I. Precious Metals
Gold
Gold prices climbed to two-month highs on Friday, rising for the third straight day as investors sought refuge amid escalating tensions between North Korea and the United States, while bullion also received support from weak U.S. inflation data. Spot gold was up 2.41 percent to $1,289.31 an ounce for the week, and set for its biggest weekly gain since mid-April. It earlier hit $1,291.86, its highest level since June 7.
Geopolitical risks between North Korea and the United States boosted demand for assets considered safe-haven investments, such as gold, silver, Swiss franc and yen. Data on Friday showed U.S. consumer prices and producer prices rose less than expected in July, eroding expectations of an interest rate hike by the Federal Reserve at its December monetary policy meeting. The Fed is not going to be in any rush to increase the interest rate this year, which was also supportive to gold.
On technical front, gold rose to around $1,290, the highest since June, and is expected to test year-to-end high of $1,295 and the key mark of $1,300. Signs of narrowing gains reminded investors to closely watch the progress of tensions between North Korea and the United States. We recommend two trading strategies: 1) long gold and set stop-loss if geopolitical tensions escalate; 2) build short positions if risks is overall controllable, and cash in profits as gold prices are expected to fall once the tension eased.

Silver
Silver tracked gold, rising for the fifth consecutive day. For the week, it closed up 5.22 percent at $17.12 per ounce. On technical front, silver held above the 200-day moving average of $17.07. Investors shall closely watch pullback risks as the RSI is approaching the overbought range, and evaluate the strength in coming sessions. On trading strategy in the near term, investors could follow that of gold and closely watch the progress of tensions between North Korea and the United States.

II. Commodities
Crude Oil
Oil prices remained in volatile trading this week. Brent crude settled at $52.10 a barrel, while U.S. West Texas Intermediate crude closed at $48.82 a barrel.
Oil prices were under pressure as the two-day meeting between OPEC and non-member nations in Abu Dhabi sent no meaningful signals. The International Energy Agency raised its 2017 demand growth forecast to 1.5 million barrels per day (bpd) from 1.4 million bpd in its monthly report, but compliance by OPEC and non-OPEC countries on their output cut agreement dropped to 75 percent in July, the lowest since January. In July, OPEC oil output has risen by 230,000 barrels per day (bpd) to a 2017 high of 32.84 million bpd. On Friday Baker Hughes data showed U.S. drillers added oil rigs for a second time in the last three weeks. However, the pace of additions has slowed in recent months as firms cut spending plans in reaction to declining crude prices.
On chart, the diminishing MACD upward column suggests a bearish tone. On trading strategy, investors are recommended to sell on highs.

Copper
Base metals slumped on Friday as investors shunned risky assets amid tensions on the Korean peninsula and secured profits after a recent rally. LME copper slipped 0.2 percent to close at $6,411 amid indications that physical demand in China was faltering. Investors are recommended to cut their long positions as tensions on the Korean peninsula may trigger profit-taking in the near term.

Soybean
U.S. soybean futures closed up on Friday, on bargain-hunting following the U.S. Department of Agriculture's forecast for a record high crop. Prospect of a harvest capped gains. For the week, soybean futures fell 1.2 percent, extending its losses to the third consecutive week. Soymeal futures declined 1.6 percent, while soyoil futures slipped 0.3 percent.

Dealing Room, ICBC Beijing Branch
Qin Gang