I. Precious Metals
Gold

Gold turned lower but held above the previous day's eight-week low on Wednesday as U.S. President Trump's abrupt firing of FBI chief James Comey weighed on U.S. stocks, though gains were capped by expectations of further interest rate increases. U.S. equities paused and the dollar eased as risk appetite faded on concerns that Trump's dismissal of Comey could make it harder for him to push through tax reform plans. Spot gold was down 0.2 percent at $1,218.95 an ounce, holding above Tuesday's two-month low at $1,213.81 but turning lower as U.S. Treasury yields turned up. U.S. gold futures for June delivery settled up 0.2 percent at $1,218.90.

On technical front, gold tried to steady around $1,220 after sharp losses in the past sessions. The unpredictability of both Trump and North Korea has been a reminder that geo-risk has not disappeared. With profit-taking at this level by market bears, support and resistance can be found at $1,220 and $1,226 respectively in the near term.

Silver

Silver was down 0.1 percent at $16.16 an ounce, bouncing off highs on expectations of further interest rate increases by the Federal Reserve. In the 4-hour chart, silver held around $16.20 with a strong green line showing a prospect of further rally in coming sessions. On the daily chart, prices show signs of stabilizing, but with insufficient upward momentum. The metal is expected to keep consolidating with key resistance at $16.35.

II. Commodities
Crude Oil

Oil prices rose more than 3 percent on Wednesday, bolstered by the biggest one-week drop in U.S. inventories so far this year, and after Iraq and Algeria joined Saudi Arabia in supporting an extension to OPEC supply cuts. The U.S. Energy Information Administration said crude inventories fell 5.2 million barrels last week, much more than the 1.8 million-barrel drop analysts predicted. Gasoline and distillate stocks also fell. Also supporting prices were comments from Algeria's energy minister that Algeria and Iraq favor extending global supply cuts when OPEC meets this month. Production rose, however, and gasoline demand over the last four weeks was 2.5 percent lower than at the same time period a year ago. OPEC member Libya said production exceeded 800,000 barrels per day (bpd) for the first time since 2014 and could rise to 1.2 million bpd later this year. Global benchmark Brent crude settled up $1.49 a barrel, or 3 percent, to $50.22 a barrel. U.S. light crude oil ended up $1.45 higher at $47.33 a barrel.

On technical front, oil is expected to retain its steam after being sold off in recent weeks on high U.S stockpiles. U.S. crude oil production is now solidly above 9.3 million barrels per day with more to come, and refined product, especially for gasoline, is oddly weak, which would weigh on this wave of rally.

Copper

Copper prices steadied on Wednesday near the four-month lows hit earlier this week as the market fretted about weak demand in top consumer China after data showed falling imports of the metal into the country. Benchmark copper on the London Metal Exchange closed 0.2 percent down at $5,500 a tonne, having touched $5,481.50 near Monday's $5,462.50, its lowest since Jan. 4. The figures for new loans, due soon, could give copper another dent as lower lending would cut the amount available for housing loans. Chinese copper imports collapsed by more than 30 percent month on month in April to 300,000 tonnes. Concentrate and ore imports tumbled by 16.6 percent to 1.36 million tonnes. Also undermining copper are stocks in LME approved warehouses, which at 339,200 tonnes are up more than 30 percent since April 28.

Soybean

The CBOT July soybean contract settled down 3-3/4 cents at $9.70-1/4 a bushel, retreating after a post-report jump to $9.89, the highest level since March 27, as the U.S. Department of Agriculture reported higher-than-expected forecast on global ending stock. The USDA projected U.S. 2017/18 soy ending stocks at 480 million bushels, well below the average pre-report trade estimate of 563 million. But on the global front, the USDA raised its forecast of 2016/17 soy ending stocks to 90.14 million tonnes, topping even the highest figure in a range of trade estimates. For 2017/18, the USDA pegged global ending stocks at 88.81 million tonnes, higher than  the average pre-report trade estimate of 86.59 million. The USDA revised up its forecast of 2016/17 soy output in Brazil to 111.6 million tonnes from 111 million of last month, and revised up that of Argentina to 57 million tonnes from 56 million in April. July soyoil fell 0.61 cents or almost 2 percent to 32.28 cents per lb. July soymeal closed down $0.80 to $317.70 per short ton.

Dealing Room, ICBC Beijing Branch
                          Huang Han

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