I. Precious Metals
Gold

Gold prices dropped, remaining near a six-month low on Wednesday as the U.S. dollar hovered around 11 month peaks but was offset by festering global trade tensions. Rising U.S. interest rates also pressured bullion. Spot gold lost 0.2 percent at $1,272.44. U.S. gold futures for August delivery settled down $4.10, or 0.3 percent, at $1,274.50 per ounce.

Trade tensions between the United States and China are showing no signs of easing. On Tuesday, a White House trade adviser said Beijing had underestimated the U.S. president's resolve to impose more tariffs. That followed Washington threatening to impose tariffs on $200 billion of Chinese goods and Beijing saying it was raising tariffs on $50 billion of U.S. goods. Higher U.S. interest rates after the Federal Reserve’s policy meeting in June also make gold a less attractive investment.

On chart, gold fell for the second consecutive session, crossing below the support of $1,277 and moving closer to $1,260. The yellow metal is still likely to fall further. But a technical correction is still likely in the near term.

Silver

Silver outperformed gold to close at $16.31 an ounce. We maintain our view that the white metal is likely to find strong support at $16.20, if gold suffers no sharp losses.

II. Commodities
Crude Oil
Iran signaled it might allow a small increase in OPEC oil output, while Saudi Arabia is trying to convince fellow OPEC members of the need to raise oil output. The Organization of the Petroleum Exporting Countries will meet on Friday to discuss policy on crude production. U.S. and China calls for higher production to curb oil prices and support global economy.

U.S. crude inventories fell 5.9 million barrels last week, the largest one-week decline since January, the Energy Information Administration said on Wednesday. Refinery crude runs rose to 17.7 million barrels per day, the highest on record for this time of year, the EIA data showed.

U.S. West Texas Intermediate (WTI) crude futures for July delivery, which expires on Wednesday, rose $1.15 to settle at $66.22 a barrel, a 1.8 percent gain. WTI futures for August closed 81 cents higher at $65.71. Brent crude futures for August delivery fell 34 cents, or 0.5 percent, to end at $74.74 a barrel.

Traders said a drop in Libyan supplies, including the loss of a 400,000-barrel storage tank, also helped support prices.

Copper

Copper slipped to a three-week low on Wednesday after an inventory rise highlighted a healthy supply situation while aluminium sank to its lowest since April after data showed a rise in global output.

Copper hit a three-week low during Asian trading and was rebounding when data on London Metal Exchange inventories knocked the metal lower again in early European activity. The daily data showed on-warrant copper stocks in LME-registered warehouses jumped by 15,800 tonnes to 264,575, surging 38 percent since May 29.

Signals from the physical market also indicated the copper market was not suffering from shortages. Fears of a trade war between the United States and China have battered financial markets and spurred a big liquidation in bullish speculative positions in metals in recent days. Three-month LME copper closed down 1 percent at $6,773 a tonne, its weakest level since May 30.

Soybean

U.S. soybean futures ended slightly higher on Wednesday, consolidating one day after the front soybean contract plunged to a 9-1/2-year low. At the CBOT, July soybeans settled up 1/2 cent at $8.89-1/2 a bushel. The new crop November contracts fell 1/2 cents to $9.10-1/2 per bushel.

Soybeans tumbled Tuesday on escalating trade tensions between the United States and China. Tuesday's sell-off was also driven by generally favorable weather in the Midwest crop belt that has bolstered expectations for big U.S. soy harvests.

Dealing Room, ICBC Beijing Branch
                        Li Nan