I. Precious Metals
Gold
Gold rallied to a one-month high of $1,291.34 before closing up 1.1 percent at $1,290.92 on Tuesday. The outcome of the U.S. election sparked losses in stocks and the dollar, prompting investors to seek out precious metals as a haven from risk. The announcement of an FBI investigation into Hillary Clinton's use of a private email server during her time as Secretary of State helped send the VIX, the so-called fear index of market volatility, to its highest in seven weeks, fueling widespread risk aversion. Fresh opinion polls showed Democrat Clinton's lead over Republican Donald Trump has narrowed since early last week. But investors do not want to see a Trump win due to uncertainty over U.S. economic and foreign policy. The Trump risk, however, seems to be back in the market, which would likely boost gold. The two-day Federal Open Market Committee meeting began on Tuesday and will also be closely monitored for clues on the timing of a possible U.S. interest rate hike.
On chart, gold rallied at a larger pace compared with yesterday, and extended gains after holding above the 200-day moving average, seeing weak resistance at $1,280 and heavy pressure at the 100-day moving average. After rebounding to around $1,290, the 100-day moving average of $1,298 will be a key technical indicator. Technically, gold is expected to consolidate after hitting the resistance. Any breakthrough, which is unlikely, will send prices further higher to the range between $1,300 and the 50-day moving average of $1,315. Investors shall closely watch the movement after hitting $1,298.

Silver
Silver was up 2.9 percent at $18.38 an ounce, having peaked at $18.49, after breaking key resistance. On chart, the white metal was kept under the 100-day moving average on Tuesday and early Wednesday. Technically, silver remained steady after bouncing off highs, suggesting bullish sentiment. It continued to trade above Tuesday’s closing level this morning, showing that the 100-day moving average could hardly cap its upside. Silver, as a result, is quite likely to breach $18.5 and rise further to around $19.

II. Commodities
Crude Oil
Oil prices settled lower on Tuesday with Brent hitting a one-month low of $47.72 in anticipation of buildup in U.S. crude inventory. The American Petroleum Institute (API) and the Energy Information Administration (EIA) will release its crude stockpile report on Tuesday and Wednesday respectively. Analysts polled had forecast a build of 1 million barrels, the first rise in the past eight weeks. Concerns over the OPEC members’ ability to cut production also weighed on oil prices. Brent crude settled down 1 percent at $48.14. U.S. West Texas Intermediate (WTI) crude settled down 0.4 percent at $46.67. During the session, it fell as low as $46.20, its lowest in a month.
Oil started a wave of rally after touching the trough of $27 in the downturn since the second quarter of 2014. On chart, oil had breached its downward path and stuck around the upper end of the path. A successful breakthrough would launch a gradual recovery. Its movement between $43 to $48 shall be closely watched.

Copper
Copper extended gains to the sixth consecutive day, up 1 percent at $4,906.50 a tonne. It rose to its one-month high at $4,920, supported by an improved demand outlook in China. On chart, the metal is diverging from $4,800 where the moving averages cluster as it rises, with pressure of pullback mounting. Investors shall closely watch the resistance at $5,000, a M-shape resistance formed in March and April.

Soybean
Chicago Board of Trade soybean futures fell for the third consecutive day on Tuesday on expectations the U.S. Department of Agriculture might raise its forecast of the U.S. soybean yield in a monthly report next week, traders said. Benchmark CBOT January soybeans settled down 18-1/2 cents at $9.93-1/4 per bushel, breaching below the 100-day moving average of $10.10. The USDA said the U.S. soybean harvest was 87 percent complete, ahead of the five-year average of 85 percent. Soymeal also fell for three straight days, tracking soybeans. CBOT December soymeal closed down $6.6 at $309.5 a tonne. December soyoil settled down 0.32 cents at $34.85 cents. The trading volume of the CBOT soybean, soymeal and soyoil was expected at 169,550 lots, 99,630  lots and 128,521 lots respectively.

Dealing Room, ICBC Beijing Branch
Lv Yan

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