I. Precious Metals
Gold
Gold dropped to an eight-week low on Tuesday as safe-haven demand continued to fade in the wake of Emmanuel Macron's victory in the French election and as expectations for tighter U.S. monetary policy lifted bond yields. Revived appetite for riskier assets also pushed global stocks to record highs, while the U.S. dollar index rallied. Rising stocks and higher bond yields raise the opportunity cost of holding non-yielding bullion, while a stronger dollar makes gold more expensive for holders of other currencies. The spot gold price was down 0.8 percent at $1,215.81 an ounce, after falling below its 100-day moving average to $1,214.39, the lowest since March 15. U.S. gold futures settled down 0.9 percent at $1,216.10.
Boston Federal Reserve President Eric Rosengren said the fall of U.S. unemployment below its natural equilibrium could prompt faster interest-rate hikes if it were to drop below 4 percent. Kansas City Fed President Esther George said the falling jobless rate means that adjusting monetary policy is of "paramount importance." Investors were looking ahead to U.S. interest rate rises that would pressure gold as they tend to push up bond yields and strengthen the dollar.
On technical front, gold lost the ground of the 100-day moving average, erasing gains of the previous trading session. With net short positions still on the radar, gold will remain under pressure. Investors can look to the next support at $1,220.

Silver
Silver was down 1 percent at $16.07 an ounce, after falling to $16.01, the lowest since Jan. 3. Technically, silver found strong support around $16-16.15. The two cross stars in the K-chart show a balance between market bulls and bears. Investors can seek out opportunities for building long positions.

II. Commodities
Crude Oil
Oil prices fell on Tuesday, rattled by concern over slowing demand, a rising U.S. dollar and increasing U.S. crude output that has shaken investors' faith in the ability of OPEC to rebalance the market. Brent futures lost 61 cents, or 1.2 percent, to settle at $48.73 a barrel, while U.S. West Texas Intermediate crude fell 55 cents, or 1.2 percent, to $45.88. That was the lowest close for both futures since May 4 and the second lowest since Nov. 29 - the day before the Organization of the Petroleum Exporting Countries (OPEC) agreed to cut production during the first half of 2017. The U.S. dollar, meanwhile, gained 1 percent against a basket of currencies so far this week as it rose to its highest since April 21, pressuring greenback-denominated oil.
Weekly U.S. data on crude production and inventories, plus monthly reports on supply and demand from OPEC and the U.S. Energy Information Administration (EIA) this week, should provide a more detailed picture of how quickly global crude inventories are falling. Analysts forecast U.S. crude stocks declined for a fifth week in a row, falling 1.8 million barrels during the week ended May 5, since hitting an all-time high over 535.5 million barrels at the end of March, according to a Reuters poll.
Coupled with that is faltering manufacturing activity and a drop in commodity imports in China, the world's second-largest economy and biggest raw materials consumer. Top oil exporter Saudi Arabia said Monday it would "do whatever it takes" to rebalance the market. Even though OPEC has stuck to its pledge to cut production, U.S. output has risen by more than 10 percent since mid-2016 to 9.3 million barrels per day in 2017 and a forecast all-time annual high of almost 10 million barrels in 2018, boosted by the shale sector and near the output of Russia and Saudi Arabia.
On technical front, the volatile trading shows investors’ uncertainty. Amid a choppy market, monthly reports from the EIA and OPEC this week should provide a more detailed picture of its future movement, that investors shall focus on.

Copper
Copper inched up on Tuesday out of bargain hunting after falling to a four-month low in the previous session due to data showing a sharp drop in imports of the metal by China, which consumes nearly half the world's copper. Capping copper's gains, the dollar rose versus a currency basket, with another U.S. rate hike in June now almost certain. Three-month copper on the London Metal Exchange ended 0.5 percent higher at $5,512 a tonne, after touching its lowest since January in the previous session. Daily LME data showed copper stocks down 8,725 tonnes to 342,825. However, they remain near their highest since last October.
On technical front, yesterday’s gain is a correction following a few months of losses. Copper might trail in the second and third quarter on increasing rates in the U.S. and monetary policy tightening in China.

Soybean
U.S. soybean futures climbed nearly 1 percent on Tuesday on technical buying, including short-covering, a day ahead of a U.S. government crop report. The benchmark CBOT July soybean contract settled up 9-1/4 cents at $9.74 per bushel. Market is subject to short-coverings as funds hold net short positions ahead of the U.S. Department of Agriculture's May 10 supply/demand report. The report will include the government's first official crop production and usage estimates for the 2017/18 marketing year. CBOT July soymeal closed up, posting the largest gains among the soy group, boosting the net margin of crushed soybeans. July soymeal rallied $4.9 to $318.5 per short ton. CBOT July soyoil ended down, underperforming soymeal in soymean/soyoil swap trading. July soyoil fell 0.05 cents to 32.89 cents per lb.

Dealing Room, ICBC Beijing Branch
Huang Han