I. Precious Metals
Gold

Gold prices fell 1 percent on Thursday and broke below their recent trading range around $1,190-$1,210 an ounce after the U.S. dollar surged. The dollar index rose 0.7 percent to 94.875. As more interpretation came out for the Federal Reserve’s policy meeting, Fed Chair Jerome Powell send a new signal to the financial market that it’s employment, payroll and inflation shall be focused on, instead of the central bank’s tone or estimates.

The latest data said the Federal Reserve planned four more increases by the end of 2019 and another in 2020. The data confirms that the U.S. economy is not about to fall off a cliff amid hardening trade disputes, and that adds credence to the point that interest rates have to go higher, sparing more policy room for future economic crisis. U.S. rate rises tend to boost the dollar and hurt gold prices.

On chart, gold turned negative before hitting the 50-day moving average, suggesting extending consolidation. Investors shall follow the trend, awaiting prices toughing $1,170.

Silver

Silver fell 0.2 percent to $14.26, showing resilience compared with bullion and reversing previous course featured by sharper decline amid gold’s downside trend. In the near term, the white metal’s support remained intact. We maintain our view that stop-loss shall be set even the risk for bulls is limited.

II. Commodities
Crude Oil

Oil edged higher on Thursday, driven by the prospect of a shortfall in global supply once U.S. sanctions against major crude exporter Iran come into force in five weeks.

U.S. President Donald Trump this week demanded that the Organization of the Petroleum Exporting Countries raise production to prevent further price rises ahead of midterm elections in November for U.S. Congress members. But OPEC and Russia appear unlikely to immediately boost production as Trump has demanded as they want to keep prices at high. U.S Energy Secretary has ruled out using U.S. strategic crude reserves to lower oil prices.

The most-active December Brent crude futures contract settled up 59 cents at $81.38 a barrel, below the session high of $81.90 but still within sight of Tuesday's four-year high of $82.55. In the near term, oil prices are expected to remain high.

Copper

Copper and aluminium hit one week lows on Thursday, hurt by a stronger dollar. LME copper ended down 1.5 percent at $6,187 a tonne, having hit a low of $6,162.50. The metal has fallen for four consecutive days as investors close out positions ahead of a week-long holiday in China from Oct. 1. In the near term, the base metal is expected to remain weak amid China’s lackluster economy and escalating trade friction.

Soybean

U.S. soybean futures rose on Thursday, extending a rebound from recent losses into a third consecutive session on strong export demand and technical buying. Chicago Board of Trade November soybeans gained 5 cents to $8.55 a bushel.

We maintain our view that demand for soybean will be met by carryover against the background of rising trade war, if China’s demand did not fall sharply. Soybean prices slipped a near 10-year low last week, lifting demand for U.S. soybean. The trading volume of CBOT soybeans, soymeal and soyoil was expected at 101.197 lots, 115,931 lots and 147,647 lots.

Dealing Room, ICBC Beijing Branch
                        Cheng Yu