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Gold firmed after New York close Friday, but failed to break above $659 in Asia – MKS

(OroyFinanzas.com) – Gold firmed after New York close Friday, but failed to break above $659 in Asia as offers around that level capped the upside. The metal remained firm the whole day, finding some support around the $656 level. In Europe spot quickly revisited the overnight high, underpinned by a drop in the dollar against the euro.

Gains in Brent and equity markets also helped to push prices higher. Spot eased to fix at $658 on the first London fixing, but began to recover prior to the opening of the Comex division ofthe New York mercantile exchange. No major economic data was scheduled for today.

Brent prices steadied around $72 a barrel as gunmen overran an oilfield station in Nigeria on Sunday and Italian Oil Company Eni said 27 people were being held hostage at the facility, which normally produces about 40,000 barrels per day of oil. Moreover Nigerian unions the Nigeria Labour Congress (NLC) and Trade Union Congress will start an indefinite general strike to protest against rising prices and privatizations. Despite this supportive factor gold was unable to breach the $660 key resistance. After a while, spot began to gradually lose ground, following a rise in US stocks and news Iran would study a request from Baghdad for another round of talks between US and Iranian officials, which could ease tensions in the Middle East. We fixed subsequently at $656 an ounce on the second London fix, up $2.9 from the previous one. The rest of the afternoon session was rather choppy, with prices fluctuating on the bottom side of the intraday range, dropping eventually down to $654.80. We believe that gold would have to break the resistance levels of $658-$660 to be able to head higher, while the 10-day moving average of $655 provides a support. This week market participants will be looking at Housing starts which should provide direction for currencies tomorrow and at Initial jobless claims, leading indicators and Philly Fed survey on Friday.

Silver gained ground after New York close Friday, opening in the Far East around the $13.30 level. Selling took the metal down to $13.26 in the AM, but short covering enabled it to regain the $13.30 level by the end of the afternoon. During the early European hours silver followed gold movements and hit the peak of $13.32 an ounce and then fixed slightly lower. The white metal was helped by copper, which rose to a 4-1/2-weekhigh on supply concerns and a general rise in commodity prices, while concerns over a potential strike in Peru continues to provide additional support. However silver could not hold on to the gains and plunged during the Comex hours to test the downside. The metal remained weak until theclose. We believe that in the short term silver will remain bounded by the$13.00-13.40 range.

MKS Gold & Silver, Daily Report
By Moniah El Shikh

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