I. Precious Metals
Gold

Gold notched a quarterly gain of about 8.4 percent on Friday, marking its best quarter in a year. Spot gold was up 0.4 percent at $1,247.4 an ounce. The following elements posed impact on the performance of precious metals in the first quarter.

1.Uncertainty over U.S. President Donald Trump's economic policy. Investors worried the ability of President Trump to enact his economic policy since he pulled the U.S. out of the Trans-Pacific Partnership (TPP) and suffered a setback in health care reform, sending the dollar and gold to different path.

2.Uncertain political outlook in Europe. Britain's departure from the European Union and approaching French elections from April to May kept the market in check, despite some risks were relieved after the March election in Netherlands. The fate of French far right leader Marine Le Pen would dominate the performance of gold in the second quarter.

3.Tightening monetary policy by the Federal Reserve. The U.S central bank raised interest rates in Q1 as expected, sending signals for further tightening. A rising outlook for more hikes would keep gold prices under pressure.

Gold's performance this year will be decided by the aforementioned factors. Investors shall be wary about sharper volatility, especially in Q2 when the French elections were undergoing. Bullion prices are expected to fall sharply after the risk event is behind us. Any progress in political events shall be closely watched.

Silver

Silver tracked gold in Q1. Its industrial attribute posed its impact mainly in lagging its volatility. Investors shall be more patient in the trading. On technical front, silver found resistance around $18.5, which needs strong drivers to cross over, suggesting that it’s more likely to turn downward or remain consolidation.

II. Commodities
Crude Oil

Oil prices fell on Friday after a three-day rally ran out of steam as a higher U.S. rig count signaled rising production from shale, contributing to the global supply glut. Brent futures settled down 13 cents at $52.83 a barrel. The contracts have lost around 7 percent since the previous quarter, the largest quarterly losses since late 2015. U.S. crude futures settled up slightly, rising 25 cents to $50.60 a barrel after slipping below $50. They ended the quarter at about 5.7 percent lower, also the worst quarterly loss since late 2015.

Prices have been locked within a range during the first quarter, in line with current market environment. Crude prices had been surged by 20 percent after the Organization of the Petroleum Exporting Countries stroke a deal to cut production last November. But the gaining momentum was lost after U.S. rig count kept hitting records as prices went up, pushing up inventories. Higher prices are unlikely as market participants were shifting their focus to whether the OPEC would extend the output-cut deal in May. This event would decide the performance of oil market in Q2.

Copper

Copper fell on Friday as the end of a strike at Peru's biggest copper mine dampened fears of reduced supply that had driven the metal higher this quarter, though upbeat economic data from China lent support. London Metal Exchange copper closed down 2 percent at $5,837.50 a tonne, though prices still rose 5.6 percent in the first quarter, following a near 14 percent rise in the previous three months. Workers at Freeport-McMoRan Inc's Cerro Verde facility will resume work on Friday after voting to end a near three-week strike that had halved output, the union said late on Thursday. On technical front, prices are expected to further pull back if the metal fails to breach over the key resistance of $6,000.

Soybean

U.S. soybean futures fell to fresh five-month lows on Friday after federal crop forecasters said spring plantings and inventories of March 1 were well above traders' expectations. Most-active Chicago Board of Trade soybeans closed down 17 cents at $9.46 a bushel after earlier touching $9.44-1/4, their lowest price since August 4. The U.S. Department of Agriculture (USDA) estimated U.S. farmers will increase soybean plantings to 89.5 million acres, well above analysts’ forecasts of 88.20 million acres. Judging from fundamentals, investors shall be wary that soy prices still face downward risks.

Dealing Room, ICBC Beijing Branch
                          Qin Gang