I. Precious Metals Gold Gold slipped 0.2 percent at $1,233.40 an ounce on Tuesday, after rising to $1,235.78, its highest since Nov. 11, pressured by earlier strength in the dollar as the dollar index rose by 0.04 percent. Focus shifted to Europe following weak German industry data and nervousness ahead of the French elections, lifting both the dollar and bullion. Controversy over U.S. President Donald Trump's temporary travel ban on people from seven Muslim-majority countries has recently boosted gold as safe-haven assets to a three-month peak. Weaker output in manufacturing drove the biggest monthly drop in German industrial production in nearly eight years in December. Safe-haven demand increased as investors feared far-right, eurosceptic candidate Marine Le Pen was gaining momentum before France's presidential election. On technical front, gold took a breathe on Tuesday after a three-day winning streak, as the K-chart showed. Consolidating at around $1,230, it was further away from the downside 100-day moving average. With the 50-day moving average reversing the downturn, gold is expected to rise further in near term with resistance at the 200-day moving average of $1,260.
Silver Silver tracked gold, falling 0.2 percent to $17.70 an ounce after rising to $17.79, its strongest since Nov. 11. On chart, silver is still searching for a breakthrough under the 200-day moving average, and is expected to move up further in near term. But in the long run, the 200-day moving average is consolidating, pressured by interest rates hike from the Federal Reserve and winning of Donald Trump in U.S. Presidential election, after one-year recovery since it snapped a four-year downturn in the second quarter of 2016. Within 20 cents to the key technical mark, whether the metal could cross and hold above the 200-day moving average would dominate its future trends.
II. Commodities Crude Oil Oil prices fell pressured by growing crude stockpiles in the United States and a burgeoning revival in U.S. shale production. Brent crude settled down 1.2 percent, at $55.05 a barrel, while U.S. crude ended 1.6 percent lower at $52.17. U.S. gasoline stocks are within 2 million barrels of the record high hit last February in a seasonal time frame where gasoline demand is weak. U.S. gasoline futures fell to settle at $1.4875 a gallon, after dropping earlier in the session below the 200 day moving average on a continuous chart, a bearish technical signal. Analysts have forecast that U.S. crude stockpiles rose 2.5 million barrels last week. Rising U.S. shale production and signs of slowing demand growth could offset the efforts by OPEC and other producers to reduce a supply glut. Chinese oil demand grew in 2016 at the slowest pace in at least three years, market calculations showed, the latest sign of slower demand from the world's largest energy consumer, a weight on oil prices.
Copper Benchmark copper on the London Metal Exchange ended down 0.9 percent at $5,795 a tonne on Tuesday as the dollar rose and worries about demand growth in top consumer China and elsewhere subdued sentiment, but concerns about supply curbs helped limit losses. That is particularly worrying in the context of the Chinese yuan, which has been falling since the start of the year, as China accounts for about half of global demand for industrial metals. There are downside risks around China, key areas like automotive and construction look like they are going to have a much slower year this year compared to last year, casting a darker shadow on demand prospect. On supply front, Traders expect the prospect of a strike at the Escondida copper mine in Chile, the world's biggest, and Indonesia's ban on exports from Freeport McMoRan's Grasberg mine to support copper prices.
Soybean U.S. soybean futures rose on Tuesday on strong export demand, a momentum that would continue unless bumper South America harvest comes online, traders said. But soybeans, which have risen for five of the last six sessions, failed to break through last week's high of $10.44-1/4, a level it challenged for several times. Support can be found at the 30-day moving average. Chicago Board of Trade March soybean futures settled up 6-3/4 cents at $10.42-3/4 a bushel. CBOT March soymeal futures added $3.1 at $335.9 a tonne. CBOT March soyoil futures fell 0.14 cents at $34.3. Traded volumes of soybean, soymeal and soyoil were expected to stood at 239,695 lots, 125,928 lots, and 124,319 lots respectively.
Dealing Room, ICBC Beijing Branch Lv Yan
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