(OroyFinanzas.com) – Constant selling kept pressuring the yellow metal overnight, forcing prices to settle slightly above $650. The downtrend continued during the early European hours and gold fixed at $650.60 an ounce on the first London fix, 15 cents lower than the previous AM one.

Prior to the opening of the NYsession spot extended the overnight low to $650 and then turned around during the Comex session. Prices further climbed following the release ofUS economic data. The US Labor Department reported a steady rise in food and energy costs pushing overall US consumer prices up 0.7 percent in May, the sharpest gain in more than 1-1/2 years. The core inflation however edged up just 0.1 percent, which is below expectations. Underscoring optimism about continued economic growth while inflation moderates, the data pushed up major US indexes. In a separate report the Commerce Department said the US current account deficit widened in the first quarter to $192.6 billion from a significantly downwardly revised estimate of$187.9 billion in the fourth quarter 2006.

The current account is the broadest measure of US trade with the rest of the world and includes goods, services and income flows. The huge US current account deficit is seen asone of the major risks to the US economy. Gold prices reacted to theses mixed figures by drifting higher to trade up to $654 levels. Half an hour later US May industrial production report came out, showing a surprising flat production as utilities output receded, while capacity utilization was at a weaker-than-expected 81.3 percent. Analysts were expecting industrial production to rise 0.2 percent and the nation’s factories, mines and utilities to use capacity at a 81.6 percent rate. A few minutes before the second London fix, consumer sentiment data was announced to have dropped unexpectedly in June to its weakest in 10 months, as higher gasoline prices dampened consumers’ mood. The decline was much sharper than predicted by economists, who had forecast a median reading of 88.0. Subsequently US stocks pared gains after this lower-than-expected reading and gold fixed at$653.10 an ounce. Gold finally breached the $655 resistance half an hour minutes before the close. Despite the fact that for the past couple of days gold was range bounded without any clear direction, market participants seem to be turning towards a more bullish sentiment.

Buying took silver prices up during the electronic trading. Then spot was sold down to $13.12 during the Tocom AM session and after a slight rebound prices plunged again in the afternoon. In Europe silver mirrored gold in its descent and tumbled to fix at $13.06, up 2 cents from the previous one. Less than one hour after the opening of the Comex division of the NY mercantile exchange, prices rallied and eventually reached the peak of$13.21 during the afternoon. Silver hovered above $13.20 the last hour and closed on the highs of the day. We believe that silver needs to break outof a range bounded by the 200-day moving average of $12.90 on the downside and 10-day moving average of $13.30 in order to get a clearer direction.

MKS Gold & Silver, Daily Report
By Moniah El Shikh

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