I. Precious Metals
Gold

Gold prices edged up 0.69 percent at $1,283.68 per ounce on Tuesday on support from concerns over global geopolitical tensions and a weaker dollar.

As we said in previous review that gold’ decline is expected to be short-lived, and to recover sharply afterwards. First, the turnover of U.S. stocks was declining, instead of increasing, and market expectations over tax overhaul in attracting capital were over-reacted. Second, technical indicators also did not support a further decline as 1,200 provides a solid bottom in the past years. Taking the opportunity of interest rate hike by the Federal Reserve, gold is expected to stabilize or reverse the course after hitting the key support of Fibonacci.

On the other hand, geopolitical tensions failed to provide a floor to bullion, deepening panic sentiment among investors. After market steadied, these supposedly upbeat factors are likely to double their boosting effect on event of risky event.

We maintain our bullish view on bullion. But investors who missed this round of rally are not recommended to build high positions due to the risk of possible pullback. End-of-year extreme movement shall also be watched during light season.

Silver

Silver was up 1 percent at $16.53 an ounce on Tuesday. Despite of recent strength, the prices remained low, suggesting more bargain hunting, instead of profit-taking. But on trading strategy, investors are not recommended to buy in aggressively as no correction is seen in the past seven trading sessions. We only suggest slight position-building for investors that missed this round of rally.

II. Commodities
Crude Oil

Oil prices surged on Tuesday, boosted by news of an explosion on a Libyan crude pipeline as well as voluntary OPEC-led supply cuts. Brent crude, the international benchmark for oil prices, settled at $67.02 a barrel, up by $1.77, or 2.71 percent. U.S. crude climbed $1.50, or 2.6 percent, to end the session at $59.97 a barrel.

Armed assailants blew up a pipeline pumping crude oil to the port of Es Sider on Tuesday, cutting Libya's output by up to 100,000 barrels per day (bpd), according to military and energy sources. We doubt the round of rally could sustain due to the thinned trading volume during the Christmas holiday.

Copper

London Metal Exchange was closed on Tuesday.

Soybean

CBOT January soybeans were up 9-3/4 cents to $9.59-1/4 per bushel on Tuesday, as investors bought back short positions amid extended forecasts for warm and dry weather in Argentina. March soymeals were up $2.4 at $315.20 per short tonne. March soyoil ended up 0.46 cents at 33.2 cents per pound.

Dealing Room, ICBC Beijing Branch
                        Zhao Yifei