I. Precious Metals
Gold
Gold fell more than 1 percent on Thursday after the dollar rose to a 3-1/2 month high against the yen, as markets weighed the election of Donald Trump as U.S. president and how his policies could affect economic growth. Trump's plans call for infrastructure building and massive tax cuts which could increase the U.S. budget deficit and help support gold. His victory has also called into question the expected U.S. interest rate increase in December. But the Republican president-elect has also vowed to boost growth in the U.S. economy which could boost the dollar and in turn hurt gold, which is priced in the U.S. Currency. The Republican sweep of the White House and Congress could break the current gridlock over national policy in a potential boon to the U.S. economy, St. Louis Federal Reserve bank president James Bullard said on Thursday. Bullard said the potential positives from Tuesday's outcome, including the possibility of regulatory reform and a boost to growth through new infrastructure spending. Richmond Fed president Jeffrey Lacker said the case for a rate hike in December is strong. If the next Congress passes a stimulus program, the Federal Reserve should respond with more interest-rate hikes, he said. Gold would be kept under pressure against the background of Fed’s interest rate hike.

Silver
Silver was up 0.4 percent at $18.55 an ounce, breaching the range between $18 to $18.50. On technical front, it could found resistance at the 100-day moving average of $19.03 an ounce and support at the 50-day moving average of $18.46 an ounce. In near term, the spread between gold and silver sharply narrowed. But in the medium, gold will lead silver. Investors shall closely watch the short-covering by silver.

II. Commodities
Crude Oil
Oil prices settled more than 1 percent lower on Thursday as markets recovered from shock over U.S. President-elect Donald Trump's victory and focused on oversupply concerns, as well as whether OPEC will decide later this month to cut production. Most markets shook off post-election losses and bounced back on Thursday, but oil still faces a glut that has kept prices under pressure for much of the past two years. The Organization of the Petroleum Exporting Countries (OPEC) meets in Vienna on Nov. 30 for talks on output cuts. It has sought cooperation from non-members, including Russia, but doubts remain over whether they can come to an agreement. Brent crude settled down 54 cents, or 1.1 percent, at $45.84 a barrel. U.S. West Texas Intermediate crude ended 61 cents, or 1.4 percent, lower at $44.66.

Copper
Copper surged more than 5 percent to a 16-month high on Thursday as speculation that U.S. infrastructure spending could jump under a Republican administration unleashed a wave of interest in industrial metals. London Metal Exchange copper hit a peak of $5,714 a tonne on Thursday, its highest since July 2015, and closed up 3.5 percent at $5,601 a tonne, extending Wednesday's 3.4 percent rise. The metal has climbed more than 15 percent so far in November and is on track for its biggest monthly rise since March 2009, when the impact of China's 4 trillion yuan stimulus programme started to filter through. Copper had lagged other base metals earlier this year, rising just 3 percent this year to the end of September versus a 20 percent rise in nickel and a 44 percent surge in zinc. Analysts cautioned, however, that the metal was showing signs of becoming overstretched. Copper volumes on the London Metal Exchange reached their highest since January 2015 on Wednesday, with 332,638 lots traded. Sources said activity was mainly speculative.

Soybean
U.S. soybean futures rallied 1 percent on Thursday, rebounding on robust export demand from China and technical buying after the previous session's steep losses. Soybeans came off their session peaks after USDA in a weekly report said about 1 million tonnes of U.S. soybeans were sold for export in the week ended Nov. 3, below expectations for 1.7 million to 2 million. The USDA also reported private traders exported 126,000 metric tons of soybeans for delivery to China. But gains were capped by higher-than-expected harvest estimates by the USDA. Chicago Board of Trade January soybean futures settled 7 cents higher at $9.98 per bushel. The trading volume of the CBOT soybean, soymeal and soyoil was expected at 284,547 lots, 85,460 lots and 104,821 lots respectively.

Dealing Room, ICBC Beijing Branch
Cheng Yu

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