I. Precious Metals
Gold
Gold prices edged up on weaker-than-expected U.S. economic data on Tuesday, after falling 1 percent on renewed expectations of an increase in U.S. interest rates next month that pushed the dollar higher. The dollar strengthened after Federal Reserve members pointed to the potential for higher U.S. rates next month, making commodities priced in the currency more expensive for non-U.S. buyers. Bullion rebounded above its lows after data showed the U.S. Purchasing Managers Index (PMI) was at 53.9 in February, down from 55.6 in January and expectations for 55.8. There is a lot of political uncertainty, there are safe-haven flows going into gold.
On technical front, gold can find support and resistance at the 100-day moving average of $1,213 and the 200-day moving average of $1,262. The MACD showed that bullion is at the crossroad for a clearer direction.

Silver
Silver remained consolidating above the 200-day moving average. Technically, the MACD showed that the white metal is also at the crossroad for a clearer direction. Gold’s movement will provide a guidance on its trend. A downward gold will drag silver down. But investors shall be noted that silver generally swings more sharply than bullion. When gold turns lower, investors shall cautiously take two-way trading.

II. Commodities
Crude Oil
Oil prices ended about 1 percent higher after touching three-week highs on Tuesday on OPEC's optimism for greater compliance with its deal with other producers including Russia to curb output in an effort to clear a glut that has weighed on the market. OPEC Secretary General Mohammad Barkindo told an industry conference in London that January data showed conformity from participating OPEC nations with output curbs had been above 90 percent and oil inventories would decline further this year. Oil is expected to linger around $55 in near term.

Copper
Copper prices slipped on Tuesday due to a rise in the dollar and as investors locked in gains after a rally to above $6,000 a tonne, driven by the prospect of major supply disruptions in Chile and Indonesia. Three-month copper on the London Metal Exchange slipped 0.2 percent to close at $6,060 a tonne, after rising 1.9 percent on Monday. The market has priced in a lot of the disruptions and is vulnerable to corrections. The base metal is expected to pull back gradually as long as supply disruptions did not soured.

Soybean
U.S. soybean futures fell to a three-week low on Tuesday on expectations for large South American soy harvests, analysts said. Local weather analysts said that heavy weekend rains in Argentina was probably beneficial for crops. Chicago Board of Trade March soybean futures were down 6-1/4 cents at $10.26-1/4 per bushel after dipping to $10.26, the contract's lowest since Feb. 1. Traded volumes of soybean, soymeal and soyoil were expected to stood at 262,936 lots, 99,553 lots, and 169,767 lots respectively.

Dealing Room, ICBC Beijing Branch
Cheng Yu