I. Precious Metals
Gold
Gold prices turned lower on Tuesday as the dollar and global equity markets firmed with investors growing more convinced that Democratic candidate Hillary Clinton could win the U.S. presidential election. At the end of a bruising political campaign, the Reuters/Ipsos States of the Nation poll gave Clinton a 90 percent chance of defeating Republican Donald Trump and said she was on track to win 303 Electoral College votes, more than the 270 needed, with Trump likely to get 235. If there is any consistency between how the gold market is trading and what polls are saying, the gold market is leaning towards Clinton winning, which means that a downward move will likely be less significant than an upward move in the case of a Trump victory. A win by Trump, a businessman who has never held public office, would create more uncertainty in the market and that could raise gold's appeal as a hedge against risk. On the technical front, support can still be found around the 200-day moving average of $1,270 an ounce. We maintain our bearish view on gold. But its losses will be limited.

Silver
Silver remained rangebound within the range between $18 to $18.50. The U.S. presidential election will dominate the market in near term. Under current circumstances, financial market is expected to remain stable as Clinton is more likely to win in the election, boosting risk appetite and supporting the white metal. Investors are recommended to short silver if the spread between gold and silver narrowed down.

II. Commodities
Crude Oil
Oil prices ended little changed on Tuesday as the market waited to find out who voters elected to be the next president of the United States. Most investors believe a Clinton victory would result in greater certainty and stability in financial markets. Brent futures lost 11 cents, or 0.2 percent, to settle at $46.04 a barrel, while U.S. crude rose 9 cents, or 0.2 percent, to settle at $44.98 per barrel. Brent crude's premium to U.S. futures declined to its lowest level in almost five months on Tuesday as the global benchmark weakened relative to the U.S. West Texas Intermediate (WTI) contract due in part to projections of record OPEC output. On Wednesday, the U.S. Energy Information Administration (EIA) will release its weekly petroleum status report. We maintain our view that oil prices are expected to trade around $48 this week.

Copper
Copper prices hit one-year highs on Tuesday as expectations of stronger demand in top consumer China and optimism that Democrat Hillary Clinton will win the U.S. presidential election boosted sentiment and spurred buying. Clinton, who has a 90 percent chance of winning according to the final Reuters/Ipsos States of the Nation project, is viewed as a status quo candidate with more predictable policies than Republican Donald Trump. Benchmark copper on the London Metal Exchange ended up 2.7 percent at $5,235.50 a tonne. Earlier it hit $5,248.50, its highest since Oct. 23, 2015, as funds jumped on the uptrend after a break of key resistance around $5,150. Copper has gained more than 10 percent since Oct. 21. Investors shall closely watch price decline due to profit-taking.

Soybean
U.S. soybean futures extended gains for the fourth consecutive day Tuesday on technical buying and position adjustment ahead of the supply-demand report of the U.S. Department of Agriculture. At the Chicago Board of Trade, the January soybean contract settled up 12-3/4 cents at $10.11-1/4 a bushel after reaching $10.20-3/4, its highest since Oct. 28. Technical buying for soybean futures accelerated after January soybean breached above the resistance of the 100-day moving average of $10.02-1/2. CBOT soy and soyoil were lifted by a rally in Dalian soyoil DBYF7 and Malaysia palm oil future IFCPOF7. The USDA is expected to raise its estimate of U.S. soy harvest and carryover inventories in its monthly supply-demand report due Wednesday.

Dealing Room, ICBC Beijing Branch
Cheng Yu

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