Gold prices climbed to $1,256.71 an ounce on Friday, boosted by a weaker dollar, economic and political uncertainty around the world, as well as the limited prospect of further interest rate rises in the United States. After a weak start, bullion closed the week slightly up, recording the first increase in three weeks, driven by recent inflation weakness.
Chicago Federal Reserve Bank President Charles Evans said he is increasingly concerned about inflation after two rates hikes this year. He said it may be worthwhile for the Fed to wait until year-end to decide on another rate hike.
U.S. Markit manufacturing and service PMI fell short of market expectations in June, data released yesterday showed. But new U.S. single-family home sales rose in May and the median sales price surged to an all-time high, suggesting the housing market had regained momentum. The relatively soft economic data weighed on the dollar index, lifting gold prices.
U.S. senate steered toward a potential showdown vote on President Trump’s health care bill next week. A widely expected defeat is likely to spur bullion further higher.
On technical front, gold was supported at the 200-day moving average, showing signs of rebound. Crossing above the resistance of $1,262 means further move-up. The daily MACD index also indicate possible rebound in coming sessions. On trading strategy, investors are recommended to buy gold on dips.
Silver tracked gold, up to $16.713 an ounce. Technically, the K-line showed signs of reversion. On trading strategy, investors are recommended to buy silver on dips.

 
Dealing Room, ICBC Beijing Branch
Qin Gang

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