Gold closed down 0.27 percent at $1,243.81 an ounce, but held above the 200-day moving average. Chicago Federal Reserve Bank President Charles Evans who is a voter this year on the central bank's rate-setting committee, said on Tuesday he is increasingly concerned about inflation after two rates hikes this year. He said it may be worthwhile for the Fed to wait until year-end to decide on another rate hike.
Investors, however, doubted that the central bank will raise rates again in September  after the Federal Reserve raised interest rates in June and said it would begin cutting its holdings of bonds and other securities this year. Market expectations for a hike in September and December are just 13 percent and less than 50 percent, according to the CME Group's FedWatch tool.
Investors will continue to focus on U.S. economic data, but shall keep an eye on market risks after the S&P 500 bounced off highs to close at 2,437.03.
On technical front, gold was supported at the 61.8 percent retracement level and the 200-day moving average, and is expected to consolidate at the level without big events. Market bulls shall wait for more signs of stabilization.
Silver tracked gold, turning down 0.55 percent to $16.4692 on Tuesday. The RSI index that located near oversold range pointed to some rebounding demand in the near term. On trading strategy, investors may follow gold.

 
Dealing Room, ICBC Beijing Branch
Qin Gang

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