(OroyFinanzas.com) – Gold weakened after the close of the Comex session Thursday and opened slightly lower on Tocom. Long liquidation pushed the spot down to $665.00 first support level, which was sustained during the Far East session.
In London the metal fixed at $667.85 on the AM, down ten dollars from the previous AM one. It then remained very quiet and range bounded until the opening of the Comex division of the New York Mercantile Exchange. The first set of US economic data was out shortly after. Sales by US retailers fell 0.2 percent to as seasonally adjusted $372.03 billion in April assoaring gasoline prices and a slumping housing industry sapped consumers’ appetite for spending. These surprising weaker-than-expected figures (analyst expected a 0.4 percent rise instead of decline) came along with higher-than-expected US producer prices for April. Producer prices rose 0.7 percent when market expected a 0.6 percent rise. The US dollar weakened following the figures release sending the yellow metal higher. Prices climbed above $670 a couple of times, but at first had difficulty sustaining that level, falling back below it every time. The precious metal finally made it after the second London fix of $669 and a fall of 0.1percent in US business inventories in the month of March.
Short covering and follow through buying took the market up to $672.50 with the prices subsequently hovering on the top side of the intraday range until the close. The rally was also supported by firmer oil prices. Indeed, oil climbed towards $67 a barrel on supply disruptions in Africa, due to tensions in Congo’s Republic and militant attacks against Nigeria’s oil industry. The International Energy Agency (IEA) said that the motor fuel supplies in the United States have sunk to a 16-year low for the time of year. Therefore it called today for the Organization of the Petroleum Exporting Countries to boost oil output before the summer to prevent a sharp decline in consumer nations’ crude stocks. We believe that gold is still in an uptrend despite the correction in the past days, but would need to consolidate before going higher.
Aggressive selling on Tocom put silver under pressure, straggling to hold the $12.95 level. The metal however managed to recover back above $13 helped by bargain hunters and short covering. In Europe silver fluctuated on both sides of the $13 level with nothing really out there to report.Prior to the opening of the NY trading session the white metal started to gradually gain ground. Prices hit the high of $13.31 by the late afternoon and settled ten cents below the peak. We expect silver to remain bounded within a $13.00-13.30 range for the short term.
MKS Gold & Silver, Daily Report
By Moniah El Shikh
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