|
Gold notched a quarterly gain of about 8.4 percent on Friday, marking its best quarter in a year. Spot gold was up 0.4 percent at $1,247.4 an ounce. The following elements posed impact on the performance of precious metals in the first quarter.
1.Uncertainty over U.S. President Donald Trump's economic policy. Investors worried the ability of President Trump to enact his economic policy since he pulled the U.S. out of the Trans-Pacific Partnership (TPP) and suffered a setback in health care reform, sending the dollar and gold to different path.
2.Uncertain political outlook in Europe. Britain's departure from the European Union and approaching French elections from April to May kept the market in check, despite some risks were relieved after the March election in Netherlands. The fate of French far right leader Marine Le Pen would dominate the performance of gold in the second quarter.
3.Tightening monetary policy by the Federal Reserve. The U.S central bank raised interest rates in Q1 as expected, sending signals for further tightening. A rising outlook for more hikes would keep gold prices under pressure.
Gold’s performance this year will be decided by the aforementioned factors. Investors shall be wary about sharper volatility, especially in Q2 when the French elections were undergoing. Bullion prices are expected to fall sharply after the risk event is behind us. Any progress in political events shall be closely watched.
Silver tracked gold in Q1. Its industrial attribute posed its impact mainly in lagging its volatility. Investors shall be more patient in the trading. On technical front, silver found resistance around $18.5, which needs strong drivers to cross over, suggesting that it’s more likely to turn downward or remain consolidation.
Dealing Room, ICBC Beijing Branch
Qin Gang
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.
|
