I. Precious Metals
Gold

Gold steadied on Monday ahead of a meeting of the U.S. Federal Reserve this week that could yield clues to the future direction of U.S. interest rates and the dollar, key factors for precious metals prices.

Gold is still a dollar story with no sign of the correlation breaking down. Dollar gains since the middle of April have led to losses of about 10 percent for spot gold, pulling prices down to $1,220 from $1,350. A significant driver for dollar gains has been safe haven flows due to trade tensions. Lack of investor interest is leading gold to behave like a currency, there are no safe haven flows to gold.

Technically, gold remained at lows, a trend expected to continue in the near term. Support can be found at $1,220, a level that will be repeatedly tested in the near term, while resistance can be met at $1,240. Investors may choose to build some long positions to profit from rebound, but shall set strict stop-loss.

Silver

Silver was up 0.4 percent at $15.52 an ounce. After days of correction, the white metal regained the ground of $15.50, but fail to cover the losses after the biggest one-day decline. Trading at lows, silver can find support at around $15.20.

II. Commodities
Crude Oil

Oil prices rose on Monday, with U.S. crude futures jumping more than 2 percent, as traders continued to focus on supply disruptions and a possible hit to crude output from U.S. sanctions on Iran.

October Brent crude futures, the most actively traded contract, settled at $75.55 a barrel, up 79 cents. The September Brent contract, which expires on Tuesday, settled at $74.97, up 68 cents, or 0.9 percent. Volumes in an expiring contract tend to dwindle in the last few days before it goes off the board. U.S. West Texas Intermediate crude futures (WTI) rose $1.44, or 2.1 percent, to settle at $70.13 a barrel.

Crude inventories at the Oklahoma, delivery point for WTI have been dwindling, in part due to the situation at the Syncrude facility that has reduced the flow of oil into the hub. Stocks at the Cushing dropped to 23.7 million barrels, the lowest since November 2014 in the week to July 20.

Oil prices have rebounded from recent lows over the last two weeks, as looming sanctions on Iran have already started to curtail exports from that country. U.S. President Donald Trump said on Monday he would meet with Iran's President, Hassan Rouhani.

Copper

Copper prices fell on Monday as investors shrugged off a potential strike at the world's largest copper mine and focused instead on economic data this week expected to show slowing growth in top metals consumer China.

Benchmark copper on the London Metal Exchange (LME) closed down 0.8 percent at $6,250 a tonne while the most traded contract on the Shanghai Futures Exchange fell 1.4 percent. Concerns over the impact of trade tensions on metals demand were still driving the market after helping to push copper down around 15 percent on the LME since early June.

Factory sector growth in China is expected to slow down for a second month in July. The official PMI survey is due on Tuesday and the private Caixin manufacturing PMI on Aug. 1. Investors are betting that copper prices will continue to fall, with the net short position on the Comex exchange the largest in nearly two years.

Soybean

U.S. soybean futures rose on Monday on concerns that deteriorating crops in several key producing countries will tighten global stocks of the grain. Soybean also drew spillover support from wheat. But worries that trade friction between China and major exporters could harm export capped its gains.

CBOT November soybeans rose 5-3/4 cents to a three-week closing high of $8.91 a bushel. Dry conditions in U.S. Midwest trimmed harvest prospects. As a result, soy crop rating is expected to ease in incoming USDA report.

Dealing Room, ICBC Beijing Branch
                        Li Nan