(OroyFinanzas.com) – Gold firmed during the electronic trading and was bid through out the Tocom session on continued short covering. Prices tested once the downside,but that was short lived. The precious metal soon extended the overnighthigh in Europe, fixing at $645.70 on the first London fix.

The first set ofUS economic data came out half an hour after the opening of the Comexdivision of the New York mercantile exchange. US Commerce Department reportshowed that US economy grew at a lower-than-expected 0.7 percent annualpace in the first three months of this year. It was the weakest quarterly expansion in more than four years as businesses sold off inventories. Inaddition, the report showed that personal consumption spending that fuelstwo-thirds of national economic activity rose at a 4.2 percent rate,slightly lower than the 4.4 percent rate estimated a month ago. Anotherdata showed that initial claims for US jobless aid fell to 313,000 last week, slightly lower than forecast. Indeed, analysts were expecting claimsto slip to 318,000 in the week ending June 23 from the previous week.

The report was thus encouraging for economic activity. Following theses figures gold prices dipped briefly. Afterwards spot bounce back to the $646levels and remained bounded by a narrow range for a while. By the lateafternoon a private research group showed that the number of help-wantedads in US newspapers fell further than expected in May from April to alevel last recorded in August 1958. The gauge slipped to 27 in May from 29 in April while economists were expecting the figures to remain unchanged.The conference board added that help wanted ads fell in six of the survey’snine US regions in the last three months, with the largest decrease in the East South central region.

Moreover, online jobs ads rose 0.2 percent inMay from April to 4.374 million. Subsequently the metal continued to climb,helped by higher Brent prices. Despite this support the $650 was fruitlessly challenged due to profit taking at this level. The yellow metal finally settled on the highs. We believe that in the short term further upside is possible if gold manages to get back above and stabilize beyond$650. As for the downside the first support continues to be provided by the$640 per ounce.

Silver looked firm in the Far East, opening above $12.30 on Tocom.Bids soon took the metal higher, but spot eased in the late morning session. However the afternoon session absorbed Tocom selling and prices were able to close on the upside of the intraday range. In Europe and during the Comex trading hours the metal moved gradually higher, but faced some resistance around the $12.50 levels. Strikes in Chile’s Collahuasi copper mine, one of the world’s largest producers of copper, supported copper prices which in turn helped silver to hold on to the gains. Webelieve that firmer base metals should continue to provide a support, butin order for silver to get on a clear upper trend the metal has to breakand consolidate above the $12.50.

MKS Gold & Silver, Daily Report
By Moniah El Shikh

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