Gold dropped to an eight-week low on Tuesday as safe-haven demand continued to fade in the wake of Emmanuel Macron's victory in the French election and as expectations for tighter U.S. monetary policy lifted bond yields. Revived appetite for riskier assets also pushed global stocks to record highs, while the U.S. dollar index rallied. Rising stocks and higher bond yields raise the opportunity cost of holding non-yielding bullion, while a stronger dollar makes gold more expensive for holders of other currencies. The spot gold price was down 0.8 percent at $1,215.81 an ounce, after falling below its 100-day moving average to $1,214.39, the lowest since March 15. U.S. gold futures settled down 0.9 percent at $1,216.10.
Boston Federal Reserve President Eric Rosengren said the fall of U.S. unemployment below its natural equilibrium could prompt faster interest-rate hikes if it were to drop below 4 percent. Kansas City Fed President Esther George said the falling jobless rate means that adjusting monetary policy is of "paramount importance." Investors were looking ahead to U.S. interest rate rises that would pressure gold as they tend to push up bond yields and strengthen the dollar.
On technical front, gold lost the ground of the 100-day moving average, erasing gains of the previous trading session. With net short positions still on the radar, gold will remain under pressure. Investors can look to the next support at $1,220.
Silver was down 1 percent at $16.07 an ounce, after falling to $16.01, the lowest since Jan. 3. Technically, silver found strong support around $16-16.15. The two cross stars in the K-chart show a balance between market bulls and bears. Investors can seek out opportunities for building long positions.

 
Dealing Room, ICBC Beijing Branch
Huang Han

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