(OroyFinanzas.com) – There was no interest in the market overnight and prices hovered within adollar range during the entire session. In Europe gold struggled to hold the $675 and selling interest forced the metal down to the $670 support.
After the opening of the Comex division of the New York mercantileexchange US data came out. The report showed that the number of new claimsfilled for US jobless benefits fell unexpectedly in the latest week,dropping 2,000 to the lowest in more than two months. The Labor Departmentadded that initial jobless claims for state unemployment benefits fell forthe third week, dropping to 301,000 for the week ended July 21 from anupwardly revised 303,000 the prior week. Another report stated that neworders for long-lasting US made manufactured goods rose 1.4 percent in Juneon a big rise in orders for nondefense aircraft. Economists were expectingdurable goods orders to increase by a somewhat bigger 1.8 percent.
CommerceDepartment added moreover that excluding volatile transportation orders,new orders for items unexpectedly fell 0.5 percent, while analyst hadforecasted a 0.5 percent rise. Subsequently we broke below $670 and touchedthe low of $667.20. At the same time Brent climbed towards $77 a barrel on increasing demand from refiners in the world’s top consumer, but was notable to help the yellow metal. Then prices seemed to have stabilized around$668 an ounce for a while. Later in the day another set of US reports wasreleased. Sales of new US homes fell 6.6 percent in June to alower-than-expected level and prices slumped from May. New single-familyhome sales fell to an annual rate of 834,000 from a revised rate of 893,000in May.
Thus the report highlighted the ongoing weakness in the housingsector. Subsequently the metal regained the $670 level, but that was shortlived. Indeed, the market collapsed. Follow-through selling dragged pricesalmost $10 lower in less than half an hour, as a wave of risk aversion andstops hit financial markets. After a slight recovery, we closed the day ona very weak note. Yesterday we were wondering if the correction would stopat $670. That was not the case as around 2 millions of ounces were soldtoday and gold lost $20 in 48 hours. We believe that the market needs someconsolidation. If we break below $660 we could revisit the $640 levels.Direction in the coming session will partially depend on the dollar withtomorrow’s GDP reading.
Silver gained some ground following the close of NY the previous day. Bidsenabled the market to stay above $13.10 in Asia. In Europe prices weresidelined until the opening of New York where prices began to tumble. Wetumbled below $13.00 and following gold’s collapse silver dropped down to$12.72. We believe that the metal might be vulnerable to further correctionif gold continues to loose ground.
MKS Gold & Silver, Daily Report
By Moniah El Shikh