(OroyFinanzas.com) – The market remained very thin overnight. Japanese were on the sellside on the opening of Tocom, but gold managed to hold above the $640support level and settled in this area. During the early European hours buying interest dragged prices higher and we fixed at $642.85 an ounce, down $6.7 from the previous AM one.

The precious metal dropped back to the $641 levels and remained sidelined untilthe opening of the Comex division of the New York mercantile exchange. This afternoon session was marked by a high degree of risk aversion with market participants reluctant to push prices much higher. US data came out,showing that new orders for long-lasting US-made manufactured goods tumbled a larger-than-expected 2.8 percent in May on a plunge in civilian aircraftorders. Analysts were expecting orders to slip 1 percent. The drop indurable goods orders was the first decline since January and followed a 1.1percent rise in April. Following the release of these figures gold priceseased then bounced back to the $642 levels. Brent was not able to help themetal, slipping below $70 a barrel ahead of US fuel data expected to showcrude stocks at a nine-year high and rising gasoline inventories in the world’s top consumer the United States.

After the second London fix of$642.10 the weekly Energy Information Administration (EIA) report released.US crude oil inventories rose 1.6 million barrels to 350.9 million barrelsin the week ended June 22, topping expectations for a 1.2 million barrelincrease. Meanwhile, gasoline stockpiles fell 700,000 barrels, defyingexpectations of a 1.2 million barrel build. Gasoline inventories movedlower as demand rose. EIA said that US gasoline demand over the past four weeks was 9.54 million barrels per day, up 1.4 percent from a year ago. As for distillates stocks, they showed an unexpectedly large drop, falling 2.3million barrels to 120.4 million barrels versus a forecast rise of 500,000barrels. And finally, US refineries increased the rate at which they runcrude oil by 408,000 bpd to 15.43 million barrels while refinery utilization rose 1.8 percent to 89.4 percent, above analyst’s expectations.The data release propelled Brent up and as a result gold prices did a briefattempt on the upside to trade at the $644 levels where profit taking emerged again. We believe that physical buyers and renewed demand shouldcontinue to provide some support in the near term. Gold needs toconsolidate before being able to acquire enough momentum to break above$647-$650.

Physical demand on Tocom enabled silver to reach the high of $12.30in the Asian morning session. However after the 60 cents drop of yesterdaythe metal had difficulty recovering. Indeed, offers around $12.30 level capped the market and triggered a fall down to the $12.15 levels. In Europe silver revisited the overnight low before bouncing up to fix at $12.26,down 59 cents from the previous day. During the afternoon session we sawsome ups and down with silver bounded by $12.18 on the downside and $12.40on the upside. We believe that the market is likely to remain volatile. Forthe moment the major support lies at $12.10 while $12.50 provides apsychological resistance.

MKS Gold & Silver, Daily Report
By Moniah El Shikh

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