14.10 range.
MKS Gold & Silver, Daily Report
By Lidia Nazarova
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