(OroyFinanzas.com) – Gold opened a dollar lower on Tocom compared to the NY closing price last night. Subsequently general public selling ahead of the long holiday in Japan pushed the yellow metal down to $671.50. Prices then rebounded, but remained in a very narrow range.
In Europe the picture did not change with the market being extremely quiet and dull. The precious metal remained sidelined until about 13 o’clock in the afternoon (Geneva time) when prices started to gain some ground. After the opening of the Comex division of the New York Mercantile Exchange the US first-quarter GDP came out at 1.3 percent, which is weaker that the 1.8 percent forecasted by Wall Street analysts. Gross domestic product, GDP, is a measure of total goods and services output within the country’s borders. According to the Commerce Department the reading was the weakest in four years with the economic growth being slowed down by lower exports and a steady slide in spending on home building.
The personal consumption expenditures excluding food and energy items, which is a price gauge favored by the Federal Reserve, increased at slightly higher than expected 2.2 percent rate. The data is likely to keep policy makers concerned about the potential for a pick up in inflation. After a disappointing GDP numbers dollar fell to a record low against the euro and gold climbed further. The high of $678.80 was eventually reached with the yellow metal then very quietly hovering above$675 level for the last two hours of trade and settling on a firm note. We believe it is important for gold to sustain the first $670 support in order not to experience a further correction down to $650 levels.
Next week the following US economic data will be awaited: personal spending, core PCE along with Chicago PMI and construction spending due on Monday; manufacturing ISM and pending home sales out on Tuesday; ADP payrolls estimate and factory orders on Wednesday; initial jobless claims, productivity as well as non-manufacturing ISM index due on Thursday; to finally end the week with the release of the non-farm payrolls and unemployment rate.
Silver followed exactly the same pattern as gold. The metal was extremely quiet in Asia as well as in London. Prices fixed at $13.35, down31 cents from the previous fixing. The white metal then finally headed higher and hit a peak of $13.51 during the NY trading session, but failed to hold on to the gains and settled just above $13.40. We believe that silver could drop further if the $13.40 important technical level is not sustained.
MKS Gold & Silver, Daily Report
By Lidia Nazarova
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