(OroyFinanzas.com) – Good buying propelled gold higher during the first Asian hours,then prices remained trading in a very narrow range above the $657 level.

In Europe, spot made a sharp attempt on the upside after the AM fixing of$657.10 an ounce, following the Royal Dutch Shell saying 150, 000 barrelsper day of production were cut at a key Nigerian oil terminal after villagers sabotaged pipelines. The yellow metal retreated slowly prior tothe opening of the Comex Division of the New York Mercantile Exchange and the sell-off continued for a while as the US dollar strengthened against major European currencies. Indeed, investors looked to minutes from theFederal Reserve’s last policy meeting for further evidence that US interestrates may not be cut this year. As a stronger US currency makes dollar-denominated metals costlier for holders of other currencies, the metal came under further downward pressure. Meanwhile Brent crude slipped below $68 a barrel, the fourth straight day of losses, reflecting increased gasoline output in top consumer the United States and easing concerns about Nigerian production after Shell said it had begun restoring 150,000 barrels per day of crude oil production.

The metal fixed subsequently at $652.65 onthe second fixing, down $7.5 from the previous PM one. Gold rebounded and then spent the rest of the afternoon session stagnating around the $654 levels, the market being very quiet and hesitating. We believe that despite the geopolitical tensions providing a support (Iran’s top nuclear negotiator said the day before talks with EU foreign policy chief Javier Solana that Iran will not suspend uranium enrichment, the key UN demand ina nuclear row with Tehran) gold is still in a consolidation phase. The critical $650 support has to be hold in order to not drop further down andmark new lows.

Silver gained some ground after Tuesday’s close of $13.17. During the Tocom session the white metal traded firmly above the $13 support level and faced some resistance around $13.20. In Europe, spot saw some ups anddown, while fixing at $13.11, up 8 cents from the previous one. Silver globally followed gold in its downside however it remained firm throughout the Comex session, trading within a relatively tight range and closing on the upside of the intraday range. We believe that the white metal is likely to remain range bounded in the short term, with $13 as a first support and$13.20 a resistance.

MKS Gold & Silver, Daily Report
By Moniah El Shikh

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