Gold prices rose on Monday after falling for three weeks, as the dollar and long-dated U.S. Treasury bond yields retreated from recent highs. The metal has been kept under pressure, as the dollar and bond yields benefited from heightened expectations of enlarged fiscal spending by U.S. President-elect Donald Trump. But reignited concerns over the bearish prospect of oil prices may make a dent in the recovering inflation and the Federal Reserve’s interest rate hike progress. The dollar index was down 0.2 percent against a basket of six major currencies, consolidating at highs for the third consecutive day. On technical front, the dollar was under pressure to pull back after a three-week rally, shifting investors’ attention from the dollar assets at highs to gold at lows. Traders also said a directive from the People's Bank of China to limit gold imports was creating concerns about supply in the top consumer of the metal and kept premiums in Shanghai around $22. Gold premiums in China jumped to the highest in nearly three years last week on supply worries.
On chart, spot gold was up 0.82 percent at $1,193.99 an ounce, after climbing as high as $1,198.09. It still remained below the key integral mark. On the daily chart, the 500-day moving average moved rapidly down after breaching below the 200-day moving average. The lower end of the Bollinger path expanded further down, indicating ample downward potentials. In near term, the MACD index bottomed up, pointing to some recovery momentum. In short, gold is expected to rebound back to $1,210 before resuming declines to $1,150 in mid-December.
Silver rose 0.5 percent at $16.58 an ounce on Monday, tracking gold’s rebounding trajectory. On the daily chart, the MACD rebounded sharply, approaching the axis zero, while the K-chart returned below the 20-day moving average with the aforementioned technical support, showing increasing likelihood for a breakthrough. However, the 50-day moving average is about to breach below the 200-day moving average, pointing to a downward trend in the medium term. The white metal is expected to find resistance at $17.10 and below $16 in the near and medium term.

Dealing Room, ICBC Beijing Branch
Lv Yan

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