I. Precious Metals
Gold
Gold dipped 0.5 percent at $1,245.41 an ounce on Thursday as the dollar strengthened, but losses were capped by continuing economic uncertainty around Britain's departure from the European Union and approaching French elections. The potential for the rise of the far right in European elections this year, along with British Prime Minister Theresa May formally triggering divorce proceedings from the EU on Wednesday has served to enhance gold's appeal as a safe-haven investment, negating some of the effects of a strong dollar. The impact of Britain’s divorce from the EU may be limited in near term. So is Scotland’s independence referendum that will not take place until 2018 or 2019. We might see support from the French elections if the first round surprises us by the results being better than expected for (far right leader) Marine Le Pen. Unlike Netherlands, populism forces were far more stronger in France. Several U.S. policymakers said the U.S central bank would keep tightening monetary policy in the rest of this year. The dollar index rose from a four-month low to hold above 100 this week. Boosted by increasing consumer spending, U.S. gross domestic product increased at a 2.1 percent annualized rate instead of the previously reported 1.9 percent pace, reflecting a steady growth path for the world's largest economy, and supporting policymakers’ expectations on interest rates hike. Gold is expected to remain rangebound at highs between $1,220 and $1,260.

Silver
Silver fell 0.2 percent to $18.16 an ounce after hitting a four-week high of $18.29. Tracking gold, silver remained at highs. Traders were looking at the result of French election to see whether it could breach above the resistance of $18.5. The U.S. Policymakers’ comments and solid U.S. economy are expected to weigh on precious metals. Uncertainty over President Trump’s economic policy weakened the dollar. But with strong support at 99.2 and bright prospect on U.S. economy, the dollar index is expected to remain solid in near term. We maintain our bullish view on the U.S. currency in the long run. On technical front, silver is expected to turn downward or go sideways in near term, pressured by the resistance of $18.5.

II. Commodities
Crude Oil
Oil prices jumped for a third day on Thursday to their highest in three weeks after Kuwait backed an extension of OPEC production cuts to reduce a global glut. Brent crude oil settled up 54 cents, or about 1 percent, to $52.96 a barrel after hitting $53.10. U.S. crude settled up 84 cents, or 1.7 percent, higher at $50.35 a barrel, after touching $50.47. Market participants turned their focus to whether the OPEC would extend the output-cut deal. Judging from the open speeches by the OPEC producers, the odds were high. But investors shall still be cautious about the communication between the OPEC and non-OPEC countries. Surprise may happen if the compliance by non-OPEC countries subdue. Oil prices are expected to remain rangebound in near term as the OPEC will not discuss the issue soon.

Copper
London Metal Exchange copper hit a four-week peak as speculators resumed buying ahead of fresh economic data from top metals consumer China. Three-month copper ended up 0.8 percent at $5,955 a tonne after touching $5,985, the highest since March 2. Most Chinese economic data in January and February were strong, but the Lunar New Year celebrations may have distorted some of the numbers. The March data is going to be the first 2017 data we can take at face value. Investors were waiting for Chinese manufacturing and PMI data due on Friday and Saturday.

Soybean
U.S. soybean futures fell to a five-month low on Thursday dampened by record harvest in Brazil. Chicago Board of Trade May soybean futures finished down at $9.61 per bushel, the lowest since October 13. Brazil's 2016-17 soybean crop forecast was raised to a record 113.3 million tonnes on Thursday compared to 111 million tonnes seen earlier in March. Traders were awaiting U.S. Department of Agriculture data that was expected to show a jump in planting. Investors shall be wary about further decline.

Dealing Room, ICBC Beijing Branch
Qin Gang