Gold rallied to a one-month high of $1,291.34 before closing up 1.1 percent at $1,290.92 on Tuesday. The outcome of the U.S. election sparked losses in stocks and the dollar, prompting investors to seek out precious metals as a haven from risk. The announcement of an FBI investigation into Hillary Clinton's use of a private email server during her time as Secretary of State helped send the VIX, the so-called fear index of market volatility, to its highest in seven weeks, fueling widespread risk aversion. Fresh opinion polls showed Democrat Clinton's lead over Republican Donald Trump has narrowed since early last week. But investors do not want to see a Trump win due to uncertainty over U.S. economic and foreign policy. The Trump risk, however, seems to be back in the market, which would likely boost gold. The two-day Federal Open Market Committee meeting began on Tuesday and will also be closely monitored for clues on the timing of a possible U.S. interest rate hike.
On chart, gold rallied at a larger pace compared with yesterday, and extended gains after holding above the 200-day moving average, seeing weak resistance at $1,280 and heavy pressure at the 100-day moving average. After rebounding to around $1,290, the 100-day moving average of $1,298 will be a key technical indicator. Technically, gold is expected to consolidate after hitting the resistance. Any breakthrough, which is unlikely, will send prices further higher to the range between $1,300 and the 50-day moving average of $1,315. Investors shall closely watch the movement after hitting $1,298.
Silver was up 2.9 percent at $18.38 an ounce, having peaked at $18.49, after breaking key resistance. On chart, the white metal was kept under the 100-day moving average on Tuesday and early Wednesday. Technically, silver remained steady after bouncing off highs, suggesting bullish sentiment. It continued to trade above Tuesday’s closing level this morning, showing that the 100-day moving average could hardly cap its upside. Silver, as a result, is quite likely to breach $18.5 and rise further to around $19.

 
Dealing Room, ICBC Beijing Branch
Lv Yan

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