(OroyFinanzas.com) – Gold had a narrow 2 dollars range overnight, with selling pressure above $675 and physical buying on the dips below $672/673. Prices eventually hit the high of $674.70 and settled near there.

During the early European hours, the precious metal was fairly quiet, hovering in a 2dollars range and fixing at $674.20 in the AM. The resistance of $675 was challenged once but gold could not hold to the gains due to profit taking at this level. The yellow metal after the opening of the Comex Division ofthe NY Mercantile Exchange began to slip amid silver weakness and despite firmer oil prices which usually push prices up. While no major US economic data were on the calendar for today, market participants were cautious and awaited the data due later in the weak to set near-term direction for the US dollar and for gold. The precious metal fixed in the afternoon at $670.20 an ounce before easing progressively and tumbling down to 666.60. Spending the rest of the Comex hours trying to recover, the precious metal failed in this attempt and fluctuated within a narrow range below $670 without enough interest out there to help it stabilize above this level.

No support was found in oil, which turned tail ahead of Bush fuel use speech, as a sudden drop in US gasoline prices halted crude oil’s rally. Gold remains however supported by the tensions between Iran and the West. Iran’s president Ahmadinedjad threatened the United States with ‘severe’ retaliation in case of US attacks against his country. We think that despite these supportive geopolitical factors and the apparent stabilization after last week’s sell-off, gold seems to be looking for direction and could be vulnerable to further correction if the $665 level fails to hold in the short-term.

Silver also had a tight range in Asia today. The Tocom market was capped by selling pressure around $13.25 and supported by short covering five cents lower. In Europe the white metal during the AM sessionwas range bounded but fell after the fixing below the technical support of$13.20. Today’s challenge was to consolidate above this level, but as soon as NY market opened, silver followed the same scenario as gold and as base metals (essentially copper and nickel). Profit taking triggered a sharp decline in prices forcing them eventually down to $13.05 level. During the rest of the afternoon, silver failed to regain its initial position and finally settled below $13.20. We believe that silver is likely to remain bounded by the $13.00-13.30 range in the short term until a clearer direction is established.

MKS Gold & Silver, Daily Report
By Moniah El Shikh

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