I. Precious Metals
Gold
Gold prices rose on Monday after falling for three weeks, as the dollar and long-dated U.S. Treasury bond yields retreated from recent highs. The metal has been kept under pressure, as the dollar and bond yields benefited from heightened expectations of enlarged fiscal spending by U.S. President-elect Donald Trump. But reignited concerns over the bearish prospect of oil prices may make a dent in the recovering inflation and the Federal Reserve’s interest rate hike progress. The dollar index was down 0.2 percent against a basket of six major currencies, consolidating at highs for the third consecutive day. On technical front, the dollar was under pressure to pull back after a three-week rally, shifting investors’ attention from the dollar assets at highs to gold at lows. Traders also said a directive from the People's Bank of China to limit gold imports was creating concerns about supply in the top consumer of the metal and kept premiums in Shanghai around $22. Gold premiums in China jumped to the highest in nearly three years last week on supply worries.
On chart, spot gold was up 0.82 percent at $1,193.99 an ounce, after climbing as high as $1,198.09. It still remained below the key integral mark. On the daily chart, the 500-day moving average moved rapidly down after breaching below the 200-day moving average. The lower end of the Bollinger path expanded further down, indicating ample downward potentials. In near term, the MACD index bottomed up, pointing to some recovery momentum. In short, gold is expected to rebound back to $1,210 before resuming declines to $1,150 in mid-December.

Silver
Silver rose 0.5 percent at $16.58 an ounce on Monday, tracking gold’s rebounding trajectory. On the daily chart, the MACD rebounded sharply, approaching the axis zero, while the K-chart returned below the 20-day moving average with the aforementioned technical support, showing increasing likelihood for a breakthrough. However, the 50-day moving average is about to breach below the 200-day moving average, pointing to a downward trend in the medium term. The white metal is expected to find resistance at $17.10 and below $16 in the near and medium term.

II. Commodities
Crude Oil
Oil prices gained more than 2 percent on Monday in volatile trading after falling as much as 2 percent, recouping losses as the market reacted to the shaky prospect of major producers being able to agree output cuts at a meeting on Wednesday. U.S. West Texas Intermediate crude futures settled up 2.21 percent at $47.08 a barrel. Brent crude rose 2.12 percent, to $48.24 a barrel. OPEC's Wednesday meeting will offer the market a definitive answer as to whether OPEC and non-OPEC producers can agree on cuts. On Sunday, Saudi Arabian Energy Minister Khalid al-Falih said the oil market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified. The statement stoked simmering disagreement between OPEC and non-OPEC crude exporters such as Russia over who should cut production by how much. Oil prices are expected to fall sharply if no agreement could be reached on Wednesday with both contracts back to the range between $40-$45.

Copper
Copper rose nearly 3 percent to a high of $6,045.50, its highest in just over a year. December's holiday slowdown period could soon put a cap on copper, which is heading for its biggest monthly gain in more than a decade in November. Technical indicators support the trend and add to technical pressure. But fundamentals still provide a floor to copper prices. China has approved a 247-billion-yuan ($36-billion) railway plan to improve transport links. China's real estate investment growth quickened in October to its highest since April 2014. The stepped up measures in infrastructure and real estate investment spurred large buying bets.

Soybean
U.S. soybean futures rose for the seventh day in a row on Monday, led higher by strong export demand and gains in the soymeal market. Soymeal futures rose 1.5 percent, lifted by technical buying, and swap trading of longing soymeal and shorting soyoil. Soyoil futures closed down in a steadied trading after hitting a 2-1/2 high. Chicago Board of Trade December soymeal futures breached above the 100-day and 200-day moving average. The most active soymeal futures hit the peak since August 24. CBOT soybean futures for January delivery closed up 10 cents at $10.56 a bushel. Soyoil for January delivery was up 0.03 cents to 36.97 cents. The trading volume of the CBOT soybean, soymeal and soyoil was expected at 293,474 lots, 143,475 lots and 202,692 lots respectively.

Dealing Room, ICBC Beijing Branch
Lv Yan

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