I. Precious Metals
Gold

Gold rose 46 cents into the positive territory, ending Wednesday roughly flat. It almost pared all gains late in the session after rallying 0.7 percent. On the hourly chart, the market was dominated by the dollar that weakened ahead of the Federal Reserve’s policy meeting, but reversed the course after its policy statement.

It is reasonable for the dollar to drop sharply before Fed’s policy statement due to recent gains as well as strong appetite for profit-taking, as it was under key resistance without seeing a macro turning point. However, the big rally after the statement came out of expectations, which has something to do with its statement on inflation. We believe that this part of gains will be pared soon.

The dollar index will be determined by the Wall Street, that will not turn sour in real sense unless U.S. stocks stabilize. Gold bulls can find two tailwinds within the day. First, the dollar would pull back in the near term. But most gains out of it are expected to lose ahead of the morning bell of the Wall Street, while $1,300 will be tested afterwards. Second, Wall Street opens steadily. The gains could be considerable if U.S. stock futures firm before the morning bell. But the chance is slim.

Silver

Silver was up 1.34 percent at $16.35 an ounce. It retained most gains after soaring 2.43 percent, sharply outperforming bullion. Other precious metals of commodity attribute also outperformed gold, a tailwind for the capital market, suggesting an economy under normal conditions. We maintain our view that silver is expected to see remarkable rebound in the coming sessions.

II. Commodities
Crude Oil

On Wednesday, July Brent futures settled up 23 cents or 0.3 percent at $73.36 a barrel. U.S. West Texas Intermediate crude futures settled up 68 cents or 1.01 percent at $67.93. We maintained our view that crude oil is unlikely to recoup all losses, while correction is expected to extend, as oil prices have bottomed. In this phase, bearish news, instead of bullish news, will draw more attention. Crude oil is quite likely to diverge with other commodities with rebounding potentials in the short term.

Copper

Three-month copper on the London Metal Exchange ended up 1.1 percent at $6,820 per tonne on Wednesday, as Chinese steel prices soared and a private survey showed growth in China's manufacturing sector unexpectedly picked up in April. A strong rebound though, the base metal still holds under the 200-day moving average. Risk remains high if it fails to breach the technical level.

Soybean

Chicago Board of Trade July soybean futures dropped 10-1/4 cents at $10.43 a bushel on Wednesday, crossing below the 10-50-day moving average. July soymeal lowered $3.7 to $400.7 per ton. July soyoil rose 0.27 cents to 30.6 per pound. A direction guidance is coming up in the near future as trading range narrows down gradually.

Dealing Room, ICBC Beijing Branch
                        Zhao Yifei