(OroyFinanzas.com) – Gold gained progressively ground throughout the Asian session, with continuous buying pushing it up to the $664 level. In Europe the metal was extremely quiet in the morning, fixing at $662.50 an ounce, up $5.4 from the previous AM one.
Prices climbed sharply prior to the opening of the Comex Division of the New York Mercantile exchange. Indeed, spot has drawn some support from news that the European Central Bank does not intend to sell anymore of its gold reserves before the current central-bank agreement year ends near the end of September. The ECB sold 37 tons of gold from its reserves over the last two months, sales ‘in line with the deal signed by15 European central banks’ according to it. Several US economic data were on the schedule for today; however the market discounted for the bullish US data before its release.
Labor Department data showed that the number ofnew US jobs (US May non farm payrolls) climbed by an unexpectedly brisk 157,000 in May, instead of the 130,000 forecast, on a surge of hiring inservice businesses while hiring in the factory sector continued to decline. Wall Street’s forecast was thus outstripped, while the monthly unemployment rate was unchanged from April. This stronger jobs data initially dimmed expectations of the Federal Reserve lowering borrowing costs, but below-forecast US inflation data was seen as leaving open the option of interest rate cuts. The core personal consumption and expenditure index, a favored measure of the Federal Reserve, rose just 0.1 percent, below the0.2 percent median forecast. Reacting to this data the precious metal drifted two dollars higher (despite the fact that US stocks futures extended gains) and spent the major part of the afternoon session trading below the $670 important level, while fixing at $666.50 an ounce, up $7.4 from the previous PM one. Spot finally breached the $670 resistance, tracking rising Brent crude prices by the late afternoon, although selling orders were accumulated around that level. We believe that today’s rally is a sign that gold is still in an uptrend and is likely to continue its ascent if the $670 level is sustained.
Silver was rather quiet overnight trading in a narrow range and facing some resistance around $13.50. In Europe the white metal was trying to consolidate above the $13.50 but had to wait until the opening of the NY trading session to head further North and eventually reach the $13.70levels. A slightly softer tone in the US dollar and recovery in Chinese equities helped gold as well as silver futures stage a rally. We believe that silver is at the moment well supported and has the potential to head higher if it consolidates durably above $13.50
MKS Gold & Silver, Daily Report
By Moniah El Shikh
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