Gold prices fell on Wednesday after the U.S. Federal Reserve left interest rates unchanged but signaled it still expected to raise interest rates by year-end. In line with expectations the Fed said it would begin in October to cut its balance sheet, but surprised some investors to keep its resolutions.
When asked on what conditions would the Fed turns to easing again, Fed Chair Janet Yellen said the bar to change course on the planned wind-down of the Fed’s balance sheet is high, and no such information can be disclosed.
After the statement, the dollar rose, while gold pulled back below the key mark of $1,300, hitting 1,295.81 an ounce, the lowest since August 28. Bullion closed down 1 percent to 1,298.1 an ounce.
Investors are more confident that the central bank would kept tightening its balance sheet, including cutting up to $30 billion in U.S. Treasury bonds and $20 billion in mortgage-backed securities holdings each month. Yellen promised that the aforementioned schedule will not be changed.
On technical front, gold closed below the key mark of $1,300, with a relatively bearish outlook. The support could be found at the 50-day moving average at $1,288, and the 100-day moving average of 1,267 that converges with the long-term downward path. Gold is expected to hit bottom within the aforementioned range.
Spot silver was down 1.66 percent at $17.033 an ounce on Wednesday. The white metal closed at around the 200-day moving average at $17.10 in the previous session, after crossing below the 200-day moving average and the 50-day moving average successively. We hold a bearish view on silver and believe it is more likely to lose the ground of $17.

 
Dealing Room, ICBC Beijing Branch
Lv Yan

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