Gold

Spot gold was down 0.1 percent at $1,277.80 an ounce on Thursday, trading in a tighter range compared with the previous two sessions. The U.S. House of Representatives approved a broad package of tax cuts sought by senior lawmakers and President Donald Trump. The House vote shifted the tax debate to the U.S. Senate. Investors were not surprised by the result, reflected by quietness in precious metals and forex market. But equity investors were more aggressive.

The House bill would reduce the corporate tax rate to 20 percent from 35 percent, a core part that was agreed by both the U.S. House of Representatives and the Senate in the draft plan, suggesting it’s quite certain that the bill will be passed after some discussion and modifications.
Gold was little changed on Thursday, consolidating within range. We maintain our view and trading strategy: 1) current prices provide a good entry point for long-term investment; 2) bull market is not expected before all expectations for the next month are priced in; 3) we did not see reasons to short gold in the medium and long term despite of the possibility of dipping down.

Silver

Silver was up 7 cents, recouping the 6-cent losses recorded in the past two sessions. We need to start considering the direction for breakthrough in the next week, although we believe it’s unlikely this week. In view of its performance in the past one month, we believe the white metal is more likely to move up. Investors can wait for detailed trading strategy after key breakthrough is made.

 
Dealing Room, ICBC Beijing Branch
                       Zhao Yifei

                                  
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