(OroyFinanzas.com) – Japanese market players had hardly any interest in the gold market overnight and prices remained hovering on both sides of the $650 level. Gold started to slip when London opened this morning and extended the Asian low to$646.50 after the first London fix of $647.75.
Paradoxically, Brent crude surged to an 11-month high above $75 a barrel. Because of production disruptions in Nigeria and output cuts by OPEC concerns over global supplies raised, while refiners demand in top consumer the United States is picking up. Prior to the opening of the Comex session of the NY Mercantile exchange the metal turned around and tried to regain the $650. Market participants were waiting for the jobs data. US June job growth report came out and showed that US employers added a stronger than expected 132,000 new jobs in June and payrolls rose more strongly than previously thought inApril and May. Labor Department said June hiring figure topped economists’ forecasts for 120,000 new jobs. The government added that some 75,000 more jobs than it previously estimated were created in April and May, a surprisingly solid pace of hiring. All the hiring came in service industries during June. There were 135,000 new jobs in the service secto rincluding health services, hospitality businesses and government. Regarding the unemployment rate, it remained steady at a relatively low 4.5 percent.
Theses figures underlining a strengthening job market eased concerns that the Federal Reserve may cut interest rates this year. Following the bullish data for the dollar gold came under strong selling pressure and plunged down to the low of $645.70. Emerged short covering took us higher and we remained trading around the $648 levels until the second London fix of$648.75. By the mid afternoon we breached again the $650 and subsequently follow-through buying took the metal up to the $654 levels. Gold spent the last two hours of trade hovering on the upper side of the intraday range. We believe that it is important for the metal to sustain the $650 dollarmark and if not, we might see further correction on the downside.
Silver tried to hold the $12.50 level in the Far East and managed to close just above it. In Europe the white metal dropped over 15 cents lower to fix at $12.40 an ounce, down 20 cents from the previous one. During the Comex hours prices first followed gold in its downside and then firmed to hit the peak of $12.75 at the end of the day. We believe that silver would have to consolidate above the 15-day moving average of $12.70 in order to head further North.
MKS Gold & Silver, Daily Report
By Moniah El Shikh
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