Gold rose to the highest since December 9 at $1,167 an ounce before closing at $1,161 on Wednesday as the dollar edged back from a 14-year peak and physical demand from major consumers China and India increased. Technical buying was in the driver’s seat for recent gains. The dollar index has consolidated and the big outflow from exchange-traded products (ETPs), which has been the biggest headwind for gold in the past few months, has stopped recently. Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 1 percent to 813.87 tonnes on Tuesday. Holdings are down about 14 percent since the U.S. presidential election in November. The dollar had been consolidating after solid manufacturing report. Gold's ascent in the past two weeks could come to a halt in the event of strong U.S. non-farm payrolls for December, due for release on Friday, as these would give a boost to the dollar and increase optimism about the world's largest economy.
On technical front, gold rose for the second consecutive week after declining for 7 straight weeks since the U.S. presidential election in November. The yellow metal regained around 2.7 percent post a 12 percent loss, suggesting further upside momentum with weekly resistance at $1,180 an ounce.
Silver was up 0.31 percent at $16.32 an ounce in steadied trading. Technically, a fierce fight can be seen at the key resistance of $16.5. But its strength is weakening. The white metal is expected to hit the resistance of the 50-day moving average of $16.8 in this wave of rebound.

Dealing Room, ICBC Beijing Branch
                         Yang Hui

                                  
Note: The information herein is provided for informational purpose only. You are liable for the risk incurred to the investments based on this information provided herein.