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ICBC Trading Strategies of Precious Metals and Commodities Market-August 11, 2017
 

I. Precious Metals
Gold
The price of gold rose on Thursday for the third straight day, reaching a two-month high as another exchange of threats by the United States and North Korea prompted investors to buy bullion as a safe-haven asset. The spot gold price had gained 0.6 percent at $1,284.32 an ounce.
North Korea said it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific island territory of Guam.  The market was waiting for U.S. consumer inflation data on Friday that would offer more clues about future Fed decisions. But the data, regardless of its result, would have a limited impact on the dollar as the next policy meeting is still months away.
On technical front, gold rose for two days in a row, about $10 away from June’s year-to-end high of $1,295, and is expected to pull back once the geopolitical tensions failed to spur bullion prices above this level. Investors shall closely watch a potential pullback as the RSI is approaching the overbought range. On trading strategy, investors may short gold once the event fades away.

Silver
Silver was up 1.15 percent at $17.08 an ounce after breaching its 200-day moving average and hitting $17.24, its highest since June 14. On technical front, silver ended at the 200-day moving average of $17.09, and is expected to hold above the 200-day moving average. On near-term trading strategy, investors shall closely watch the progress of exchange of threats by the United States and North Korea.

II. Commodities
Crude Oil
Oil prices fell more than 1.5 percent on Thursday, as a bruising day on Wall Street bolstered fears of slowing demand amid lingering concerns over a global oversupply of crude. U.S. West Texas Intermediate crude settled down 97 cents or 1.96 percent to $48.59 a barrel. Brent crude futures were down 80 cents or 1.52 percent to $51.90 a barrel.
OPEC said its oil output rose by 173,000 bpd in July to 32.87 million bpd, led by the exempt producers plus top exporter Saudi Arabia, citing figures it collects from secondary sources. EIA data also showed inventories in the United States are at their lowest since October, having fallen for 10 of the last 12 weeks.
Crude prices are down, pressured by concern that output cuts by OPEC and its partners may not eliminate the global crude glut. On trading strategy, investors are recommended to sell oil on highs.

Copper
Aluminium and copper lingered around an over 2-year high as the escalating tensions between the United States and North Korea drove financial market to cash in profits. LME copper ended down 0.1 percent to $6,450 on profit-taking after touching $6,515 the previous session, its highest since December 2014. Technically, copper fell for two straight days. Investors are recommended to reduce long positions in the near term as the diminishing MACD upward momentum column points to potential pullback in coming sessions.

Soybean
U.S. soybean futures tumbled around 3 percent on Thursday after the U.S. Department of Agriculture's yield and production forecasts came in above trade expectations. Chicago Board of Trade November soybean futures settled down 33 cents at $9.40-1/4 per bushel after hitting $9.38-1/2, the contract's lowest since June 30.

Dealing Room, ICBC Beijing Branch
Qin Gang


(2017-08-11)
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