July 20, 2026 Since the spring of 2026, something unusual has been unfolding in the gold market. Countries that had been among the world's largest buyers of gold for years have suddenly begun selling their reserves. These sales are taking place quietly. They are not announced publicly, and the transactions only appear in central bank data weeks or even months later. Those who look closely quickly realize that these are not routine portfolio adjustments. Instead, something far more significant is happening right before our eyes, largely unnoticed. What we are witnessing is a silent emergency response to an economic shock that is placing enormous strain on the global financial system: the closure of the Strait of Hormuz as a consequence of the Iran war. The logic becomes clear once the underlying mechanism is understood. Roughly 20% of the world's oil passes through the Strait of Hormuz. If that route is blocked, oil prices rise sharply, forcing oil-importing countries to obtain additional U.S. dollars to pay their energy bills. For a central bank, the fastest way to raise those dollars is by selling its most liquid dollar-denominated assets—typically U.S. Treasury securities. However, once those holdings have been largely exhausted and additional dollars are still required, gold often becomes the only remaining dollar-convertible reserve asset. Turkey Illustrates the Entire Drama No country demonstrates this process more clearly than Turkey. In March 2026, following the U.S. and Israeli military strikes against Iran that began in late February, the Turkish central bank reduced its holdings of U.S. Treasuries from US$15.7 billion to US$1.8 billion —a reduction of nearly 90% in just one month . Once that buffer had been depleted, the central bank turned to its gold reserves. During the first two weeks of the Iran war alone, it sold or pledged approximately 58 tonnes of gold , worth around US$8 billion , from reserves totaling roughly US$130 billion . This was not a strategic shift away from gold. Rather, it was a sign of financial distress. After all, no country willingly sells its gold simply to pay for gasoline and diesel as long as better alternatives remain available. Turkey is not an isolated case. It is merely the most visible example of a broader group of countries that Jay Martin , publisher of the commodity newsletter Capital 10X , describes as "oil-importing emerging markets." This group includes India, Indonesia, Thailand, the Philippines, Egypt, Pakistan, Vietnam, and South Africa . They all share two characteristics: they depend heavily on imported oil, and they hold a significant portion of their national savings in U.S. Treasury securities. When oil prices surge, these countries are among the first to come under financial pressure. The Sri Lanka Pattern: When Running Out of Money Leads to Empty Shelves Sri Lanka's experience in 2022 demonstrates what happens once a country has exhausted its reserves. The country imports nearly everything required to keep its economy functioning—fuel, medicine, and food—and pays for those imports in U.S. dollars. When tourism collapsed during the COVID-19 pandemic, Sri Lanka's foreign exchange reserves fell from US$7.6 billion at the end of 2019 to just US$50 million by the spring of 2022. The consequences were as predictable as they were dramatic. Fuel first became scarce and eventually disappeared altogether. Medicines could no longer be purchased abroad. Food prices skyrocketed, while nationwide power outages lasted for hours at a time. Public anger escalated rapidly. In July 2022, hundreds of thousands of protesters stormed the presidential residence, forcing the country's president to flee. The difference between then and now is crucial. Sri Lanka's crisis resulted from the collapse of tourism and affected only one country. A global energy shock, by contrast, affects many countries simultaneously. The chain reaction, however, is identical. Every country that sells U.S. Treasuries puts downward pressure on bond prices, making other countries nervous and encouraging them to sell as well. Each sale increases the likelihood of the next. What Washington Is Really Doing—And What It Reveals Two quiet actions by the U.S. government demonstrate how seriously Washington views the situation. First, the United States is drawing down its Strategic Petroleum Reserve at a record pace. Anyone who believes this is primarily intended to help American motorists ahead of the congressional elections in November is not entirely wrong—but that explanation does not tell the whole story. The U.S. is also shipping part of those reserves overseas, an unusual move given that the Strategic Petroleum Reserve is intended for domestic emergencies. Second, in an effort to reduce mounting pressure on the U.S. Treasury market, the U.S. Treasury Department has quietly eased sanctions on Russian oil twice. This is occurring in the middle of a war in which Russia is on the opposing side. That step is equally extraordinary and suggests that the United States itself is under considerable pressure. The motivation behind both measures is the same. Washington wants to prevent vulnerable emerging-market economies from collapsing and triggering a wave of Treasury selling that could destabilize the U.S. bond market. Falling prices for U.S. government bonds mean weaker investor demand and higher borrowing costs for issuers. Neither outcome is desirable for U.S. President Donald Trump, who has repeatedly expressed his preference for lower interest rates. If the system were truly stable, none of these extraordinary measures would be necessary. Their implementation suggests that the pressure is not confined to individual emerging markets. The United States itself now finds it necessary to intervene in order to stabilize global financial markets. Source： https://goldinvest.de/en/why-countries-are-selling-their-gold-and-what-s-really-behind-it

[7.2 Morning Meeting Minutes] Iran claims the Strait of Hormuz will not reopen under US pressure; meanwhile, according to foreign media reports, Iran has secretly ordered the Houthis to blockade the Bab el-Mandeb Strait if the US attacks power facilities. The most-traded SHFE nickel 2609 contract plunged sharply in early trading, closing the morning session at 129,450 yuan/mt, down 1.14%. Bullish macro, policy, and cost-side factors, combined with strengthening technicals, give nickel prices rebound momentum, but weak demand and high inventories continue to cap the upside room. In the short term, the most-traded SHFE nickel contract is expected to trade in the range of 127,000-133,000 yuan/mt.

[7.17 Morning Meeting Minutes] US June PPI declined 0.3% MoM, the first drop since last year, while market expectations were for a flat reading; June PPI rose 5.5% YoY, significantly narrowing from the 6.5% in May; June core PPI YoY growth slowed to 4.7%, with only a 0.2% MoM increase, both below market expectations. On July 16, the most-traded SHFE nickel contract surged in early trading, breaking through 130,000 yuan/mt and briefly hitting 133,000 yuan/mt, with a morning gain of 2.9%; LME nickel simultaneously held above $17,000/mt, rising about 2.5% in early trading. Recently, macro, policy, and cost-side positives re-emerged. Combined with a MACD golden cross, nickel prices holding above the 10-day moving average, and bearish funds taking profits, nickel prices have rebound momentum. However, weak demand and high inventory continue to cap upside room. The most-traded SHFE nickel contract is expected to trade within a 127,000–137,000 yuan/mt range. Going forward, attention will focus on the results of Indonesia's July RKAB quota approval and the situation in the Strait of Hormuz.

Meralco PowerGen Corporation and its partners have inaugurated Phase I of the MTerra Solar project in Nueva Ecija, Philippines, comprising 1.373GW of solar PV and 825MW/3,300MWh of battery storage. Once fully developed, the project will reach 3.5GW of solar PV and 4,500MWh of BESS capacity, making it one of the world’s largest single-site integrated solar-plus-storage projects, according to MGEN. The facility can currently export up to 750MW to the Luzon grid, while all 741 battery units on site have been energized. After grid testing, it is expected to begin supplying power under a 600MW mid-merit PSA with Meralco.

The Philippines’ Energy Regulatory Commission is working to modernize the country’s transmission grid through the 2026 edition of the Philippine Grid Code, aiming to better accommodate variable renewables such as solar and storage technologies including BESS and pumped hydro. The updated code will introduce technical requirements for solar-plus-storage plants and standalone storage systems using grid-forming inverters to improve grid stability and system response, alongside new cybersecurity, planning, reserve and reliability rules. ERC is also proposing reforms to net metering and distributed energy resources, including shortening net-metering interconnection timelines from 20 to 10 working days, removing the 1MW DER cap, allowing multi-site crediting and prioritizing renewable dispatch in off-grid areas. SMM believes these grid and net-metering reforms could accelerate residential, C&I solar and solar-plus-storage deployment as electricity tariffs and solar import demand rise in the Philippines.

[7.16 Morning Meeting Minutes] US June CPI rose 3.5% YoY, compared to the expected 3.8% increase and the previous 4.2% rise. US June CPI fell 0.4% MoM, versus the expected 0.1% decline and the previous 0.5% increase. After the release of US June CPI data, traders pushed back their expectations for US Fed interest rate hikes to October. The most-traded SHFE nickel 2609 contract drifted lower in morning trading, closing down 0.43% at 128,870 yuan/mt at the end of the morning session. US inflation cooled significantly in June, with the unadjusted core CPI rising 2.6% YoY, below the expected 2.8% and the previous 2.9%. The cooling inflation further pushed back market expectations for US Fed rate hikes, and the US dollar extended its decline. In the short term, nickel prices may see a rebound, with the most-traded SHFE nickel contract price range between 127,000-133,000 yuan/mt.