Gold

Gold edged lower on Monday, retreating further from last week's 3-1/2-month high as the U.S. dollar regained some ground against the buoyant euro and traders bet on further U.S. interest rate hikes after Friday's payrolls data.

The dollar, which has remained weak after its biggest annual drop since 2003, had helped to lift assets priced in the U.S. currency, with gold last week registering a fourth straight weekly gain for the first time since April.

Market participants are awaiting the Federal Reserve’s statement on interest rates hike and U.S. Consumer Price Index (CPI) data later this week, which are expected to show inflation likely increased 0.2 percent in December after rising 0.1 percent in November.

On chart, gold is losing some steam and is approaching the Fibonacci 23.6% retracement level at $1,322, a heavy resistance for the white metal. Gold is expected to see a correction in the near term with support at $1,300 to $1,302.

On trading strategy, investors are recommended to stay on the sidelines. While those with net long positions may consider cash in profits and rebuild positions after it pulls back.

Silver

Silver was down 0.7 percent at $17.11 an ounce, having hit a 1-1/2-month high of $17.29 on Friday. Last week, it rose 1.6 percent. Currently, silver still hovered below the resistance of $17.3-$17.4, and pulled back for the second straight day.

Considering that gold is expected to remain rangebound in near term, the 100-day and 200-day moving average will continue to provide support. On trading strategy, investors are recommended to stay on the sidelines.

 
Dealing Room, ICBC Beijing Branch
                       Li Nan