Gold has been pulled in two directions in recent weeks. On one side, rising oil prices and escalating geopolitical tensions have strengthened the metal’s safe-haven appeal.

Although recent conflicts in the Middle East have caused short-term volatility in gold prices, the medium- and long-term outlook remains positive as high geopolitical risks, increasing fiscal deficits, and continued buying by central banks will continue to support the price of the precious metal.

SMM April 29: Metals market: Overnight, domestic market base metals fell nearly across the board. SHFE copper fell 1.15%. SHFE aluminum fell 0.43%, SHFE lead rose 0.18%. SHFE zinc fell 0.4%. SHFE tin fell 0.52%. SHFE nickel rose 1.7%. In addition, the most-traded alumina futures fell 1.08%, and the most-traded casting aluminum futures fell 0.8%. Overnight, ferrous metals mostly fell. Iron ore fell 0.06%, stainless steel edged up slightly, rebar fell 0.28%, and hot-rolled coil fell 0.3%. Coking coal and coke: coking coal fell 0.59%, coke fell 0.44%. Overnight overseas market metals, LME base metals generally fell. LME copper fell 1.45%. LME aluminum fell 0.95%, LME lead fell 0.61%. LME zinc fell 1.05%. LME tin fell 0.68%. LME nickel rose 1.52%. Overnight precious metals : COMEX gold fell 1.79%, COMEX silver fell 2.59%. Overnight SHFE gold fell 1.31%, SHFE silver fell 2.35%. As of 7:07 AM on April 29, overnight closing prices: Macro front China: [China to Implement Zero Tariffs on All African Countries with Diplomatic Relations Starting May 1, 2026] The Tariff Commission of the State Council issued an announcement that from May 1, 2026 to April 30, 2028, zero tariffs would be implemented in the form of preferential tax rates for 20 African countries that have established diplomatic relations with China but are not classified as least developed countries. For tariff-quota products, only the in-quota tariff rates would be reduced to zero, while out-of-quota tariff rates would remain unchanged. During the 2-year implementation period, China will continue to promote the negotiation and signing of common development economic partnership agreements with relevant African countries. [MIIT: Next Step Will Be to Launch "AI + Software" Special Action] Ke Jixin, Vice Minister of MIIT, stated at a State Council routine policy briefing on the 28th that MIIT will next promote the extension of producer services toward specialization and the high-end of the value chain, and accelerate innovation and development in the software and information technology services industry. In particular, regarding AI empowerment of the information services industry, MIIT will launch an "AI + Software" special action, accelerate R&D and application of intelligent programming, and foster new business models such as Model-as-a-Service and Agent-as-a-Service. MIIT will further strengthen open-source ecosystem development and promote intelligent upgrades of basic software and industrial software. US dollar: Overnight, the US dollar index rose 0.14%, closing at 98.63. This week is most likely the last monetary policy meeting chaired by Powell, and rates are expected to remain unchanged. The market's focus was on the policy statement wording and Powell's characterization of war-induced energy inflation at the press conference. (Wall Street Jianzhi) Former US Fed Vice Chairman and economist Roger Ferguson stated, "In terms of the dual mandate, the Fed will say the labour market is roughly in a stable state right now. On the inflation mandate, there is still a lot of work to do (as inflation remains elevated at 3%)." He expected the Fed to say: "We will stay put for now and see how this all plays out." Similarly, Goldman Sachs economist David Mericle expected the post-meeting statement to acknowledge improved employment market conditions and rising inflation data, but maintain existing policy guidance unchanged. We expect a majority will still support keeping rates unchanged, with only one dissent, same as in March. According to CME "FedWatch": the probability of the US Fed holding rates unchanged in April was 100%. The probability of a cumulative 25 basis point interest rate cut by June was 2.6%, while the probability of holding rates unchanged was 97.4%. (Jin Shi Data) John Luke Tyner, head of fixed income at Aptus Capital Advisors, stated in a report that this week's Fed meeting would provide clues as to which officials lean toward reacting to energy-related inflation and which view it as transitory. He said the meeting's mild tone, with no dot plot and most likely no policy action, "paves the way for a heated June," when Kevin Warsh will likely chair the meeting. Tyner noted that June will bring a new dot plot and more time to assess the Middle East situation and its impact on the economy and inflation. (Jin Shi Data) Other currencies: Eurozone consumers' inflation expectations rose across the board in March, a worrying signal for the ECB as it assesses the ripple effects of the Iran conflict. According to the ECB's monthly consumer survey released Tuesday, prices over the next 12 months were expected to rise 4%, up from 2.5% in February. Three-year inflation expectations rose from 2.5% to 3.0%, slightly below the 3.1% peak reached during the last price surge in October 2022. Five-year inflation expectations edged up from 2.3% to 2.4%, drifting further from the ECB's 2% medium-term inflation target. The ECB is closely monitoring whether elevated energy costs will prompt workers to demand pay raises and lead enterprises to raise selling prices. Second-round inflation effects beyond commodities such as gasoline could trigger rate hikes, although Thursday's policy meeting is expected to keep rates unchanged. (Wall Street Insights) On the macro front: Data to be released today include Australia's March non-seasonally adjusted CPI YoY, Switzerland's April ZEW Investor Confidence Index, Eurozone April Industrial Confidence Index, Eurozone April Economic Sentiment Index, Germany's preliminary April CPI MoM, US March annualized total housing starts, US March durable goods orders MoM, US March total building permits, and the Bank of Canada interest rate decision as of April 29. Also noteworthy: the Bank of Canada will release its interest rate decision and monetary policy report; the US Senate Banking Committee will vote on advancing Waller's nomination as Fed Chairman, and if passed, the full Senate will hold a confirmation vote; Bank of Canada Governor Macklem and Senior Deputy Governor Rogers will hold a monetary policy press conference. Crude oil: Overnight, both oil futures extended their rally, with WTI up 3.37% and Brent up 2.74%. Trump stated on social media that Iran had requested the US to lift its naval blockade on the critical shipping route and reopen it as soon as possible. Reports indicated that Pakistani mediators expected Tehran to submit a revised proposal within days. However, Trump subsequently expressed dissatisfaction with Iran's latest peace proposal, citing that it would delay nuclear negotiations, significantly dampening market expectations for a near-term resolution of the conflict. Iran claimed it could "outlast Trump," suggesting the situation could fall into a prolonged stalemate. Wall Street Insights noted that the UAE announced its withdrawal from OPEC and OPEC+ effective May 1, and would gradually increase oil production. The announcement briefly caused oil prices to pull back before quickly recovering. (Wall Street Insights) On April 28 local time, the UAE announced its withdrawal from OPEC and OPEC+ effective May 1, 2026. UAE Energy Minister Suhail Al Mazrouei told media on April 28 that the UAE chose to exit OPEC at this time primarily considering factors such as current restrictions on passage through the Strait of Hormuz, and believed the decision would have limited impact on the global oil market. Al Mazrouei told CNN reporters that the UAE's announcement came at the "right time" and would not significantly affect the oil market or prices, as passage through the Strait of Hormuz was restricted, including for the UAE. This decision would help ease pressure on prices. (Jin10 Data) Ole Hansen, Head of Commodity Strategy at Saxo Bank, stated that in the short to medium term, given that global inventory has been depleted and reserves need to be rebuilt, the market should be able to absorb the increased production from the UAE. However, over time, this exit raised a broader strategic question: if other producing countries began to prioritize market share over quota discipline, OPEC's ability to manage an orderly market through coordinated supply adjustments could face increasing scrutiny. HSBC said in a research note on Tuesday that the UAE's exit from OPEC+ would have a relatively small short-term impact on the oil market, but over time could undermine the organization's supply discipline and price management capability. HSBC expected little change in global oil supply in the near term, as crude oil exports from the Gulf region had remained restricted since the end of February. During the period of constrained shipping routes, the UAE had limited room to increase production. The Abu Dhabi crude oil pipeline had a daily transport capacity of approximately 1.8 million barrels and was most likely already operating at full capacity. Once the Strait of Hormuz shipping lane resumed navigation, the UAE would no longer be bound by OPEC+ production quotas and could gradually increase production. The bank estimated that Abu Dhabi National Oil Company (ADNOC) daily production is expected to rise to over 4.5 million barrels, while the OPEC+ quota during May 2026 was approximately 3.4 million barrels per day. HSBC said any supply increments are expected to be released in phases over 12 to 18 months, rather than immediately.

Influenced by the Iran incident, gold prices gapped up at the opening of the Asian market yesterday (2nd), according to a report from HSBC Global Research. It is believed that rising oil prices pushed up gold prices, with the premium on the Shanghai Gold Exchange turning positive and reaching USD10 per ounce.

On Tuesday (June 17), the Bank of Japan (BOJ) stated in its latest monetary policy statement that it would maintain the policy interest rate at 0.5% and planned to slow down the pace of reducing bond purchases in the next fiscal year. In late May, Japanese government bond yields surged to record highs, driven by weak demand from investors for long-term Japanese government bond auctions and high volatility in the global bond market. On May 21, the yield on 30-year Japanese government bonds hit a historic high of 3.2%. At that time, traders noted that this not only reflected market concerns about the global economic outlook but also concerns about the impact of the BOJ's ongoing plan to reduce bond purchases. On Tuesday, the BOJ's Policy Board concluded a two-day meeting. During the meeting, policymakers unanimously voted to keep the short-term interest rate unchanged at 0.5% and to reduce bond purchases at a slower pace starting next year . It is evident that the key focus of this meeting was to adjust the pace. This outcome was also in line with market expectations. Prior to the meeting, Ryutaro Kono, Japan's chief economist at BNP Paribas, pointed out, "The instability in the bond market is not conducive to the implementation of monetary policy. To prudently balance the pace of balance sheet reduction, the BOJ is likely to slow down the pace of reducing bond purchases starting from next spring." Slowing down the pace of balance sheet reduction In March last year, the BOJ abolished its negative interest rate and yield curve control policies, and then decided in July of the same year to reduce the scale of bond purchases, which would continue until March 2026. Specifically, the BOJ will continue to reduce its monthly government bond purchase plan and decrease the scale of quarterly bond purchases by approximately 400 billion yen (approximately $2.8 billion) until March 2026. On Tuesday, the BOJ stated that it would not make any changes to the existing reduction plan . It is estimated that, as of the quarter ending June 2026, the BOJ's monthly bond purchases will amount to 4.1 trillion yen. However, according to the BOJ's plan for the next fiscal year, the bank indicated that it would slow down the reduction pace to 200 billion yen (approximately $1.4 billion) per quarter starting from April 2026 , with the goal of reaching a monthly purchase level of 2.1 trillion yen by March 2027. The BOJ explained that this move aims to "improve the functioning of the Japanese bond market in a manner that supports market stability." On Tuesday, BOJ Governor Kazuo Ueda held a press conference after the meeting, stating that the bank would appropriately reduce bond purchases in a predictable manner and would respond flexibly if yields rise significantly. Regarding the matter of interest rate hikes, Ueda noted that if the economic outlook aligns with expectations, the central bank will raise interest rates. Investment Bank Perspectives HSBC Global Research pointed out that a monthly bond purchase scale of 2 trillion yen represents a "natural" level, stating that this would be roughly equivalent to the amount of Japanese government bonds (JGBs) the Bank of Japan (BOJ) purchased monthly before introducing its ultra-loose monetary policy in April 2013. Benjamin Shatil, a senior economist at JPMorgan Chase in Tokyo, said, "As the BOJ moves further away from the market and begins to end the liquidity expansion that has lasted for over a decade, the bank is walking a fine line in trying to contain volatility." Shatil added that the BOJ's gradual exit from its ultra-loose monetary policy not only has implications for Japan but also for the global bond market. "The market's focus is increasingly shifting from the BOJ's policy rate normalization path to the pace of its balance sheet reduction," he said. Krishna Bhimavarapu, an Asia-Pacific economist at State Street Global Advisors, believes that the BOJ will not make any changes to its existing tapering plan before the first quarter of next year, marking a small victory for the BOJ "as the market does not seem to need immediate help to cope with the recent surge in long-term JGB yields." Following the BOJ's latest statement at noon, the Nikkei 225 index rose 0.55%, the yen strengthened 0.13% against the US dollar to 144.55, and the 10-year JGB yield climbed 3 basis points to 1.491%.

SMM News on June 9: Metal Market: As of the daytime close, domestic market base metals generally rose, with SHFE zinc leading the declines with a 1.79% drop. The % changes of the remaining metals were all within 1%. SHFE lead and SHFE nickel both rose by over 0.4%, with SHFE lead up 0.48% and SHFE nickel up 0.47%. The main alumina contract fell by 1.47%. In addition, the main lithium carbonate contract fell by 0.16%, the main silicon metal contract rose by 2.33%, and the main polysilicon contract fell by 2.24%. The main European container shipping contract fell by 2.55%. In the ferrous metals series, most prices fell, with iron ore down 0.71% and stainless steel down 0.47%. HRC and rebar both fluctuated slightly. In the coking coal and coke sector, coking coal rose by 0.13% and coke fell by 1.22%. In the overseas market, as of 15:05, overseas market base metals collectively rose except for LME zinc, which fell by 0.26%. LME copper, LME aluminum, and LME tin all rose by over 0.4%, with LME copper up 0.44%, LME aluminum up 0.43%, and LME tin up 0.44%. In the precious metals sector, as of 15:05, COMEX gold fell by 0.14%, while COMEX silver rose by 0.75%, hitting a high of $36.525 per ounce during the session, a new high since March 2012, and recording four consecutive days of gains. Domestically, SHFE gold fell by 1.02%, while SHFE silver rose by 1.77%, hitting a high of 8,912 yuan/kg during the session, a new all-time high since its listing. Market conditions as of 15:05 today 》Click to view SMM Market Dashboard Macro Front Domestic Aspects: [General Administration of Customs: China's Foreign Trade in Goods Grew 2.5% in the First Five Months, with Exports Up 6.3% YoY in May] The General Administration of Customs announced today (the 9th) that in the first five months of this year, China's total foreign trade in goods reached 17.94 trillion yuan, up 2.5% YoY, continuing the growth trend. In May, imports and exports totaled 3.81 trillion yuan, up 2.7%. In May alone, China's exports reached 2.28 trillion yuan, up 6.3%. Among them, exports to ASEAN, the EU, Africa, and the five Central Asian countries increased by 16.9%, 13.7%, 35.3%, and 8.8%, respectively. In the first five months of this year, China's exports of equipment manufacturing products reached 6.22 trillion yuan, up 9.2%, accounting for 58.3% of China's total exports. Among them, exports of EVs increased by 19%, construction machinery by 10.7%, ships by 18.9%, and industrial robots by 55.4%. In the first five months, China's equipment manufacturing products contributed 73% to the overall export growth, with the contribution rate reaching as high as 76.9% in May, providing strong support for the stable growth of foreign trade. 》Click to view details SMM has compiled data on the import and export of some products in the metal industry based on data released by the General Administration of Customs, as detailed below: 》Click to view detailed data [National Bureau of Statistics (NBS): CPI declined slightly in May, while the YoY increase in core CPI widened, and PPI fell 0.4% MoM] In May, the Consumer Price Index (CPI) fell 0.2% MoM and 0.1% YoY. Excluding food and energy prices, core CPI rose 0.6% YoY, with the increase widening by 0.1 percentage points from the previous month. The Producer Price Index (PPI) for industrial products fell 0.4% MoM, with the decline remaining the same as the previous month, and decreased 3.3% YoY, with the decline widening by 0.6 percentage points from the previous month. China is boosting consumption with greater intensity and more targeted measures, fostering the growth of new quality productive forces, improving the supply-demand relationship in some areas, and witnessing positive changes in prices. 》Click to view details ► On June 9, the central parity rate of the RMB exchange rate in the inter-bank foreign exchange market was 7.1855 RMB per US dollar. US dollar: As of 15:05, the US dollar index fell 0.28% to 98.94. The US added 139,000 non-farm payroll jobs in May, higher than the expected 126,000 but significantly lower than the previous 177,000, marking the lowest level since February this year. The US unemployment rate in May was 4.2%, in line with expectations and the previous reading. The year-on-year growth rate of average hourly earnings in the US in May was 3.9%, higher than the expected 3.7%, with the previous reading revised up to 3.9%. The market has scaled back its bets on interest rate cuts and now expects one in October. Meanwhile, US President Trump stated that he would soon announce his decision on the next Fed Chairman, adding that a "good Fed Chairman" would lower interest rates. The market expects the US Fed to keep interest rates unchanged at its June 17-18 meeting, with policymakers assessing how tariffs will impact the economy. According to the CME Group's FedWatch tool, federal funds rate futures traders currently expect a 61% probability of an interest rate cut by the Fed in September or earlier, compared to 74% on Thursday. Macro: Today, data such as the global leading indicator for the turning point of the industrial production cycle in May, the final value of the US wholesale inventory monthly rate in April, the 1-year inflation expectations of the New York Fed in the US in May, and the 3-year inflation expectations of the New York Fed in the US in May will be released. In addition, it is worth noting that, at the invitation of the UK government, He Lifeng, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, will visit the UK from June 8 to 13. During this period, the first meeting of the China-US economic and trade consultation mechanism will be held with the US side. Crude oil: As of 15:05, oil prices in both markets fell simultaneously, with US oil down 0.2% and Brent oil down 0.26%. Oil prices fell on Monday, but the decline was limited, and most of the gains from last week were retained. The prospect of a China-US trade agreement boosted the risk appetite of some investors and supported oil prices. Tim Evans of Evans Energy said in a report, "Over the past week, Brent crude oil rose to near the top of its recent trading range as equity market risk appetite increased amid easing tariff concerns, encouraging buying." The US non-farm payrolls report showed that the unemployment rate held steady in May, which seemed to increase the likelihood of a US Fed interest rate cut, further supporting the oil price rally last week. Data released on the website of the General Administration of Customs on June 9 showed that China's crude oil imports in May were 46.6 million mt, and cumulative imports from January to May were 229.615 million mt, up 0.3% YoY. After OPEC announced a significant production increase again in July on May 31, the prospect that the China-US trade agreement could support economic growth and increase oil demand outweighed concerns about increased OPEC supply. A research report released by HSBC on Friday stated that it is expected that OPEC+ will accelerate supply increases in August and September, which may increase the downside risk to the bank's forecast of a Brent crude oil price of $65 per barrel in Q4 2025. A research report by Capital Economics stated that it believes that this new accelerated production increase by OPEC+ will continue. ING analysts led by Warren Patterson said in a report that the WTI discount to Brent crude oil continued to narrow due to increased OPEC production, mild growth in US crude oil supply, and the possibility of decreased production next year. US energy services company Baker Hughes said in its closely watched report that the number of oil and natural gas rigs operated by US energy companies fell for the sixth consecutive week this week, the first time since September 2023 that the number of rigs has declined for six consecutive weeks. Data showed that as of the week ending June 6, the number of active US oil rigs fell by 9 to 442, while the number of natural gas rigs increased by 5 to 114. (Webstock Inc.) SMM Daily Review ► The market remained relatively stable at the beginning of the week, with spot prices temporarily steady [SMM EMM Daily Review] ► [SMM Hydrogen Cost Daily Review] 20250606