Gold

Gold fell to a near six-month low on Wednesday as the U.S. dollar index touched its highest since July 2017 against a basket of currencies after U.S. President Donald Trump threatened to impose a 10 percent tariff on $200 billion of Chinese goods and Beijing said it would retaliate. The trade spat reinforced concerns about global growth and triggered a selloff in equities, while boosting safe-haven currencies such as the yen and the dollar.

Typically, gold is used by investors as a place to park assets during times of global uncertainty. But the dollar's inverse relationship with bullion - a stronger greenback makes dollar-denominated assets more expensive for holders of other currencies - can often override other factors. In these environments, the Treasuries and dollars would tend to be safe havens, pressuring gold. Gold were trading around $1,275 an ounce, having touched its lowest since Dec. 22 at $1,270.

On chart, gold is testing the strength of previous support. But the downward tendency seems to remain intact. The loss of the support could pull bullion to as low as $1,240. But a technical correction is still likely in the near term.

Silver

Silver slipped for the third consecutive week on Tuesday. It dropped 0.5 percent at $16.32 an ounce, after hitting its lowest since May 16 at $16.21, only inches away from $16.20, a key support that holds well since February. But if gold suffers no sharp losses, the white metal is likely to find strong support at that level.

 
Dealing Room, ICBC Beijing Branch
                       Li Nan