Gold prices fell more than 1 percent on Monday from the previous session's 13-month high as relief that North Korea did not conduct a missile test over the weekend helped to lift global stocks, the U.S. dollar and bond yields. The dollar strengthened on Monday, making gold more expensive for holders of other currencies, potentially reducing demand, while higher bond yields increase the opportunity cost of non-yielding bullion.
Demand for safer assets, including gold, also weakened after Hurricane Irma wreaked less damage in Florida than had been feared. On Friday it touched $1,357.54, the highest since August last year, on fears of a North Korean missile launch and the impact of Irma on the U.S. economy, helping to drive the dollar to its weakest since January 2015 and U.S. bond yields to 10-month lows.
On technical front, gold tumbled on Monday, posing the largest one-day decline since July 3, after fierce fight around $1,350. Further correction is expected in the near term, which will be determined by the dollar and U.S. bond. Investors may choose to stay on the sidelines if bullion crossed below $1,320.
Silver fell 0.8 percent to $17.78 an ounce, down from Friday's five-month high of $18.21. It hit the trough of $17.71 during the session.
On technical front, silver is under heavy pressure of profit-taking and bearish bets as it met little resistance in the wave of rally since August 25. The support between $17.73 to $17.80 shall be watched. Investors may cash in profits in long positions in case that gold pulls back to $1,320.

 
Dealing Room, ICBC Beijing Branch
Huang Han

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