I. Precious Metals
Gold

Gold on Monday held close to 5-1/2-month lows, with a strong dollar offsetting the upward influence of an escalating trade dispute between the United States and China. Spot gold prices were hemmed in a tight trading range after Friday's selloff because of competing pressure and support on Monday, forcing investors to reassess their positions.

Spot gold was flat at $1,278.18 an ounce by 1:33 p.m. EDT (1733 GMT), while U.S. gold futures for August delivery settled up $1.60, or 0.1 percent, at $1,280.10 per ounce. Gold prices remained locked just below $1,280 an ounce pressured by a firmer dollar. Gold plunged 1.8 percent on Friday, its biggest one-day fall since November 2016, despite Washington deciding to enact tariffs on $50 billion in Chinese goods.

On chart, gold is approaching previous support at $1,277, suggesting a short-lived technical correction after recent sharp decline. But the downward tendency seems to remain intact. The loss of the support could pull bullion to as low as $1,240.

Silver

Silver lost 0.4 percent at $16.45 an ounce after falling 3.6 percent on Friday. Silver sunk to $16.39, its lowest in almost two weeks, paring gains since early June. After crossing below the 50-day, 100-day and 200-day moving average successively, silver came back to around $16.50 and is expected to consolidate around this level.

On chart, silver sees further downward room. But if gold suffers no sharp losses, the white metal is likely to find strong support at $16.20, a level that holds well since February.

II. Commodities
Crude Oil

Oil prices rose on Monday in volatile trade as market participants lowered their expectations for how much OPEC might increase production and investors assessed the impact of a trade dispute between the United States and China.

U.S. crude oil rose 79 cents a barrel to settle at $65.85. The contract traded at a two-month low of $63.59 early in the session. Brent crude jumped $1.90 to $75.34 a barrel. U.S. crude's discount to Brent widened to as much as $9.75 a barrel, after narrowing on Friday.

China imposed import duties on U.S. products on Friday, and suggested that crude oil tariffs were planned. That could leave growing volumes of U.S. crude from shale without a buyer, traders said. While the volumes would ultimately get shipped elsewhere, absent China the price could be depressed, traders said.

Russia and Saudi Arabia have put forward a proposal to increase production from OPEC and non-OPEC countries by 1.5 million barrels per day, Ecuador's oil minister said on Monday. But OPEC's second- and third-largest producers, Iraq and Iran, have said they would oppose steep output increases as it would breach previous agreements to keep production cuts in place until the end of the year.

The contracts are expected to move in tandem overall. Divergence is likely in the near term, with U.S. crude bulls facing more resistance.

Copper

Copper eased for a third session on Monday on fears trade tensions between the world's two largest economies could escalate and demand from China could cool after last week's lacklustre data.

Benchmark copper on the London Metal Exchange ended 0.8 percent lower at $6,964 per tonne, amid thin trade due to a Chinese holiday. The industrial metal earlier touched its weakest since June 1 at $6,886.75.

If sentiment worsens further then this will weigh further on metals prices. Metals could be affected directly if it comes to tariffs on automobiles and automobile parts.

Soybean
U.S. soybean futures rose on Monday after dipping to the lowest since 2016 during the session, as an escalating trade dispute between the United States and China dampened commodities. July soybeans ended up 3 cents at $9.08-1/2 a bushel, after falling to $8.97-1/4, the lowest spot price on a continuous chart since March 2016.

U.S. President Donald Trump last week announced hefty tariffs on $50 billion in Chinese imports, and China hit back. A trade war between the world’s largest two economies is about to start. 

The USDA said in a monthly report that U.S. exported 818,396 tonnes of soybeans last week, higher than the market consensus of 350,000 to 650,000 tonnes.

Dealing Room, ICBC Beijing Branch
                        Li Nan