Gold

Gold fell more than 1 percent on Monday, giving up the prior session's gains on pressure from the rising dollar, expectations for U.S. interest rate hikes and as the market entered a holiday week. Spot gold was down 1.4 percent at $1,275.66 an ounce, off Friday's peak of $1,297, its strongest since Oct. 16.

The U.S. dollar touched its highest against a basket of major currencies in nearly a week, as the euro weakened amid political risks linked to German Chancellor Angela Merkel's failure to form a three-way coalition government. Global equities rose as confidence over economic growth around the world helped investors brush off concerns about the collapse of government talks in Germany.

The prospect of higher U.S. interest rates when the Federal Reserve meets in December helped the dollar and weighed on bullion. Market concern over U.S tax overhaul last week and probe into Russia’s meddling in U.S. Presidential election failed to lifted gold high, suggesting that investors are still watching the impact of  U.S. interest rate hikes at year-end.

On technical front, gold closed around the 100-day moving average, still within the trading range since October. A further decline would pull gold to around the 50-day moving average of $1,265. On trading strategy, investors shall sell on high if no sharp losses are seen in stock markets.

Silver

Silver was down 2.3 percent at $16.90 an ounce, tracking gold’s trajectory to the trading range of $16.5 to $17.5. The near-term and medium-term investors shall sell on highs ahead of Fed’s policy meeting. While for long-term investors, we believe they shall wait until the Fed’s policy meeting as it’s not a good entry point.

 
Dealing Room, ICBC Beijing Branch
                       Qin Gang

                                  
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