(OroyFinanzas.com) – Gold remained hovering around Friday’s closing levels of $666-$667,with Tocom being closed for holiday. As a result, the Asian market was very quiet and small volume was traded. In Europe the very narrow range above$666 prevailed.
Gold held steady below a five-week high, with investors keeping an eye on the dollar, which hovered near a record low against the euro. Spot fixed at $667.25 on the first London fix, down only 25 cents from the previous AM one, helped by Brent prices. Indeed, Brent crude edged higher near $78 a barrel during the morning, driven towards an all-timehigh by an influx of speculative fund money and tightening crude suppliesfrom the North Sea. Seasonal maintenance on North Sea oilfields, coupled with unanticipated outages, has helped extend oil’s rally, lifting prices by more than $7 since late June. After the opening of the Comex division of the New York mercantile exchange the Fed survey came out.
The New YorkFederal Reserve Bank said its ‘Empire State’ manufacturing activity indexrose in July to 26.46 from 25.75 in June. Consequently prices drifted slightly lower, but then half an hour later the yellow metal dropped downto the $666 levels following a sharp decline in Brent prices. Subsequently we fixed on the second London fix at $666 an ounce and hovered around thatlevel until the close of New York. Globally there was no real interest inthe market today. Market participants were cautious ahead of the FederalReserve Chairman Ben Bernanke’s testimony to the US Congress on Wednesdayand Thursday that might influence the dollar. We believe that the $670level continues to provide a strong resistance, while $660 seems to remaina solid support. North Sea production problems and refinery outages as wellas dollar weakness are likely to continue to support prices.
This week the following US economic data will be awaited: Producer prices,industrial production and NAHB housing index on Tuesday, CPI, housingstarts and Bernanke semi-annual monetary policy testimony to house onWednesday to finally end the week with the release of initial joblessclaims, leading indicators, Philly fed survey and FOMC minutes on Thursday.
Silver mirrored gold for the whole day. There was also nothing toreport overnight as there was hardly any range. The same scenario prevailedin Europe with prices confined to a 10-cents range. During the Comex hoursprices came under selling pressure and dropped below the $13 recentsupport. Spot struggled to regain and sustain that psychological level, butsettled just below it. We believe that it is important for silver to beable to regain the $13 per ounce in order to head higher.
MKS Gold & Silver, Daily Report
By Moniah El Shikh
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