(OroyFinanzas.com) – Due to long liquidation gold lost $3 after the close of NY on Tuesday,opening in Asia on a weak note. Then the sharp drop in USD/JPY forcedprices down to the $660 support during the afternoon session and Tocomclosed on the lower side of the intraday range.
In Europe the metal testedonce again the $660 support. Subsequently the metal turned around and beganto rally prior to the opening of the Comex division of the New Yorkmercantile exchange. Then the manufacturing ISM report came out. USmanufacturing expanded more slowly in July. The Institute for supplymanagement said its index of national factory activity slipped to 53.8 from56.0 whereas analysts had been looking for a more modest dip to 55.5.Moreover, the US dollar fell against major European currencies, hitting thelow of 1.3672 USD/EUR after a report released by ADP Employer Servicesshowed the US economy added just 48,000 private sectors jobs in July, wellbelow the median forecast.
Gold continued its ascent until the secondLondon fixing time, when other US data was awaited. A government reportshowed that pending sales of existing US homes unexpectedly rose in June,by the biggest monthly gain in more than three years, but sales were stilllower than a year ago. The index, based on contracts signed in June, was up5 percent to 102.4 from a downwardly revised index of 97.5 in May. Theresults were well above analysts expectations for a 0.6 percent drop.Despite US stocks were little changed following this surprising increase inpending home sales, gold drifted higher to reach the peak of $667 an ounceafter the release of the Energy Information Administration weekly report.US crude oil stocks fell by 6.5 million barrels last week as oil refineriessharply increased processing rates. Total US crude oil stocks dipped to344.5 million barrels from 351 million barrels a week earlier. The EIAadded that crude oil stocks were lower in every region of the country. Bythe end of the day the yellow metal eased on profit-taking and closedslightly below the $665 level. We see good support above $660 and expectthis level to hold in the near term. Gold is likely to remain choppy giventhe current nervousness in the market. We believe that a sustainable breachof the $665-667 level would accelerate the upward movement; otherwise rangetrading will prevail in the short term.
Silver fell by 0.7% from Tuesday’s closing price. Tocom largeliquidation as well as a weakening USD/YEN triggered a 10 cents drop inspot price by the late afternoon. In Europe the grey metal followed thesame pattern as gold. Selling pressure was still weighing upon pricesduring the morning, but prior to the opening of NY market spot changed thedirection and began to gain ground. It challenged the 13 resistance forthe second consecutive day without sustaining it. We believe that the30-day moving average of $12.70 tends to provide a support, while the $13psychological level still acts as a resistance.
MKS Gold & Silver, Daily Report
By Moniah El Shikh