(OroyFinanzas.com) – Gold was little active in the Far East due to Hong Kong National holiday. Tocom opened at $657 and after the peak of $657.80 was reached selling took the market lower. During the early European hours the metal was rather solid with the dollar little changed against the euro and Brent acting as a support.

Iran said it will not rule out using oil as a weapon if the United States resorts to military action against the Islamic Republic over its nuclear programme. However spot soon began to lose groundas a slight rise in the dollar prompted light selling. Indeed, firmer dollar makes gold costlier for holders of other currencies and lowers bullion demand. The dollar gained on the euro after an unexpected decline in a German business confidence indicator. A drop in Germany’s June ZEW economic sentiment index sent the euro to session lows against the dollar. As for Brent, prices slipped below $72 a barrel after hitting a 10-month high the previous session, but losses were limited by a strike call in Nigeria that could hobble output in the world’s eight biggest crude oil exporter. Consequently spot eased to fix at $655.10 on the first London fix, down $2.9 from the previous AM one.

After a short rebound gold plunged back during the Comex division of the New York mercantile exchange. We extended the overnight low to $653.70 a couple of minutes before the release of the US May housing starts. The data showed that the pace of US home construction fell 2.1 percent in May to a lower rate than analysts had expected for the lifeless housing market while building permit activity, a signal of future building plans, increased more than anticipated. Housing starts set an annual pace of 1.474 million units in May compared with a1.506 million units pace in April. Analysts had forecast May housing starts to drop to a 1.480 million unit pace from the 1.528 million rate originally reported for April last month. Subsequently prices edged higher to fix at $656.30 on the second London fix. By the late afternoon gold bounced up to the $660 levels. Subsequently stop and follow-through buying took the precious metal up to $661.40 and it settled on the highs. We believe that the 10-day moving average of $655 continues to provide a support while the100-day moving average of $665 a first resistance.

Silver spent a quiet Asian session, hovering between $13.22 and13.25 most of the time and settled on the lows of the day. Selling persisted in Europe, leading the metal to fix at $13.19 an ounce, down 22 cents from the previous one. Copper drifted lower as the previous day’s highs prompted some investors to take profits. However it remains supported by supply concerns as strike threats in North and South America and lower inventories underpin prices. During the Comex hours silver mirrored gold inits movements and dropped sharply before the data came out to then reboundon short covering. Prices jumped to trade above $13.30 one hour before the end of the Comex session and closed on the upper side of the intraday range. 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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