Gold prices eased after hitting $1,270.60. It closed the day at $1,262.34 per ounce. Worries over Greek debt and prospect of early elections in Italy dampened risk appetite, sending Asia market lower and boosting safe-haven asset such as Japanese yen and gold. But trading was thin due to a long holiday weekend. U.S. personal consumer spending and income rose as expected in April, but inflation failed to hit the Federal Reserve’s 2 percent target. The personal consumption expenditures (PCE) price rebounded 0.2 percent on an annual basis and 1.5 percent month-on-month. Market expected that the Federal Reserve would raise interest rates next month, capping gold’s further gains.
On technical front, gold meets resistance at $1,270. A pullback is quite possible without an effective breakthrough in the near term. Investors are recommended to sell gold on highs.
Silver tracked gold, closing in the negative territory. A cross in the daily chart suggests uncertainty at current level. The 50-day, 100-day and 200-day moving average almost overlapped, indicating heavy resistance from $17.4 to $17.5. Moreover, the upward momentum column shows signs of receding, suggesting a downtrend. Investors are recommended to short silver at highs.

 
Dealing Room, ICBC Beijing Branch
Qin Gang

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