Gold edged up $1.2 to $1,293 an ounce on Thursday, failing to cross over the key resistance of $1,295 and $1,300.
Market was quiet, dominated by technical trading. Market moved in line with our views, saying “profit-taking bids in the near and medium term are expected to stay in the way for making breakthrough.” Technical elements were little changed. In addition, profit-taking and stop-loss usually strengthen ahead of weekend and public holidays. Under such circumstances, bullion is unlikely to trade around resistance level. Market will be dominated by successful breakthrough or sharp pullback, while consolidation is unlikely.
On trading strategy, we maintain our view that “for non-long-term positions, investors are not recommended to take risks by holding their positions. Market bulls are also not recommended to build positions at current level.”
Spot silver inched up 4 cents to $17.17 an ounce on Thursday. Our view that “silver will be dragged down by bullion” was in line with Thursday’s moves. Silver has regained the ground of $17 after holding above the level for two straight days, but is still likely to pull back as gold has not yet make successful breakthrough.

 
Dealing Room, ICBC Beijing Branch
Zhao Yifei

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