Gold

Gold on Monday held close to 5-1/2-month lows, with a strong dollar offsetting the upward influence of an escalating trade dispute between the United States and China. Spot gold prices were hemmed in a tight trading range after Friday's selloff because of competing pressure and support on Monday, forcing investors to reassess their positions.

Spot gold was flat at $1,278.18 an ounce by 1:33 p.m. EDT (1733 GMT), while U.S. gold futures for August delivery settled up $1.60, or 0.1 percent, at $1,280.10 per ounce. Gold prices remained locked just below $1,280 an ounce pressured by a firmer dollar. Gold plunged 1.8 percent on Friday, its biggest one-day fall since November 2016, despite Washington deciding to enact tariffs on $50 billion in Chinese goods.

On chart, gold is approaching previous support at $1,277, suggesting a short-lived technical correction after recent sharp decline. But the downward tendency seems to remain intact. The loss of the support could pull bullion to as low as $1,240.

Silver

Silver lost 0.4 percent at $16.45 an ounce after falling 3.6 percent on Friday. Silver sunk to $16.39, its lowest in almost two weeks, paring gains since early June. After crossing below the 50-day, 100-day and 200-day moving average successively, silver came back to around $16.50 and is expected to consolidate around this level.

On chart, silver sees further downward room. But if gold suffers no sharp losses, the white metal is likely to find strong support at $16.20, a level that holds well since February.

 
Dealing Room, ICBC Beijing Branch
                       Li Nan