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Gold Tumbles as Dollar Soars on Strong U.S. Data
 

Gold

Gold prices fell 1 percent on Thursday and broke below their recent trading range around $1,190-$1,210 an ounce after the U.S. dollar surged. The dollar index rose 0.7 percent to 94.875. As more interpretation came out for the Federal Reserve’s policy meeting, Fed Chair Jerome Powell send a new signal to the financial market that it’s employment, payroll and inflation shall be focused on, instead of the central bank’s tone or estimates.

The latest data said the Federal Reserve planned four more increases by the end of 2019 and another in 2020. The data confirms that the U.S. economy is not about to fall off a cliff amid hardening trade disputes, and that adds credence to the point that interest rates have to go higher, sparing more policy room for future economic crisis. U.S. rate rises tend to boost the dollar and hurt gold prices.

On chart, gold turned negative before hitting the 50-day moving average, suggesting extending consolidation. Investors shall follow the trend, awaiting prices toughing $1,170.

Silver

Silver fell 0.2 percent to $14.26, showing resilience compared with bullion and reversing previous course featured by sharper decline amid gold’s downside trend. In the near term, the white metal’s support remained intact. We maintain our view that stop-loss shall be set even the risk for bulls is limited.

 

Dealing Room, ICBC Beijing Branch
                       Cheng Yu


(2018-09-28)
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