I. Precious Metals
Gold

Gold prices on Thursday approached a four-month high set on the previous day after minutes of a European Central Bank meeting showed a more aggressive tone and boosted the euro against the U.S. Dollar.

The December meeting minutes said the central bank should revisit its policy message in early 2018 and gradually adjust its language to reflect improved growth prospects. Investors would probably take a policy message change as a sign that rate-setters may begin to wind down their 2.55-trillion-euro bond-buying program.

A stronger euro potentially boosts demand for gold by making dollar-priced bullion cheaper for European investors. The dollar weakened more broadly after U.S. data showed a rise in jobless claims and a decrease in producer prices. Spot gold was up 0.5 percent at $1,322.74 an ounce after touching $1,326.56 on Wednesday, the highest since Sept. 15.

On chart, gold edged up in a choppy trade, but was still capped by the Fibonacci 23.6% retracement level at $1,322. Prices will continue to test the resistance in the near term. A correction is expected if no effective breakthrough is made.

On trading strategy, investors are not recommended to chase highs. Market bears may build short positions gradually by strictly setting stop-loss.

Silver

Silver was up 0.1 percent at $16.96 an ounce from a two-week low of $16.86 on Wednesday. We maintain our view on rangebound trading in the near term.

The 100-day moving average and 200-day moving average of $16.93 continued to provide a floor. Investors can keep an eye on the movement around this level. On trading strategy, investors are recommended to stay on the sidelines before direction is confirmed.

II. Commodities
Crude Oil

Oil prices retreated from big gains on Thursday, but still managed to settle at three-year highs after the global Brent benchmark hit $70 a barrel on signs of tightening supply in the United States.

Brent crude futures settled 6 cents higher at $69.26 a barrel, after hitting $70.05 a barrel during the session, its highest level since November 2014. Brent's settlement still represents a three-year closing high. Brent has gained 5 percent since the beginning of the year, picking up from its late-year surge. U.S. West Texas Intermediate (WTI) crude futures settled at $63.80 a barrel, up 23 cents, the highest since December 2014.

Prices came off highs after an early surge that took benchmarks past key resistance levels that produced a flurry of buying in an active day in the market. However, analysts said it would take more than one day to convincingly break through $70 a barrel on Brent.

The relative strength index (RSI), which measures the speed and breadth of a rally, shows oil in an overbought condition, suggesting the move has come too far, too fast. A correction is expected in near term.

Copper

Copper remained tight rangebound, down 0.2 percent at $7,140. Technical front, prices are pulling back after peaking to correct the overbought bets, with support at previous resistance of $7,000. If the level is breached, the next support can be found at $6,900. In the medium and longer term, lingering huge potential in market demand is expected to push copper higher.

Soybean

Chicago soybean futures fell to a four-month low on Thursday ahead of U.S. Department of Agriculture data due on Friday that was expected to show bigger U.S. stockpiles and higher Brazilian soy output.

Analyst expect the USDA to boost U.S. soybean ending stocks and its forecast of production Brazil. The USDA reported weekly soybean export sales of 607,400 tonnes last week, in line with analysts’ forecast. CBOT March soybeans finished 5 cents lower at $9.50 per bushel. 

Dealing Room, ICBC Beijing Branch
                        Li Nan