Home > News Updates > Financial News > ICBC Daily Comment
ICBC Trading Strategies of Precious Metals and Commodities Market-September 25, 2017
 

I. Precious Metals
Gold
Gold edged up from the previous day's four-week low on Friday as the dollar fell and investors sought a safe haven from geopolitical uncertainty caused by rising tensions between North Korea and the United States.
North Korea said on Friday it might test a hydrogen bomb in the Pacific Ocean after Trump threatened to destroy the country, with leader Kim Jong Un promising to make a "mentally deranged" Trump pay dearly for his threats.
The Japanese yen and Swiss franc gained, while U.S. stocks and the greenback were down. Spot gold was poised to finish the week down 1.5 percent, the largest such decline since early July.
The Fed earlier this week signaled it was still on track to raise interest rates by year-end. Tighter monetary policy raises the opportunity cost of holding non-yielding bullion. The dollar had risen to a two-month peak following the Fed's comments.
On technical front, spot gold was up 0.36 percent at $1,295.71 per ounce, having hit a four-week low of $1,287.61 on Thursday. Prices hovered near support at the 50-day moving average at around $1,288.
The key support at the 100-day moving average of $1,267 will provide a floor to gold prices. The resistance can be found at $1,300 and $1,320. Crossing over $1,300 will ease the downward pressure, while regaining the ground of $1,320 will push bullion back to the upward momentum formed at the beginning of the year.

Silver
Spot silver steadied at 16.95 an ounce, supported by the 100-day moving average. The 20-day moving average is further pushed down to $17.36, approaching the 200-day moving average. Silver prices are quite likely to breach below the 100-day moving average of $16.85.

II. Commodities
Crude Oil
Oil prices ended nearly 1 percent higher on Friday, close to their highest levels in months, as major producers meeting in Vienna said they may wait until January before deciding whether to extend output curbs beyond the first quarter.
"I believe that January is the earliest date when we can actually, credibly speak about the state of the market," Russian Energy Minister Alexander Novak said after the Organization of the Petroleum Exporting Countries and other major producers finished meeting. Other ministers said a decision on extending cuts could be taken in November when OPEC holds its next formal meeting. Nigeria's oil minister said in Vienna that his country, which OPEC had exempted from the output cuts, was actually pumping less crude than its agreed cap.
Brent crude rose 43 cents, or 0.8 percent, to settle at $56.86. U.S. West Texas Intermediate (WTI) crude settled at $50.66 a barrel, up 11 cents or 0.2 percent, within a few cents of its May peak.
Rising U.S. output has somewhat offset OPEC-led production cuts. The U.S. government reported that crude production rose to 9.51 million bpd last week, resuming output close to levels before Hurricane Harvey hit the Gulf Coast in late August. Baker Hughes, the US oil services company, reported a drop of 5 in the US oil rig counts last week, marking a current total of 744, marking the third straight week of cut and on track for a second month of losses in a row and its biggest monthly decline since May 2016. During the session, the discount of WTI to Brent futures hit its widest since August, 2015 as U.S. crude was pressured by hurricane damage to U.S. Refineries.

Copper
LME copper prices rebounded on Friday, but extended recent weakness as it is expected to test the support of $6,358. On technical front, a break below could cause a loss to the next support of $6,287. These supports are provided by Fibonacci projection levels of a downward wave that started from the peak of $6,774 from September 11. Data showed that the downward trend could extend to range between the 161.8 percent and the 138.2 percent Fibonacci projection levels after crossing below the 100 percent Fibonacci projection level. For copper, the range could be $6,287-$6,358. A rebound, if any, could be capped by $6,452.

Soybean
U.S. soybean futures rose on Friday to a six-week high, with the November contract pushing through resistance at its 200-day moving average. Chicago Board of Trade November soybeans settled up 13-1/2 cents at $9.84-1/4 per bushel after reaching $9.87, the contract's highest since Aug. 10. CBOT December soymeal ended up $6.10 at $319 per short ton. CBOT December soyoil ended down 0.12 cent at 34.22 cents per pound, pressured by technical trade against soymeal. The market got a boost from the U.S. Department of Agriculture confirming that private exporters sold 190,000 tonnes of U.S. soybeans to Mexico. The trading volume of CBOT soybean futures, soymeal and soyoil was expected at 226,730 lots, 113,666 lots and 121,835 lots respectively.

Dealing Room, ICBC Beijing Branch
Lv Yan


(2017-09-25)
Close