(OroyFinanzas.com) – Tocom liquidation took gold slightly lower overnight, but largebid emerged in the afternoon and enabled the metal to close on a firmernote. In Europe prices remained stagnant for the entire morning session,which contrasted with the amazing afternoon session that we had.
Gold kept rallying, boosted by a weaker dollar that hovered near a record low againstthe euro on lingering worries about the US housing market. Indeed, the UScurrency limped after Federal Reserve Chairman Bernanke said on Thursdaythat losses on subprime loans could hit $100 billion and threaten consumerspending. Thus, as soon as the Comex division of the New York mercantileexchange opened, prices came under upward pressure and were propelled up tothe $679 levels. Subsequently gold breached the $680 and then fixed at$681.60 on the second London fix.
The other metals were following the sameuptrend, with platinum hitting a two-month high, silver rising to itshighest in six weeks and palladium increasing to a two-week high. Theyellow metal was also supported by Brent crude, which steadied near $78 abarrel on supply concerns, with supply outage in OPEC member Angola, a fallin US gasoline inventories and accelerating economic growth in China. Latergold eventually reached the peak of $682.45, but did not stop there asfollow-through buying took it higher. By the late afternoon the marketseemed to have stabilized above the $683 level for a while, but it wasshort lived as we rallied up to the $686 levels. We believe that gold islikely to remain driven by the dollar. Further weakness in the currencymight lift gold to new highs, while profit taking are still limiting theupside. We think it is important for gold to consolidate its intraday gainsbefore heading further north.
Silver was less active. Spot gained some ground during the electronictrading overnight, and opened on Tocom at $13.26. The market was well bidthroughout the day but got capped around $13.30 an ounce. During our timezone silver breached the $13.30 old resistance and rallied up to $13.38 inthe afternoon. But then it got stuck within a 7 cents range and remainedstagnant until the close of NY. We believe that silver will remain rangebounded unless the resistance around $13.40-$13.50 levels is breached.
MKS Gold & Silver, Daily Report
By Moniah El Shikhty