Gold

Gold rose 46 cents into the positive territory, ending Wednesday roughly flat. It almost pared all gains late in the session after rallying 0.7 percent. On the hourly chart, the market was dominated by the dollar that weakened ahead of the Federal Reserve’s policy meeting, but reversed the course after its policy statement.

It is reasonable for the dollar to drop sharply before Fed’s policy statement due to recent gains as well as strong appetite for profit-taking, as it was under key resistance without seeing a macro turning point. However, the big rally after the statement came out of expectations, which has something to do with its statement on inflation. We believe that this part of gains will be pared soon.

The dollar index will be determined by the Wall Street, that will not turn sour in real sense unless U.S. stocks stabilize. Gold bulls can find two tailwinds within the day. First, the dollar would pull back in the near term. But most gains out of it are expected to lose ahead of the morning bell of the Wall Street, while $1,300 will be tested afterwards. Second, Wall Street opens steadily. The gains could be considerable if U.S. stock futures firm before the morning bell. But the chance is slim.

Silver

Silver was up 1.34 percent at $16.35 an ounce. It retained most gains after soaring 2.43 percent, sharply outperforming bullion. Other precious metals of commodity attribute also outperformed gold, a tailwind for the capital market, suggesting an economy under normal conditions. We maintain our view that silver is expected to see remarkable rebound in the coming sessions.

 
Dealing Room, ICBC Beijing Branch
                       Zhao Yifei