I. Precious Metals
Gold
Gold turned negative on Wednesday after the Federal Reserve increased interest rates but was less dovish than expected following a two-day meeting, and the dollar sharply pared its losses against a basket of major currencies.
It was the second time in three months that the Fed raised interest rates by a quarter percentage point, and the U.S. central bank cited continued economic growth and job market strength. It also announced it would begin cutting its holdings of bonds and other securities this year.
Spot gold fell 0.2 percent at $1,263.03 an ounce, while U.S. gold futures for August delivery settled up 0.6 percent at $1,275.90 prior to the Fed's statement. Bullion rallied earlier when data showed an unexpected month-on-month drop in U.S. consumer prices and retail sales, suggesting inflation pressures are moderating, which stoked expectations that Fed rate policy would remain cautious. The metal peaked at $1,279.37 as the dollar index fell to its lowest since Nov. 9 following the data.
On technical front, gold is expected to test the support of the 50-day moving average of $1,261. The momentum column of the MACD index is expanding under the axis zero, suggesting further losses under downside pressure.

Silver
Silver rose 0.4 percent to $16.93 an ounce, reversing major gains earlier that drove it up 3 percent above the 50-day moving average of $17.32 after the Federal Reserve’s unexpected hawkish statement. Silver is expected to fall further with next support at $16.74.

II. Commodities
Crude Oil
Crude oil prices slumped nearly 4 percent to their lowest close in seven months on Wednesday, hit by an unexpected large build in gasoline inventories and an international outlook that suggests a big increase in supply in the coming year.
The news underscored the market's ongoing struggles with weak gasoline demand in the United States, and rising production, especially from U.S. shale drillers. Despite nearly six months of OPEC-led efforts to reduce a global glut, oil prices have not stabilized at higher levels as many had anticipated when the group agreed with other producers to cut supply back.
After rising for three consecutive days, U.S. West Texas Intermediate crude futures fell $1.73, or 3.7 percent, to settle at $44.73 per barrel, its lowest close since Nov. 14. WTI has dropped 18 percent since its closing high of $54.45 in late February. Brent also slumped, losing $1.72, or 3.5 percent, to settle at $47 a barrel. That was the lowest close for Brent since Nov. 29, the day before OPEC agreed to cut output.
Both benchmarks were dragged lower by a bigger than 4 percent drop in U.S. gasoline futures after the U.S. Energy Information Administration (EIA) reported a 2.1 million-barrel increase in gasoline inventories last week.
At 242.4 million, U.S. gasoline inventories were 9 percent higher than the five-year average as demand was down 1.2 percent over the last four weeks when compared with a year ago, according to EIA. The bearish gasoline data overshadowed a 1.7 million-barrel drawdown in U.S. crude stocks, analysts said.
Growth in oil supply next year is expected to outpace an anticipated pick-up in demand that will push global consumption above 100 million barrels per day (bpd) for the first time, the International Energy Agency said on Wednesday. In 2018, non-OPEC production is expected to grow by 1.5 million bpd which is slightly more than the expected increase in global demand.

Copper
Copper was pushed lower ahead of an anticipated U.S. Federal Reserve interest rate rise later on Wednesday that is expected to strengthen the dollar, making industrial metals more expensive to holders of other currencies. But solid Chinese economic data limited losses and resulted in higher steel prices that pushed up zinc and lifted nickel from a one-year low.
London Metal Exchange copper did not trade at the close but was bid down 0.3 percent at $5,698 a tonne, adding to losses of 1.5 percent over the previous two sessions.
Data showed China's economy generally remained on a solid footing and industrial output and consumption beat expectations in May. But tighter monetary policy, a cooling housing market and slowing infrastructure investment suggested that Chinese growth would gradually lose momentum in the second half of the year.
Copper demand from the auto sector will increase nine-fold over the next decade due to growing use of electric vehicles on roads, according to an industry report.

Soybean
U.S. soy futures were mostly flat on Wednesday, paring early gains on forecasts for crop-friendly rainfall. Investors continued to roll over front-month contracts with short spread deal appearing on the radar. CBOT July soybeans edged 3/4 cent lower to $9.31-3/4. November soybeans remained unchanged at $9.39. Weaker corn and wheat futures also weigh on soybeans futures. July soymeal closed up $0.3 to $301.8 per short ton. July soyoil was flat at 32.09 cents per lb.

Dealing Room, ICBC Beijing Branch
Huang Han