I. Precious Metals
Gold
Gold fell 1 percent on Friday after better-than-expected U.S. jobs data boosted the beleaguered dollar and potentially cleared the way for the U.S. Federal Reserve to raise interest rates for a third time this year. Spot gold was down 0.8 percent at $1,257.66 an ounce after falling 1.1 percent. It was on track to end the week down 0.9 percent following three straight weeks higher.
U.S. employers hired more workers than expected in July and raised their hourly earnings by the most in five months, signs of labor market tightness and offering the Fed some assurance that inflation will gradually rise to its 2 percent target. The U.S. dollar, which was wallowing near 15-month lows prior to the figures, rallied to around 93.5 after the release. The strong rise in non-farm payrolls together with the drop back in the unemployment rate to a joint 16-year low suggests the Fed will still need to raise rates again later this year, even if inflation remains subdued.
On technical front, gold will meet resistance at around $1,280, extending the downward path since September 2012. Still lingering around the key technical mark in the medium term, gold is expected to cross over technical resistance on any key events. Geopolitical tensions between China and India, Palestine and Israel, and in Korea Peninsula, could drive up both gold and the dollar. In the absence of substantial geopolitical risks, we expect the gold price to fall to $1,230 and end the year below $1,200 per ounce.

Silver
silver fell 2 percent to $16.28 per ounce, having hit a two-week low of $16.17. The U.S. Labor Department is expected to release upbeat July job report. Investors shall closely watch the support at $16.50. A strong job report would pull silver below the support, and trigger a round of decline in the medium term.

II. Commodities
Crude Oil
Oil prices rose on Friday after a strong U.S. jobs report bolstered hopes for growing energy demand, but crude prices declined for the week, pressured by rising OPEC exports and strong U.S. Output. Global benchmark Brent futures gained 0.8 percent, to settle at $52.42 a barrel, while U.S. West Texas Intermediate crude rose 1.1 percent, to settle at $49.58.
U.S. employers hired more workers than expected in July and raised their wages, the Labor Department reported. U.S. gasoline and diesel demand also remained strong. For the week, oil prices were pressured by rising U.S. and OPEC output and OPEC exports, although strong demand limited the declines.
The Organization of the Petroleum Exporting Countries exported 26.11 million bpd in July, represented a rise of 370,000 bpd, with most coming from Nigeria. A survey also showed OPEC oil output at 2017 highs in July, led by Libyan and Nigerian gains. U.S. oil production, meanwhile, hit 9.43 million bpd, the highest since August 2015 and up 12 percent from a low in June last year.
When prices were low in June 2017, some U.S. energy companies decided to reduce the number of rigs drilling for oil. Those cuts have shown up in the rig count over the past few weeks. Oil prices are expected to find support at recent lows.

Copper
Three-month LME copper ended 0.3 percent firmer at $6,372 a tonne, getting a strong boost from China. U.S. employers hired more workers than expected in July and raised their wages, signs of labour market tightness that likely clears the way for the Federal Reserve to announce a plan to start shrinking its massive bond portfolio. A firmer dollar weighs on copper prices, but a new U.S. tax plan and upbeat economic data would give a boost to commodities priced in the U.S. Currency, offsetting the headwinds of a stronger dollar. The U.S. dollar was on course for its biggest one-day gain against a basket of major rivals so far this year after a strong U.S. July payrolls report and following comments about a new U.S. tax plan.

Soybean
Chicago Board of Trade soybean futures fell on Friday, pressured by outlooks for rain and cool weather in key U.S. growing areas that will foster development of the crop during critical periods, traders said. But the decline was limited with support at Thursday’s lows and the 20-day moving average. CBOT November soybeans were 3-3/4 cents lower at $9.56-3/4 a bushel. Soymeal futures fell, but find support at Thursday’s trough. Soyoil futures closed higher, buoyed by stronger oil prices. With resistance at the 200-day moving average, CBOT December soymeal fell $3.20 at $309.40 a short ton, while December soyoil ended up 0.23 cents at 34.03 cents per lb. For the week, November soybean futures fell 5.5 percent, soymeal futures dropped 5.8 percent and soyoil futures were down 2.9 percent. The trading volume for soybean, soymeal and soyoil stood at 161,454, 74,442 and 87,913 lots respectively.

Dealing Room, ICBC Beijing Branch
Lv Yan