Gold & Silver Daily Market Recap: November 21st, 2012

Spot gold drifted lower in light trade as the U.S markets geared up for the thanksgiving holiday. Spot gold touched an intraday high of $1730 on the heels of a weaker U.S green back.

Spot gold has remained relatively range bound between $1705 and $1740 as traders squared position on the short work week.

U.S data remained mixed as it was still feeling the effects of hurricane Sandy. Initial claims number printed 410,000, down sharply from a revised 451,000 the previous week, while the flash manufacturing PMI rose to 52.4 from 51.0. But the revised UoM consumer sentiment came in at 82.7, which was sharply lower than the preliminary reading of 84.9. 

The middle east continues to be a point of concern as US secretary of state Hillary Rodham Clinton has travelled there an effort to broker a truce between fighting Israelis and Palestinians in Gaza. The truce now in effect as Israel and Hamas have agreed to a ceasefire, due to take effect from 7pm GMT. The growing conflict has pushed investors towards the yellow metal.

Central Banks continue to be buyers as Brazil, Kazakhstan and Russia added to gold reserves last month according to data on the International Monetary Fund’s website. Brazil added 17.2 tons to bullion reserves last month, Kazakhstan expanded them by 7.5 tons and Russia bought 0.4 ton, IMF data show.

The focus next week will be on the fiscal cliff issue as congress has until December 14th to come to a resolution before they break for Christmas. US Federal Reserve Chairman Ben Bernanke stepped up his warnings on Tuesday over the looming “fiscal cliff,” saying its mandatory tax hikes and spending cuts posed a “substantial threat” to US economic recovery.

Spot silver has enjoyed some minor success to the upside trading close to resistance at $33.30. The dual role metal will probably take most of its cues from big picture macro economic developments and not from minor changes in silver supply and demand fundamentals. The metal has found support sub $33.00 and remains a buy as long as it holds above $31.50. the gold silver ratio broke lower to 51.78, although it too remains in its well defined range. A break of 51.20 should give it a clearer picture.

 November 21st Closing Prices