(OroyFinanzas.com) – Gold was fairly quiet on Tocom today, trading within a narrow $657/659.50. During the early European hours, weak prices attracted physical buyers back, while firm oil prices and steady base metals were supportive for the precious metal.
Spot started to gain ground and two hours after London opening it challenged the $660 level to subsequently fix75 cents above it. Brent crude helped to push gold up, hovering near a neight-month high around $70 a barrel as worries about gasoline shortages escalated, ahead of the peak summer demand. Prices then came under heavy downward pressure due to a rebound in the dollar and a sharp sell-off in base metals and were dragged lower after the opening of the Comex divisionof the NY Mercantile Exchange. After spending some time trading just above the $656, spot started to progressively recover, but faced strong resistance around $660 due to profit taking. We finally breached that limit by the mid afternoon despite the strong selling interest. US government report showed that US consumer sentiment unexpectedly improved in early May. It rose to 88.7 from 87.1 at the end of April. The report thus showed that some consumers were not rattled by the recent surge in gasoline prices, which leaded US stocks to briefly extend. Gold remained steady during the rest of the trading session, and hit the high of $662.10 bid. It finally closed on the upside of the intraday range. We still think that the metal could retest the resent lows, while breaking above $665 could mean a more bullish short term prospective.
Silver gained some ground after yesterday’s close, opening in Asia 3 cents higher. Spot was calm in the Far East, trading in a narrow range above $12.75, but could not breach the $12.90 resistance and settled on the lows of the day. In Europe the white metal steadied to fix at $12.87 an ounce. After the fixing spot plunged down. The retreat was sharp, with prices losing over 10 cents in an hour, but rebounding quickly afterwards.When the Comex Division of the NY Mercantile Exchange opened, prices continued to firm despite copper weakness on fears about falling Chinese demand. During the whole afternoon session silver progressively gained ground, however was not able to trade above the $13.00 resistance. Silver settled on the highs of the day. We believe that silver will remain range bounded, with $12.70 providing the first support and $13.00 the first resistance. If the psychological resistance is breached the white metal could make an attempt to head higher again.
MKS Gold & Silver, Daily Report
By Moniah El Shikh
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