(OroyFinanzas.com) – Gold firmed slightly after NY close Tuesday, but failed to break above $675 on Tocom as offers around that level capped the upside. In Europe the $675 resistance was once again fruitlessly challenged, followed by the first London fix of $673.25, down 4.25 dollars from the previous AM.
Subsequently the prices hovered on both sides of the $673 per ounce until about one o’clock in the afternoon Geneva time, when selling due to stronger US dollar started to come into the market. The euro currency slipped against the greenback to $1.3562 and the yellow metal eased below $670. Gold’s weakness was not interrupted by the weaker than expected Automatic Data Processing National Employment Report, 64 verses 100thousand estimated. The ADP report is a measure of employment based on an anonymous subset of ADP payroll data covering approximately 225,000 establishments and 14 million employees working in all 19 of the major North American Industrial Classification (NAICS) private industrial sectors. After the opening of the Comex division of the New York Mercantile Exchange the precious metal further extended the downside, plunging to$667.80 per ounce.
The European Central Bank said in its regular weekly consolidated statement that gold and gold receivables held by Euro system central banks fell by 195 million euros in the week ending April the 27th. The decline was due to sales by two central banks which were consistent with the 2004 Central Bank Gold Agreement. The yellow metal hesitated around the lower side of today’s range, hovering below $670, which was followed by the PM London fix of $669.50. The better than anticipated US March factory orders and durable goods orders maintained the downside pressure on the precious metal, but not for long. The According to the Commerce Department the new factory orders rose 3.1 percent verses 2.1 projected on a rise in civilian aircraft orders with the February figures upwardly revised.
The durable goods, which are meant to last three years or longer, rose 3.7 percent verses 3.3 forecasted. The precious metal finally rebounded, helped by the EIA report showing US gasoline stocks falling forthe 12th consecutive time in the week ended April 27 on low production from the nation’s refineries. According to the US Energy Administration Information the decline brought the inventories about 15 percent below levels in early February. Gasoline stocks usually grow in April and May asfuel suppliers prepare for peak summer driving demand, but a series of refinery outages limited output. Refinery utilization rates rose to 88.3 percent of capacity, but experts say that industry needs to reach 90 percent in order to start building inventories. Despite the recovery above $670 the yellow metal continued to look heavy as Brent lost over a dollar and it remained stagnant in a narrow range for the last two hours of trade.
Meanwhile Iran’s senior official said today that the country was capable of mass-producing machines used for enriching uranium, underpinning itsdetermination to press ahead with sensitive nuclear work. Iran aims to have3,000 centrifuges at its main enrichment plant, Natanz, by the end of thismonth. Diplomats and analysts however say that Iran has not shown the ability to run them for long periods without breakdown, which is the key toproducing nuclear fuel. They say that the country is at least 3-8 years away from making enough enriched uranium for a bomb. Tehran keeps on insisting that it wants only to generate electricity so that it can export more of its oil and gas. We believe that gold continues to be vulnerable to further downside correction if enough follow-through selling takes the market below $670 level for good.
Silver saw some physical related buying on Tocom, but selling interest from the overseas traders around $13.35 took the metal gradually lower. In Europe the Asian high was once more revisited, however shortlived again. Prices slipped lower, following gold in its euro triggered profit taking. The white metal hit a one-month low of $13.03 during the Comex trading hours, but turned around and regained the $13.20 levels fairly quickly. Spot then remained hovering on both sides of that level forthe second half of the NY session. We believe that silver is at the moment well supported by the psychological $13 level, but if it was to break, the metal will be faced with technical and stop selling which could take itmuch lower.
MKS Gold & Silver, Daily Report
By Lidia Nazarova
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