Gold

Gold prices dropped, remaining near a six-month low on Wednesday as the U.S. dollar hovered around 11 month peaks but was offset by festering global trade tensions. Rising U.S. interest rates also pressured bullion. Spot gold lost 0.2 percent at $1,272.44. U.S. gold futures for August delivery settled down $4.10, or 0.3 percent, at $1,274.50 per ounce.

Trade tensions between the United States and China are showing no signs of easing. On Tuesday, a White House trade adviser said Beijing had underestimated the U.S. president's resolve to impose more tariffs. That followed Washington threatening to impose tariffs on $200 billion of Chinese goods and Beijing saying it was raising tariffs on $50 billion of U.S. goods. Higher U.S. interest rates after the Federal Reserve’s policy meeting in June also make gold a less attractive investment.

On chart, gold fell for the second consecutive session, crossing below the support of $1,277 and moving closer to $1,260. The yellow metal is still likely to fall further. But a technical correction is still likely in the near term.

Silver

Silver outperformed gold to close at $16.31 an ounce. We maintain our view that the white metal is likely to find strong support at $16.20, if gold suffers no sharp losses.

 
Dealing Room, ICBC Beijing Branch
                       Li Nan