(OroyFinanzas.com) – Japanese market players had hardly any interest today for gold as they could hardly wait until the National Holidays next week, on Monday, Thursday and Friday. Gold hovered in less that a two dollar range on Tocom with selling above $686 capping the upside.
In Europe the scenario barely changed. Prices remained sidelined above $685 and extended the overnight high to$686.90 just after the first London fixing. The yellow metal then started to loose ground on firmer UD dollar. The euro currency’s failure to reach fresh record highs against the greenback tempted investors to buy back the US dollar across the board. Dollar’s recovery made the precious metal more expensive and so triggered selling. Another factor that backed the metal’s weakness was the strength in the Dow Jones industrial average which crossed 13,000 for the first time yesterday and so attracted more money into the stock market. Crude also slipped, on the news of a possibility of somewhat easing tensions over Iranian nuclear program. Iranian nuclear negotiator Ali Larijani said today that Iran and EU were nearing “a united view” insome areas of their talks to break the impasse over Tehran’s nuclear fuel program. European Union foreign policy Chief Javier Solana said that talks had been constructive and conducted in good atmosphere, but the conversation was more about the mechanics of getting back into talks withsome progress being made.
Diplomats say that the key to a breakthrough is finding a definition of an enrichment suspension that both sides could tolerate. Despite the positive signs in Ankara senior officials in Tehran however continue to insist on the fact that Iran would strike US interests around the world and Israel if attacked over its nuclear program. Backed by Brent’s slide gold dropped five dollars to try and breach the $680 important support level prior to the opening of the Comex division of the New York Mercantile Exchange. Subsequently prices fluctuated on both sides of that level, but plunged lower shortly after as US initial jobless claim data came out much better than expected for the week ended on the 21st of April. The number of US workers filling new claims for jobless benefits fell to 321 thousand verses 330,000 projected. According to the Labor Department report there were no special factors behind the drop. Selling accelerated after breaking below the $680 technical level and the precious metal headed lower on continuing firming of the US dollar which liberated from the downward pressure from the expectations of an interest rate cut inthe near future. Central banks are growing less fixated on the importance of that key benchmark. In recent speeches Fed officials have argued that what was increasingly important to them is public confidence that central banks will act to restraint inflation pressures. The yellow metal reached a two-week low of $673.10 followed by the second London fix of below the spotmarket, at $673. Prices then rebounded slightly, but another wave of selling shortly after further extended the downside to $671.50. The metal remained weak for the last hour of trade and settled at $675.25. We believe that if the $670 level is breached gold might be heading towards $650 withon the other hand the first resistance now being provided by $680 per ounce.
Silver was also very quiet on Tocom. There was hardly any range withthe prices reaching the high of $13.82 and the low of $13.80. During the early European hours the same stagnant scenario persisted until about midday when the trend turned clearly bearish. Copper failed to break abovea critical resistance of $8,100, which boosted selling pressure on thosewho were holding long positions after a four-day strike in Indonesia last week sent it to its highest levels in seven months. Copper dropped three percent dragging silver with it. This one-way downside road continued throughout the NY trading session with spot eventually reaching the low of $13.20. The white metal only fractionally recovered the intraday losses andclosed Comex session on the lower side of the range. We believe that silvercould drop further if the $13.40 important technical level is not regained.
MKS Gold & Silver, Daily Report
By Lidia Nazarova
© OroyFinanzas.com