(OroyFinanzas.com) – Gold hovered on both sides of the $670 level during the entire Asian session. In Europe the very narrow range prevailed, with gold fixing at $670.75 on the first London fix, up $8.25 from the previous AM one.
Iran’s supreme Ayatollah Ali Khamenei said its nation will not beg world powers for its right to develop nuclear technology and has shown it will not retreat from the ‘field of danger’ to protect such rights. Gold prices were thus helped, with the dollar weakness providing an additional support, staying near an eight-week high against the euro after a strong US employment report further trimming expectations the Fed will cut interest rates. Less than one hour before the opening of the Comex division of the NY Mercantile exchange, prices drifter higher, as Brent crude was trading above $69 a barrel on production disruptions in Nigeria. Although Nigerian militants called for a one-month truce, analysts doubt that the 18 months of violence would so rapidly come to an end. When NY market opened spot dropped and traded briefly below $670, but we could say that globally the yellow metal was holding well above the $670 support throughout the session.
By the late afternoon US April factory orders data came out. New orders at US factories rose a smaller-than-expected 0.3 percent (analyst forecast 0.7 percent) in April, the weakest reading since January. This enabled the metal to recover and fix at $671.10 on the second London fixand later reach the high of 673.70 per ounce. The metal drawn support from flat US stocks reacting to another sharp fall in the Chinese market and from Brent crude which surged to $70 a barrel on news a cyclone was headed towards the oil-producing Arabian Peninsula with a potential to disrupt shipping and output. Gold finally closed the session on the highs. We believe that gold is moving out of its correction phase and is likely to remain trading within the $665-$675 range for the next few days. This week market participants will be looking at Non-manufacturing ISM tomorrow, productivity and unit Labour costs on Wednesday, initial jobless claims, wholesale inventories and consumer credit on Thursday, to finally end the week with the international trade data.
Silver barely moved although two way business was seen overnight. Prices remained sidelined during the early European hours to then jump towards the $13.80 level prior to the Comex opening. Spot subsequently followed gold in its downside. The white metal however looked firm during the afternoon, seeming to be well supported below $13.65 and helped by recovering copper prices hitting their highest since May 16 with falling inventories and a potential strike in nine Mexican mines supporting the market. Consequently spot spent the last hours of trading hovering on the upper side of the intraday range. We believe that silver is in a good uptrend and has the potential to trade higher if the $13.70 is sustained.
MKS Gold & Silver, Daily Report
By Moniah El Shikh
© OroyFinanzas.com