I. Precious Metals
Gold
Gold slipped on Monday as the U.S. dollar strengthened. Spot gold lost 0.3 percent at $1,319.27 per ounce.

Bullion rebounded last week as the dollar sagged after U.S. April inflation data fell short of expectations. But the dollar’s correction could be temporary as the CPI data was still resilient. No turning point will show up in the near term.

Further bullion support could come from rising security risks in the Middle East after the United States said it would withdraw from the 2015 international nuclear deal with Iran and reimpose sanctions. But market was muted, failing to offer strong support to gold.

Holdings of gold at world’s largest exchange traded funds declined last week, weighing on gold prices. Retail report due tonight will impose an impact on the dollar index as well as gold. We hold a bearish view on bullion, and suggest short on highs.

Silver

Silver was down 0.7 percent at $16.51 per ounce, moving in tandem with gold. The resistance at $16.8 was strong. Market bears are suggested to build short positions at this level before squaring at $16.2-16.3.

II. Commodities
Crude Oil

Oil prices rose on Monday as OPEC reported that the global oil glut has been virtually eliminated, while U.S. crude's discount to global benchmark Brent widened to more than $7, its deepest in five months.

Global benchmark Brent gained $1.11 to settle at $78.23 a barrel. West Texas Intermediate crude rose 26 cents to settle at $70.96.

The absolute plunge in Venezuelan production on top of high inflation and high cut by the OPEC countries highlights tenuous supply-and-demand balance. U.S. sanctions against Tehran also contributed to oil’s gains in geopolitical terms.

U.S. shale production is expected to hit a record 7.18 million barrels per day (bpd), the Energy Information Administration said. But oil prices are expected to remain at an almost 3-1/2-year high fueled by mounting bullish sentiment. The key mark of $80 is within sight.

On trading strategy, chasing high is not recommended as correction can be expected at any moment, although a rally is expected in the short term. Instead, investors shall stay on the sidelines, awaiting Iran’s discussion with Europe on nuclear issues.

Copper

LME copper shed 0.8 percent to finish at $6,885 a tonne after headline stocks in LME warehouses rose 8,900 tonnes to 289,975 tonnes. Copper prices have moved sideways after breaching up $7,200 at the end of last year. Investors are recommended to short copper on highs on bearish signs ahead.

Soybean

Chicago Board of Trade July soybean futures closed up 14-1/2 cents at $10.17-3/4 a bushel, breaching above the 200-day moving average, on signs of rising demand.

Investors shall focus on the trade talks between U.S. and China that are set to resume this week. U.S. President Donald Trump pledged on Sunday to help Chinese Technology company ZTE Corp, raising the prospect for easing tension between the two countries and boosting soybean prices in the near term.

Dealing Room, ICBC Beijing Branch
                        Qin Gang