(OroyFinanzas.com) – There was very little interest in the market overnight and gold remained hovering around the $656 level. In Europe the metal rallied up twohours after the opening to fix at $657.60 an ounce on the first London fixing, boosted by physical demand and by a weaker US dollar against major currencies.

The dollar lost ground against the euro after European Central Bank officials hinted at more euro zone interest rate increases and investors rushed to take profits on the dollar’s recent rise. Gold climbed further during the Comex division of the New York Mercantile Exchange, breaching the $660 level relatively quickly, despite softer Brent crude prices as concerns over further supply disruptions in Nigeria eased. Spothold firmly above $660 although the European Central Bank said that gold and gold receivables held by euro-zone central banks fell from 191 millionseuros to 180.024 billion euros in the week ending May 25, after sales by three central banks. The surprising strong US sentiment (the consumer confidence rose by more-than-expected to 108.0, while economists forecast 105.0) did not put the metal under direct downward pressure but later prices dipped down to the $657 level and closed near there.

Additional economic data are awaited during the week, as the minutes from the US Federal Reserve due on Wednesday and the first quarter gross domestic product growth numbers on Thursday. We believe that gold will remain supported by geopolitical concerns and oil prices. Prices should find support around the $650 and the first resistance continues to be provided by the $660 per ounce.

Silver was also little active in the Far East, with $12.90 seeming to provide a support. During the early European hours bids enabled the metal to drift higher and fix at $13.02, down only 2 cents from the previous one. Subsequently following gold in its upside silver jumped to breach the $13 level after the opening of the Comex Division of the NY Mercantile Exchange, eventually reaching the high of $13.24 by the mid afternoon. The white metal could not hold on to all the gains but closed on the upside of the intraday range. We believe that once the $13 level is sustained silver could head higher.

MKS Gold & Silver, Daily Report
By Moniah El Shikh

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