The market remained thin overnight with gold trading within a $1 range – MKS

(OroyFinanzas.com) – The market remained thin overnight with gold trading within a $1 range until the close of Tocom. During the early European hours prices climbed to fix at $667.50 on the first London fix, up $4.5 from the previous AM one.

The metal was boosted by a slump in the dollar and firmerBrent amid signs that North Sea oil and gas production could be hampered for weeks. Gold market became nervous after the opening of the Comex division of the New York mercantile exchange and dropped down to the $665levels. Then the release of two US reports dragged prices higher. Indeed,sales at US retailers surprisingly dropped 0.9 percent in June, the biggestdecline in almost two years, as car and gasoline sales fell. The CommerceDepartment said excluding cars, retail sales fell unexpectedly by 0.4percent. Analysts had forecast a 0.1 percent rise after a rise in May that was revised up to 1.5 percent.

At the same time US June import prices data came out, showing that import prices rose 0.1 percent for a fifth straight monthly increase led by higher petroleum costs. Labor Department added that imported petroleum prices climbed 4.7 percent in June, after an upwardly revised 3.7 percent rise in May. Economists were expecting to see a 0.7percent gain in import prices following an upwardly revised 1.1 percentincrease in May. Furthermore, export prices were up 0.3 percent in June, matching analysts’ expectations.

Following these figures the dollar dropped to a record low against the euro and gold bounced back to the $667 levels. We remained trading in this area until the second London fix of $666.50.Another set of US reports was then released, showing that inventories at US businesses rose by a bigger-than-expected 0.5 percent in May, the largest gain in 10 months, while financial markets were expecting a 0.3 percent rise. In addition US consumer sentiment climbed far more than expected in early July to its highest in six months. Indeed, the index rose to 92.4,well above June’s final reading of 85.3. By the late afternoon selling pressure pushed the precious metal down to $664.10, which was the low ofthe day. However once again emerged bids enabled gold to regain the $667 levels before easing slightly by the closing. We believe that gold is likely to remain well supported by Brent uptrend and dollar weakness and should remain limited by $660 on the downside, while $670 continues toprovide a strong resistance.

There was no interest at all in the Asian market last night with silver remaining immobile the entire Tocom session. In Europe the metal wasmore active and extended the overnight high to $13.14 by the fixing time.Prices tested the downside prior to the release of US data during the Comex hours, but that was short lived as they began to recover instantaneously. The grey metal held well the $13 support throughout the NY session and settled just above it. We believe that silver has to consolidate above the$13 support in order to head higher.

MKS Gold & Silver, Daily Report
By Moniah El Shikh

© OroyFinanzas.com

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