(OroyFinanzas.com) – Gold was traded higher during the electronic trading due to good buying but prices came off when Tocom opened. During the early European hours, except at the fixing time where it reached the high of $662.80, gold pared all the gains and went gradually down.

The US dollar’s strength put pressure on the precious metal, as a higher dollar makes gold more expensive for holders of other currencies. Shortly after the opening of the Comex Division of the NY Mercantile Exchange, Chicago Fed Nat’l activity index was released. The data showed that employment, consumption, housing and sales were the cause of the fall in the National Activity Index. The Chicago Fed said the Index stood at -0.10 in April verses the March downwardly revised reading of -0.11. Following this report that suggests little inflationary pressure over the coming year spot barely moved but drifted slightly lower after a while, despite supportive crude oil prices. Indeed, crude oil rose as uncertainty about OPEC-exporter Nigeria’s production continued after unknown intruders broke an unused oil well operated by French oil company Total.

Oil markets are boosted also by Iran’s nuclear power dispute with the west. Afterwards spot revisited the $657 levels but quickly rebounded over a dollar higher. Then the trend reversed. By the mid afternoon the yellow metal fixed at $658 an ounce, up$1 from the previous PM one, and continued to climb to trade above the $660 level less than an hour later. As soon as this important level was breached, and despite the selling interest, gold was able to further extend the high to $663.80, helped by Brent prices edging above $70 a barrel. We think that gold is still in a consolidation phase and should sustain the $660 level in order to head towards more bullish prospective.

Silver had a tight range in the Far East. As for gold, the white metal challenged the upside in the beginning but dipped later due to selling pressure. Spot continued its gradual descent until the close. In Europe, silver saw some ups and down during the morning session and tired to challenge the $13 resistance a couple of times. It however failed to hold on to the gains and tumbled along with gold fall. When New York market opened prices slipped further, down to $12.85. However as well as gold, silver experienced a surprising turn around during the afternoon. The metal recovered all the intraday losses by the mid afternoon, followed by a break above the psychological resistance of $13. For the rest of the day prices remained hovering firmly above that level. We believe that silver mighthave further upside potential if the $13 level is sustained.

MKS Gold & Silver, Daily Report
By Moniah El Shikh

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