Gold prices rose 1 percent to a 3-1/2-month high on Thursday after minutes from the latest Federal Reserve policy meeting further dampened expectations for an interest rate hike in March, lowering U.S. bond yields and pressuring the dollar. U.S. gold futures for April delivery settled up 1.5 percent at $1,251.40. Gold investors should be paying close attention to upcoming european elections, as political risks would drive the metal well above current level on any signs of split in euro zone. Marine Le Pen, leader of the French National Front party, has said she will put together a referendum for France to exit the European Union if elected. However, more details on promised government spending, infrastructure investment or tax cuts would likely push the dollar and U.S. asset prices higher and gold lower.
On technical front, gold rose and is likely to hit the 200-day moving average of $1,260. In case of a successful breakthrough, the yellow metal would pick up further.
Silver tracked gold, maintaining its upward movement although at a slower pace than the latter. Technically, the momentum column of the MACD failed to blow up, suggesting divergence between the two metals if silver could not follow gold’s strength. The white metal had advanced over 10 percent since late December last year. A downturn triggered by profit-taking shall be watched.

 
Dealing Room, ICBC Beijing Branch
Cheng Yu

                                  
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