Gold

Gold steadied at $1,291.49 an ounce on Thursday, bouncing off a 4-1/2-month low hit earlier, as the U.S. dollar strengthened. The precious metal was kept in check on gains in the U.S. currency and a rise in U.S. 10-year Treasury yields to seven-year highs.

Higher yields increase the opportunity cost of holding non-yielding assets such as bullion, while concerns over political risk in North Korea and Italy offered limited lift. U.S stocks remained at high despite of the lingering impact of expectations over interest rate hike.

In short, gold is expected to fall further before the wave of the dollar’s rally comes to an end. A correction is likely after recent losses. But we maintain our trading strategy on short on highs.

Silver

Silver was up 0.6 percent at $16.44 per ounce on Thursday. It is expected to find resistance at the 50-day, 100-day and 200-day moving average at $16.52, $16.70 and $16.8 respectively. Our trading strategy is the same with that of gold. That is to short on highs.

 
Dealing Room, ICBC Beijing Branch
                       Qin Gang