Gold climbed $1.5 higher during the electronic trading last night – MKS

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( – Gold climbed $1.5 higher during the electronic trading last night,opening in the Far East at $666. But soon traders liquidated their longs,forcing prices down to $665.60 per ounce where Tocom closed.

In Europe itwas a battle to hold above the $665 dollar mark. Then after the firstLondon fix of $666.75 and on the back of a weakening US dollar, pricesstarted to gain ground. The ascent continued until the release of two USreports during the Comex division of the New York mercantile exchange. CoreUS consumer prices rose a less-than-expected 0.1 percent in June,relatively in line with analysts expectations of a 0.2 percent gain. Thegovernment said that in seasonally adjusted data, personal income rose 0.4percent, while personal spending rose a less-than-forecast 0.1 percent, theweakest showing since a drop in spending in September of last year.Economists had forecast personal income to gain 0.5 percent and personalspending to rise 0.2 percent.

Moreover, US employment costs rose slightlyfaster during the second quarter. The Labor department cost index, a broadgauge of what employers pay in wages, salaries and benefits, rose 0.9percent during the April-June second quarter. That was in line withanalysts’ forecasts and ahead of the first quarter’s 0.8 percent increase.Wages and salaries rose 0.8 percent during the second quarter, down fromthe 1.1 percent gain posted during the first quarter. Subsequently goldtumbled down to the $666 levels and remained there until the second fixingwhere another set of US reports came out. Indeed, US construction spendingfell surprisingly by 0.3 percent in June, as gains in commercial buildingfailed to offset declines in homebuilding, which fell to its lowest pace inmore than three years.

The commerce department said that the drop to aseasonally adjusted annual rate of $1.18 trillion was the first decline inoverall construction spending since January. Analysts were expecting a 0.2percent gain in construction spending. Another report showed that USconsumer confidence rose to 112.6 in July, which is a nearly six-year high,on improvements in business conditions and the job market. The reading waswell above expectations, as the median forecast was for 105.0.

However goldmarket did not strongly react and simply continued to slip before bouncingback to settle in the $666 area. The market appears to be stabilizing andgold is showing signs of a recovery after last week anxiety. We believehowever that gold is likely to remain limited by $670 on the upside and by$660 on the downside in the near term.

Silver was fairly quiet in Asia, but prices began to rise in Europeand fixed at $12.93. The $13 psychological level was breached during theComex hours, however in the absence of any follow through buying the pricescould not hold on to the gains and followed gold in its descent. Silverspent the entire afternoon session trading slightly below the $13 dollarmark. We believe that the 30-day moving average of $12.70 tends to providea support, while the $13 psychological level still acts as a resistance.

MKS Gold & Silver, Daily Report
By Moniah El Shikh


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Marion Mueller

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