(OroyFinanzas.com) – Gold was bid throughout the Tocom session and ended the day 2 dollars higher. The precious metal continued to climb during our time zone and hit the high of $668.80 before easing to fix at 667.75 on the first London fix.

After the opening of the Comex division of the New York mercantile exchangetwo US reports came out. Labor Department report said that US consumerprices rose by a slightly bigger-than-expected 0.2 percent in June on higher food costs and they were up by the same amount after stripping outvolatile food and energy prices. Last month’s gain in the consumer priceindex was slightly larger than the 0.1 percent advance economists wereexpecting to see after a fall-off in energy prices. The other report showedthat the pace of US home construction rose 2.3 percent in June but buildingpermit activity, a sign of future construction plans, sank to its lowestrate in 10 years, signaling further weakness in the housing market. TheCommerce Department said indeed that housing starts set an annual rate of1.467 million units in June compared with a revised 1.434 million unit pacein May. Economists had forecast June housing starts to drop to a 1.45million units pace. Building permits fell 7.5 percent in June to a pace of1.406 million units. The US dollar inched up after the release of thesefigures, pushing gold down to the $665 levels. Later in the afternoon theEnergy Information Administration weekly report came out.

US inventories of crude oil and refined products fell last week as an increase in refineryutilization failed to offset a drop in products imports. US gasoline stocksdropped 2.3 million barrels to 203.3 million barrels as imports plunged508,000 barrels per day to 915,000 bpd. Crude oil stocks dropped 500,000barrels to 352.1 million barrels as refinery utilization climbed by 0.8percentage point to 91 percent of capacity from 90.2 percent a weekearlier. As a result Brent rallied up to $76.84 a barrel, while the USdollar was touching another record low against the euro. Consequently goldchallenged the upside and broke above $670. Subsequently stops were hit,bringing us to the high of $674. The metal failed however to breach the$674-$675 due to profit taking at these levels. Gold spent the last coupleof hours hovering around the $673 levels and closed on a firm note.Federal Reserve Chairman Ben Bernanke said today that the US economy willgrow gradually this year and gain steam in 2008, but warned about inflationrisks. ‘Overall, the US economy appears likely to expand at a moderate paceover the second half of 2007, with growth then strengthening a bit in 2008to a rate close to the economy’s underlying trend’ he said in the semiannual testimony prepared for delivery to the House of RepresentativesFinancial Services Committee. If gold is able to sustain the gains andconsolidate above $670 further upside is possible.

In Asia silver was well bid throughout the Tocom session, opening at$12.90 levels and closing slightly higher. In Europe the white metalfollowed gold in its downside, but recovered during the Comex hours on theback of a weaker US dollar. Silver jumped 20 cents higher by the lateafternoon to trade at the $13.20 levels and settled on the upper side ofthe intraday range. We believe that silver needs to undergo a period ofconsolidation before the necessary momentum to head higher could beacquired

MKS Gold & Silver, Daily Report
By Moniah El Shikh

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