Gold prices edged up on weaker-than-expected U.S. economic data on Tuesday, after falling 1 percent on renewed expectations of an increase in U.S. interest rates next month that pushed the dollar higher. The dollar strengthened after Federal Reserve members pointed to the potential for higher U.S. rates next month, making commodities priced in the currency more expensive for non-U.S. buyers. Bullion rebounded above its lows after data showed the U.S. Purchasing Managers Index (PMI) was at 53.9 in February, down from 55.6 in January and expectations for 55.8. There is a lot of political uncertainty, there are safe-haven flows going into gold.
On technical front, gold can find support and resistance at the 100-day moving average of $1,213 and the 200-day moving average of $1,262. The MACD showed that bullion is at the crossroad for a clearer direction.
Silver remained consolidating above the 200-day moving average. Technically, the MACD showed that the white metal is also at the crossroad for a clearer direction. Gold’s movement will provide a guidance on its trend. A downward gold will drag silver down. But investors shall be noted that silver generally swings more sharply than bullion. When gold turns lower, investors shall cautiously take two-way trading.

 
Dealing Room, ICBC Beijing Branch
Cheng Yu

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