Gold prices bounced off a seven-week low on Monday as safe haven demand ebbed away following pro-EU candidate Emmanuel Macron's victory in the French presidential election. The removal of the political risk leaves investors refocusing on the pace of monetary policy normalization in Europe and the United States. The European Central Bank is expected to have more room to tighten policy as the euro zone's economic recovery gathers pace. In the United States, data out on Friday showed the unemployment rate dropped to near a 10-year low, which is seen as reinforcing the case for a U.S. interest rate hike next month. While money managers cut their net-long position in COMEX gold for the first time in seven weeks in the week to May 2, U.S. government data showed late Friday. Spot gold steadied after touching 1,224.86 an ounce, its lowest since March 17 and just above the 100-day moving average.
On technical front, gold steadied after holding above the 100-day moving average. The precious metal fell 3.2 percent last week, its biggest percentage fall since November, gathering pace for upward momentum. But it is expected to remain weak in near term as it bounced off highs for two days in a row, suggesting hefty resistance.
Silver snapped its losing streak in the last trading session of last week. But spot silver dipped 0.1 percent to $16.28 an ounce as safe haven demand ebbed away following pro-EU candidate Emmanuel Macron's victory in the French presidential election. While money managers cut their net-long position in COMEX silver by 25,602 lots to the lowest since January, data showed. Investors shall be cautious and keep away of blind bargain hunting amid hefty bearish sentiment.

 
Dealing Room, ICBC Beijing Branch
Huang Han

Note: The information herein is provided for informational purpose only. You are liable for the risk incurred to the investments based on this information provided herein.