I. Precious Metals
Gold
Gold prices eased after hitting $1,270.60. It closed the day at $1,262.34 per ounce. Worries over Greek debt and prospect of early elections in Italy dampened risk appetite, sending Asia market lower and boosting safe-haven asset such as Japanese yen and gold. But trading was thin due to a long holiday weekend. U.S. personal consumer spending and income rose as expected in April, but inflation failed to hit the Federal Reserve’s 2 percent target. The personal consumption expenditures (PCE) price rebounded 0.2 percent on an annual basis and 1.5 percent month-on-month. Market expected that the Federal Reserve would raise interest rates next month, capping gold’s further gains.
On technical front, gold meets resistance at $1,270. A pullback is quite possible without an effective breakthrough in the near term. Investors are recommended to sell gold on highs.

Silver
Silver tracked gold, closing in the negative territory. A cross in the daily chart suggests uncertainty at current level. The 50-day, 100-day and 200-day moving average almost overlapped, indicating heavy resistance from $17.4 to $17.5. Moreover, the upward momentum column shows signs of receding, suggesting a downtrend. Investors are recommended to short silver at highs.

II. Commodities
Crude Oil
Oil prices fell about 1 percent on Tuesday, on signs of resurgent crude output in Libya and concerns that extended production cuts by leading exporting countries may not be enough to drain a global glut. U.S. light crude fell to $49.66, while Brent crude ended the session at $51.84 a barrel. Crude prices fell around 3 to 4 percent after the OPEC agreed to extend the output cut deal beyond March next year. Part of the problem for OPEC is booming shale production in the United States. U.S. drillers continued to add rigs, weighing on prices. Investors are recommended to remain cautious as oil prices are expected to remain rangebound in the near and medium term.

Copper
Copper edged lower in quiet trade on Tuesday due to the long weekend holiday. London Metal Exchange three-month copper finished down 0.8 percent at $5,610 a tonne. Other base metals fell less than 0.5 percent compared with the closing prices of Friday. A local recruiter in Chile said companies had stepped up their requests for engineers and other positions at early stage mining projects, suggesting a recovering environment. Copper prices are expected to remain rangebound in the near term.

Soybean
U.S. soybean futures fell to their lowest level in nearly 14 months on Tuesday on technical selling and better-than-expected weather conditions in U.S. Chicago Board of Trade July soybeans settled down 13-3/4 cents at $9.12-3/4 per bushel. Market was quiet after the U.S. Department of Agriculture said private exporters sold 130,000 tonnes of old-crop U.S. soybeans to unknown destinations. Soybean export inspections for the latest week were 335,519 tonnes, falling within the range of market expectations of 250,000-450,000 tonnes. A supply glut will keep soybeans in check. Investors are not recommended to chase highs. Instead, they shall wait till they see signs of stabilization.

Dealing Room, ICBC Beijing Branch
Qin Gang