Gold prices extended gains to around $1,220 on Wednesday. On news front, the U.S. economy is healthy enough for the Fed to raise rates and begin winding down its massive bond portfolio, though low inflation and a low neutral rate may leave the central bank with diminished leeway, Fed Chair Janet Yellen said on Wednesday.
Before Congress, Yellen depicted an economy that, while growing slowly, continued to add jobs, benefited from steady household consumption and a recent jump in business investment, and was now being supported by stronger economic conditions abroad. According to her testimony the economy is on an even keel, near or beyond full employment. But she also noted that given current estimates, the federal funds rate "would not have to rise all that much further" to reach a neutral level. Her dovish testimony provided a floor to bullion.
On chart, gold formed a M-shaped top with limited upmomentum. Prices rebounded from $1,200, showing no further decline, suggesting a consolidation in the near term. The support can be found at $1,200 and $1,180 successively, while resistance can be found at the 200-day moving average of $1,232.
Silver rose on Wednesday, but failed to regain the ground of $16. On technical front, the downward path remained on track, a possible weight on its rising potentials. We maintain our vies that the support and resistance can be found at $15 and the 50-day moving average of $16.74 respectively.

 
Dealing Room, ICBC Beijing Branch
Cheng Yu

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