Gold prices climbed above $1,340 an ounce on Tuesday. Much of gold's recent strength can be attributed to the flight to assets perceived as being at less risk from geopolitical uncertainty that has been stoked up by events in the Korean peninsula. Analysts and South Korean policymakers believe North Korea may test another weapon on or around Sept. 9, its founding day. South Korea said on Monday it was preparing fresh military drills with its ally the United States and ramping up its ballistic missile defenses in response to North Korea’s sixth and most powerful nuclear test a day earlier. The escalated geopolitical tensions and eased U.S. dollar will continue to provide a floor to bullion. In the near term, gold is expected to remain robust.
On technical front, we maintain our view that gold will meet resistance at $1,350. In the near term, gold is expected to test last year’s high at $1,370. Gold bulls are recommended to hold their positions.
Silver underperformed gold, closing with a cross pattern on chart, due to mounting safe-haven sentiment. But we believe this would not last. As long as risk appetite eased, silver’s gains would lead gold.
On technical front, headline index basically remains intact without divergence in the MACD index. The white silver is expected to test the key mark of $18 in the near term.

 
Dealing Room, ICBC Beijing Branch
Cheng Yu

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