I. Precious Metals
Gold

Spot gold was down 0.4 percent at $1,241.87 per ounce, falling sharply for two weeks in a row as the Fed is expected to lift rates at its two-day policy meeting ending on Wednesday. Investors sold off bullion as market participants worried about rising risk appetite triggered by U.S. tax overhaul would drain funds from safe-haven products. Recent high-risk geopolitical tensions failed to provide a floor to prices, fueling panic sentiment.

We believe that the downward momentum is not sustainable, while following recovery can hardly be slow. First, the turnover in U.S. stock market kept falling as investors were overreacting to the hypothesis that tax overhaul attracted most capital. Second, technical factors did not support a further downpath as $1,200 provide a solid support that can hardly be breached below. Gold is quite likely to steady and reverse the course after it reaches the Fibonacci support and an interest rate hike from the U.S. was fully priced in.

Silver

Silver was down 0.5 percent at $15.71, posing a free fall in the past two weeks. Extending a downpath on chart in tandem to that of in September, the white metal reached a key support with no further downward momentum, suggesting a good entry point for bargain hunting. Compared with bullion, silver’s losses were relatively limited, keeping an arm’s strength from previous lows. That means that silver may have hit bottom.

II. Commodities
Crude Oil

Brent crude futures settled up $1.29, or about 2 percent, at $64.69 a barrel. U.S. West Texas Intermediate (WTI) crude futures settled at $57.99 a barrel, 63 cents or 1 percent above their last settlement. 

The difference between the two benchmarks was the greatest since late October, as Brent rallied after the shutdown of the pipeline that carries the biggest of the five North Sea crude oil streams that underpin the benchmark. The pipeline transports a significant portion of North Sea crude oil output, and it may take weeks before the issue is resolved.

Copper

Copper prices gained for a fourth straight session on Monday, supported by a weaker dollar and data from top consumer China that indicated higher demand. The benchmark copper price on the London Metal Exchange rose 1.5 percent, its highest intraday jump in nearly two months, to close at $6,670 a tonne. Despite of a four-day rally, the weak momentum extended.

Soybean

U.S. soybeans settled lower for a fourth consecutive day on Monday as forecasts called for beneficial grains in Argentina. CBOT January soybean futures settled 7-1/4 cents lower at $9.82-1/2 a bushel. January soymeals were down $4 at $327.7 per short tonne. December soyoil ended down 0.16 cent at 33.46 cents per pound.

Dealing Room, ICBC Beijing Branch
                        Zhao Yifei