I. Precious Metals
Gold

Gold prices hovered near four-month highs on Wednesday as the U.S. dollar slipped against a basket of currencies. In see-saw trading, the dollar had risen early against the euro as the single currency backed away from a three-year high. But the greenback later slipped.

Spot gold was flat, last up 0.1 percent at $1,339.44 an ounce by 1858 GMT. It remained close to Monday's peak of $1,344.44, its highest since Sept. 8. "The euro is driving the dollar, which is then driving the gold now," said Michael Matousek, head trader at U.S. Global Investors in San Antonio. The price of gold has risen by 8 percent since mid-December, lifted as the dollar weakened to a three-year low against a basket of major currencies.

"For the moment it looks like gold appears intent on challenging the 2017 highs around $1,357," said Daniel Ghali, commodities strategist at TD Securities in Toronto. Longer-term, gold will be supported by risk that global share prices could fall from record highs and strong growth around the world could stoke inflation.

Concerns regarding (share price) overvaluations and the possibility of rising inflation have reignited interest in gold. Funds' bets on higher gold prices have surged, with their net long positions rising to almost 200,000 contracts from fewer than 80,000 in mid-December.

"The past three weeks have seen the fastest rise in speculative positioning in gold on record," Standard Chartered analysts said. But the net long was still only 36 percent of total open positions and could rise further, which would help to drive prices higher, they added.

Silver

Silver dipped 0.1 percent at $17.17 an ounce. Spot silver surged 1.4 percent to $17.20 last Friday. For the week, it slipped 0.1 percent, on track to post the first weekly loss in five weeks.

On weekly chart, silver diverged from gold under heavier correction pressure, and failed to cross over the resistance of upper band to form an upward path. The divergence, however, is expected to corrected in near term, as silver will move in line with gold eventually. The resistance can still be found at around the 100-day and 200-day moving average.

II. Commodities
Crude Oil

Oil prices ended higher on Wednesday ahead of the release of U.S. government data that was expected to show a ninth straight weekly drawdown in crude inventories.

Brent futures settled 23 cents higher at $69.38 a barrel while U.S. West Texas Intermediate (WTI) crude gained 24 cents to $63.97 per barrel. Both contracts climbed to their highest levels since December 2014 this week with Brent reaching $70.37 on Monday and WTI up to $64.89 on Tuesday.

U.S. crude inventories were estimated to have fallen 3.5 million barrels in the week ended Jan. 12, according to a Reuters poll. The API and EIA will will post its data on 2130 GMT and Thursday successively, both a day later due to the Martin Luther King Jr. Day.

Tighter markets have lifted both crude benchmarks about 13 percent above levels in early December, helped by production curbs by OPEC and Russia, as well as by healthy demand growth. Several analysts this week raised their expectations for 2018 prices on the back of the rally.

In a note on Tuesday, Morgan Stanley said it now sees Brent hitting $75 a barrel by the third quarter of 2018, while U.S. crude could hit $70 a barrel. The firm expected flows from hedge funds to keep prices elevated - even though it saw prices retreating later in the year.

Money managers have raised bullish positions in WTI and Brent crude futures and options to a record, according to the U.S. Commodity Futures Trading Commission and the Intercontinental Exchange. Markets may come under pressure from rising U.S. production, analysts say.

On Tuesday, the EIA said it expected U.S. oil output to increase in February, with production from shale rising by 111,000 barrels per day (bpd) to 6.55 million bpd. U.S. crude output is expected to soon break 10 million bpd, challenging top producers Russia and Saudi Arabia.

Copper

Copper resumed its decline on Wednesday as some speculators took profits from a December rally and others went short after prices broke below technical levels. Copper surged 12 percent during its December rally and has since eased back by about 3 percent.

"That was a pretty rapid rise in December and we seemed to have traded ahead of the fundamentals, so there was always the risk of profit-taking, given the net speculative positioning was elevated," said Robin Bhar, head of metals research at Societe Generale in London. Bhar added that once prices broke technical support levels that triggered more selling, though he said he viewed any further falls as a buying opportunity.

There is uncertainty about supply in the market because of Chinese import restrictions on copper scrap and labour contract talks at several mines, including the huge Escondida mine, Bhar said.

Benchmark copper on the London Metal Exchange closed 0.6 percent down at $7,034 a tonne, having fallen by 1.8 percent on Tuesday. Futures brokerage Gelin Dahua has cut its long position on the Shanghai Futures Exchange (ShFE) April copper contract by 75 percent over the past two days, according to Reuters calculations based on ShFE data.

Soybean

Chicago soybean futures closed higher on Wednesday, reversing the losing course later in the session, on short covering and spillover effect of stronger corn and wheat. CBOT March soybean contracts rose 3/4 cents to $9.68-3/4 a bushel, posting gains three days in a row.

But gains were limited on ample output in Brazil, despite wet weather in the largest soybean exporter could stall its soybean harvest. Rain in Argentina, the world’s third largest soybean exporter, largest soyoil and soymeal supplier, was fewer than expected, providing a floor to futures prices.

Soymeal rose, whole soyoil fell. CBOT March soymeal ended up $1.5 to $324.3 per short tonne. March soyoil fell 0.28 cents to 32.51 per pound. The trading volume of soybean, soymeal and soyoil is expected at 149,005 lots, 75,338 lots, and 110,952 lots respectively.

Dealing Room, ICBC Beijing Branch
                        Lv Yan