Feb 6 (Reuters) - Gold premiums in India more than halved from decadal highs this week as price volatility deterred buyers, while a pullback from record prices lifted demand in China ahead of the Lunar New Year.

[SMM Commentary: Precious Metal Futures and Stocks Performed "Remarkably" This Week, While Spot Silver Trading Remained Sluggish. How Do Major Institutions View the Market Outlook?] On May 23, amid intensifying market concerns over the deterioration of the US fiscal outlook, a weaker US dollar, and ongoing unrest in the Middle East, market risk-averse sentiment surged, driving precious metal futures and stocks to rise in tandem. In the futures market: As of 16:15 on May 23, COMEX gold rose by 1.01%, closing at $3,328.4 per ounce; COMEX silver rose by 0.7%, closing at $33.45 per ounce; SHFE gold rose by 0.1%, while SHFE silver fell by 0.37%, and silver T+D fell by 0.39%. In the stock market: On the 23rd, as the broader market experienced a nearly 1% decline, the precious metals sector bucked the trend and strengthened, ultimately leading the gains across all industries with a 1.96% increase.

SMM May 23 News: On May 23, driven by heightened market concerns over the deteriorating fiscal outlook in the US, a weaker US dollar, and ongoing unrest in the Middle East, risk-averse sentiment surged in the market, leading to a collective rally in precious metals futures and stocks. In the futures market: As of 16:15 on May 23, COMEX gold rose by 1.01%, closing at $3,328.4 per ounce; COMEX silver increased by 0.7%, closing at $33.45 per ounce; SHFE gold rose by 0.1%, while SHFE silver fell by 0.37%, and silver T+D declined by 0.39%. In the stock market: On the 23rd, amidst a nearly 1% decline in the broader market, the precious metals sector bucked the trend and strengthened, ultimately leading the gains across all industries with a 1.96% increase. It is worth noting that precious metals futures and stocks have generally performed well this week. As of around 17:09 on May 23, COMEX gold had temporarily risen by 4.37% week-on-week, poised to record its largest single-week gain in over a month; COMEX silver had temporarily increased by 3.16% week-on-week; SHFE gold had risen by 3.76% week-on-week, SHFE silver had risen by 1.95% week-on-week; and the precious metals index had risen by 6.96% week-on-week. News Updates The Shanghai Gold Exchange (SGE) issued a notice on May 23 regarding market risk control during the 2025 Dragon Boat Festival holiday. The notice stated: In accordance with the holiday schedule for the Dragon Boat Festival, our exchange will be closed from May 31 (Saturday) to June 2 (Monday). There will be no night trading session on the evening of May 30 (Friday), and trading will resume as usual on June 3 (Tuesday). To guard against fluctuations in gold and silver prices in the international market during the holiday, in accordance with the relevant provisions of the "Shanghai Gold Exchange Risk Control Management Measures", our exchange will adjust the margin ratios and price limits for gold and silver deferred contracts. The relevant matters are hereby notified as follows: 1. Starting from the settlement and clearing at the close of trading on Tuesday, May 27, 2025, the margin ratios for contracts such as Au(T+D), mAu(T+D), Au(T+N1), Au(T+N2), NYAuTN06, and NYAuTN12 will be adjusted from 13% to 14%, and the price limits for the next trading day will be adjusted from 12% to 13%; the margin ratio for the Ag(T+D) contract will be adjusted from 16% to 17%, and the price limit for the next trading day will be adjusted from 15% to 16%. If a one-sided market occurs on May 27, and the adjusted margin and price limit levels, in accordance with the relevant provisions of the "Shanghai Gold Exchange Risk Control Management Measures", are higher than the aforementioned standards, the higher standards shall apply. 2. After trading resumes on Tuesday, June 3, 2025, starting from the settlement and clearing at the close of the first trading day without a one-sided market, the margin ratios for contracts such as Au(T+D), mAu(T+D), Au(T+N1), Au(T+N2), NYAuTN06, and NYAuTN12 will revert to 13%, and the price limits for the next trading day will revert to 12%; the margin ratio for the Ag(T+D) contract will revert to 16%, and the price limit for the next trading day will revert to 15%. All members are requested to enhance their awareness of risk prevention, meticulously formulate and implement risk emergency response plans, and advise investors to take measures for risk prevention, reasonably control their positions, invest rationally, and ensure the stable and healthy operation of the market. After last-minute amendments before the vote, the landmark tax cut bill proposed during Trump's 2.0 term finally narrowly passed the US House of Representatives, being sent to the Senate with a slim margin of just one vote in favor over opposition. Market observers are concerned that the measures in the bill may widen the US government's budget deficit, placing greater pressure on the US bond market. (Wall Street CN) On May 23, Bank of America Global Research stated in a report that the gold market experienced a net outflow of $2.9 billion in the week ending Wednesday, marking the largest weekly outflow since April 2013 and the third-largest on record. Data released by the US Department of Labor on Thursday showed that the number of Americans filing for unemployment benefits for the first time in the week ending May 17 was 227,000, compared to market expectations of 230,000 and the previous week's 229,000. The number of continuing unemployment claims for the week ending May 10 was 1.903 million, compared to market expectations of 1.885 million and the previous week's 1.881 million. The number of initial jobless claims in the US fell by 2,000 to a four-week low last week, indicating that despite uncertainties brought about by trade policies, the labor market remains healthy. However, the number of continuing claims has risen, making it increasingly difficult for the unemployed to find new jobs. Silver spot prices show significant gains, with market transactions improving. 》Click to view SMM precious metal spot prices 》Subscribe to view historical price trends of SMM metal spot prices In the spot market: On May 23, the morning reference average ex-factory price for SMM1# silver was 8,215 yuan/kg, down 54 yuan/kg or 0.65% from the previous trading day. Compared to 8,090 yuan/kg on May 16 (last Friday), the average price of 8,215 yuan/kg represents an increase of 125 yuan/kg, with a weekly gain of 1.55%. It is reported that macroeconomic factors have boosted silver prices this week, with spot premiums from suppliers experiencing a slight decline towards the end of the week. Domestic spot market supply and demand have both declined, with some smelters suspending domestic spot quotes during the week due to factors such as prioritizing export demand. In the Shanghai area, tonne-scale national standard spot silver ingots available for self pick-up were quoted at a premium of 3-5 yuan/kg over TD, while large smelters' spot silver ingots were quoted at a premium of +5 to +8 yuan/kg over TD. Actual transactions at higher premium quotes were relatively difficult this week. In addition, silver nitrate production declined in late May, with downstream purchases primarily focused on long-term contract cargo pick-ups and spot order purchasing enthusiasm significantly weaker compared to April. Voices from All Sides [Is the Gold Bull Market Just Beginning? Analysts Say Historical Experience Suggests Prices Could Reach $4,500] Technical analyst and editor of *Daily Gold*, Jordan Roy-Byrne, pointed out that gold prices broke through a 13-year cup-and-handle formation in March last year, marking an important technical confirmation. Now, the driving factors of the macroeconomic situation are also converging, with the market witnessing rising US Treasury yields, the bond market entering a prolonged bear market, and a collapse in credit quality. He emphasized that similar macroeconomic backgrounds and technical conditions were present during the early stages of the gold bull markets in 1930, 1972, and 2002. Additionally, gold prices have surpassed the S&P 500 Index and the 60/40 portfolio, with inflation-adjusted gold prices just breaking above a 45-year low. Roy-Byrne stated that it is entirely possible for gold prices to reach $3,700 by the end of the year, and historical experience suggests that gold prices will reach $4,400 to $4,500 within the next 12 months. Furthermore, silver prices are also expected to surpass $100. 》Click for details Guosen Futures' research report points out: On the news front, the preliminary US S&P Global Manufacturing PMI and Services PMI for May both rose to 52.3, better than expected and the previous values. Enterprises accelerated stockpiling due to tariff risks, boosting the data. However, supply chain delays and soaring input costs exacerbated inflation stickiness, potentially strengthening market expectations that the US Fed will maintain interest rates unchanged, thereby suppressing precious metals in the short term. Coupled with the advancement of Trump's tax reform bill and the escalating risk of conflict between Iran and Israel, precious metals may continue to oscillate between the logic of policy tightening and stagflation hedging, with short-term technicals likely to remain volatile. In the medium and long-term, global central bank gold purchases and recurring geopolitical tensions are expected to consolidate the allocation value of precious metals. Regarding the trend of precious metals, SDIC Futures believes that the preliminary US S&P Global Manufacturing PMI and Services PMI for May both recorded 52.3, better than expected and the previous values, with weekly initial jobless claims falling to a four-week low of 227,000. Economic data remains resilient, causing precious metals to pull back. With recent trade wars and geopolitical conflicts still in the negotiation phase, market sentiment will continue to fluctuate, and the adjustment of international gold prices is unlikely to end soon. However, gold prices have shown resilience above the strong support level of $3,000 per ounce. The Chief Investment Office (CIO) of UBS Wealth Management expressed institutional views in early May, stating that the US dollar has recently been oversold and is expected to consolidate for a period in the short term. In the medium term, the trend of US dollar weakness may re-emerge, while gold prices should be well supported by "safe-haven" demand and structural buying. Goldman Sachs reiterated its structurally bullish view on gold, with a base case forecast of $3,700 per ounce by the end of the year and $4,000 by mid-2026. The World Gold Council's press conference for the Global Gold Demand Trends Report for Q1 2025 was held on April 30. It was revealed at the conference that demand for gold ETFs in the Chinese market surged synchronously, with inflows of approximately 16.7 billion yuan (about $2.3 billion, equivalent to 23 mt) in Q1, reaching a record high. The soaring gold price and unprecedented inflows propelled both the total assets under management (AUM) and total open interest of gold ETFs to break historical records, reaching highs of 101 billion yuan (about $13.9 billion) and 138 mt, respectively. According to statistics, the total gold consumption demand in the Chinese market in Q1 (including gold bars, coins, and jewelry) was 249 mt, down 15% YoY, primarily due to weak demand for gold jewelry. In addition to bullish views on gold, however, some market participants anticipate a decline in gold prices. Vitaly Nesis, CEO of Solidcore, Kazakhstan's second-largest gold mining company, stated on April 25 that the company plans to produce approximately 15 mt of gold annually in Kazakhstan in 2025 and 2026. Gold has risen nearly 26% year-to-date due to concerns about an economic recession triggered by US tariffs. Nesis expects gold prices to fall in the coming year. He said, "I anticipate gold prices will fall to $2,500 within 12 months. Gold prices will not return to the $1,800-$1,900 range. A premium relative to fundamental levels will persist. However, the current situation represents an overreaction to what is happening in the world." Recommended Reading: 》Silver Bottoms Out and Rebounds, Market Focuses on Inflation and Geopolitical Risk Aversion [SMM Weekly Review of Silver Market]

"We've already made sales this morning. After all, it's a holiday!" a staff member from a gold store in Guangzhou told a reporter from Cailian Press. As "520" (homophonic for "I love you") approached, multiple gold brands, including China Gold and Chow Sang Sang (00116.HK), launched corresponding promotional activities, such as instant discounts of 100 yuan for purchases of gold worth 520 yuan or more, a 50 yuan discount per gram, exchanging old gold for new pieces at no cost, and offering a 20% discount on designated gold jewelry with fixed prices. Recently, gold prices have shown a fluctuating trend. Market data indicates that in just over a month, international gold prices have fallen nearly 10% from the historical high of $3,500 per ounce in late April. On May 15, spot gold prices briefly dipped to $3,120 per ounce, but have since rebounded in the past two days, reaching $3,225 per ounce as of press time. Affected by international gold prices and combined with holiday promotions, the quoted prices for branded gold jewelry have generally fallen below the 1,000 yuan per gram threshold. A visit by a Cailian Press reporter found that today, the listing prices for pure gold jewelry from most gold brands are around 982 yuan per gram, a significant decrease from the 1,061 yuan per gram on April 22. At the "520" period, "romantic demand" has boosted gold consumption. At a gold store in Guangzhou, Mr. Fu purchased a gold necklace alone, stating, "It's a gift for my loved one on the holiday." Ms. Zhang spent over 4,000 yuan on gold jewelry for herself, including a Pixiu bracelet. A staff member at the store told a Cailian Press reporter, "The discount activities for '520' started a few days ago, and the number of people buying gold jewelry has increased significantly. 'We've already made sales this morning. It's indeed selling better than usual.'" Due to the continuous rise in gold prices since the beginning of this year, gold jewelry companies have generally faced pressure on their performance. A senior executive from Chow Tai Seng (002867.SZ) stated at a recent earnings briefing that in Q1 2025, amid increasing uncertainties in the external economic environment and a rapid increase in gold prices, market sentiment has become cautious. Franchisees have shown a lower willingness to make short-term purchases and replenish inventory, putting pressure on the company's franchising business. From this perspective, the decline in Q1 performance was somewhat expected by the company. However, we have also observed some positive signs, such as notable growth in gross profit and profit for the company's self-operated businesses (offline + e-commerce), as well as a significant increase in the overall gross profit margin. Lao Feng Xiang (600612.SH) mentioned that in Q1 this year, due to the rapid increase in gold prices in the short term, the sales volume in kilograms at the company's Chinese New Year ordering conference decreased YoY, which in turn affected the company's revenue in Q1. Recently, despite the significant decline in gold prices and the positive impact brought by "520" to the industry, many interviewees still believe that the gold sales market is unlikely to recover in the short term. A partner from a Shanghai Gold Exchange member company in Shuibei told a Cailian Press reporter that despite the recent correction in gold prices, there has been no significant increase in downstream shipments. "The current gold price is still at a high level. "No new products have been launched in the market, mainly because the current 5.2-gram products already cost nearly 5,000 yuan," said Song Yunming, Chief Analyst at Asamin International Economic Consulting, to a Cailian Press reporter. {{ }} Affected by multiple factors such as tariffs and the Russia-Ukraine relationship, spot gold faced greater downward pressure than upward support in Q2 and early Q3. The phased fluctuation downward indeed created opportunities for adjustment cycles, but the price level around $3,200 per ounce was not worth considering. {{ }} Under such circumstances, gold jewelry producers began to adopt strategies such as integrating online and offline sales and promoting lightweight gold jewelry to boost sales. {{ }} Wu Changfeng, Director and Deputy General Manager of Mankar Dragon, stated that as Generation Z becomes the main consumer force, online and offline channels have entered a phase of deep integration. "We observe that consumers rely on online platforms for product browsing, price comparisons, and initial screenings, while also valuing the in-person experience and product customization at physical stores. Therefore, we have achieved omnichannel synergy through the model of 'online precise lead generation + offline immersive experience': our online store leverages digital tools such as videos and live-streaming sales to enhance conversion rates, while our physical stores strengthen immersive shopping scenarios and VIP services, ultimately connecting the consumer data loop through a membership system. This omnichannel retail strategy not only meets the hybrid needs of the new generation of consumers to 'order anytime, anywhere, and experience in-store as needed' but also brings us an increase in cross-channel repurchase rates." Chow Tai Seng revealed that from 2017 to 2024, the average growth rate of e-commerce sales revenue reached 37.32%. {{ }} Previously, a representative from a publicly listed firm told a Cailian Press reporter, "Consumers tend to visit physical stores for expensive items, while lightweight or lower-value items may be more conveniently purchased online. Young people value the convenience of channels and are accustomed to this consumption scenario." {{ }} Cailian Press reporters noted that on e-commerce platforms, gold jewelry sold by gold brands includes small rings, bracelets, earrings, necklaces, etc., with most prices below 3,000 yuan. {{ }} When asked about the subsequent trend of gold prices, Song Yunming told a Cailian Press reporter that prices may continue to decline in the short term. "On the one hand, gold prices have risen by more than 30% this year, with irrational speculative sentiment prevailing in the market in the second half of April, and many buyers entering at high prices. This corrective fluctuation guides market sentiment back to rationality and even generates risk aversion. On the other hand, bullish and bearish factors are intertwined in the fundamentals, with clear downward pressure around $3,430 per ounce. The risk of short-term overall fluctuation downward still exists. Within a 90-day window, it cannot be ruled out that spot gold may fall below $3,000 per ounce, with key support levels to watch in the range of $2,850-2,930 per ounce."

According to the latest statistics from the China Gold Association, in Q1, domestic gold production from raw materials reached 87.243 mt, up 1.284 mt YoY, representing a 1.49% YoY increase. This included 61.772 mt of gold produced from gold mines and 25.471 mt of gold produced as a by-product of non-ferrous metals. Additionally, in Q1, gold production from imported raw materials was 53.587 mt, up 0.68% YoY. Including this gold produced from imported raw materials, China's total gold production reached 140.83 mt, up 1.18% YoY. In Q1, gold enterprises seized the opportunities brought about by rising gold prices, further reducing the cut-off grade to maximize the utilization of gold mine resources, leading to steady growth in gold production. Key gold mine projects, such as Haiyu, Shaling, and Xiling, advanced rapidly. Major gold enterprises actively adjusted their gold production layouts and promoted the construction of intelligent and green mines. China's large gold groups actively pursued an "outbound" strategy, accelerating the pace of gold M&A with remarkable results. On March 10, Chifeng Jilong Gold Mining Co., Ltd. was listed on the main board of the Hong Kong Stock Exchange, becoming the third domestic gold enterprise to be listed on both the "A+H" dual platforms, following Zijin Mining and Shandong Gold. In Q1, China's large gold groups produced 18.485 mt of gold from overseas mines, up 13.14% YoY. In Q1, China's gold consumption reached 290.492 mt, down 5.96% YoY. This included 134.531 mt of gold jewelry, down 26.85% YoY; 138.018 mt of gold bars and coins, up 29.81% YoY; and 17.943 mt of gold for industrial and other uses, down 3.84% YoY. Due to the suppression of high gold prices, consumer demand for gold jewelry remained weak, with traditional gold, high-purity gold, and small-weight gold jewelry being in higher demand. Products combining gold with other materials were also popular among young consumers. The complex and volatile geopolitical situation and economic uncertainties further highlighted gold's function as a safe-haven asset and a store of value, leading to a rapid and substantial increase in private investment demand for gold bars and coins. Industrial gold use showed a slight decline due to the impact of high gold prices. In Q1, China's gold market trading volume and turnover showed significant growth trends. The total two-way trading volume of all gold varieties on the Shanghai Gold Exchange was 16,000 mt (8,000 mt one-way), up 4.57% YoY, with a two-way turnover of 10.7 trillion yuan (5.35 trillion yuan one-way), up 42.85% YoY. The total two-way trading volume of all gold varieties on the Shanghai Futures Exchange was 55,400 mt (27,700 mt one-way), up 91.17% YoY, with a two-way turnover of 30.52 trillion yuan (15.26 trillion yuan one-way), up 143.69% YoY.In Q1, the open interest of domestic gold ETFs increased by 23.47 mt, up 5.49 mt from Q1 2024, representing a 327.73% YoY increase. By the month-end of March, the holdings of domestic gold ETFs reached 138.21 mt. On February 7, the National Administration of Financial Regulation issued the Notice on Conducting Pilot Programs for Insurance Funds to Invest in Gold Business, clarifying that insurance companies could conduct pilot programs for investing in gold business for the purpose of medium and long-term asset allocation. On March 25, the Beijing Branch of Industrial and Commercial Bank of China, in collaboration with China Life Insurance Company Limited, completed the nation's first insurance fund gold investment inquiry transaction under the new policy framework of the National Administration of Financial Regulation for conducting pilot programs for insurance funds to invest in gold business. This marked the first batch of gold transactions involving insurance funds entering the market. The investment channels for insurance funds were further broadened, injecting new vitality into the development of the gold market to a certain extent. By the month-end of March, the London spot gold fixing price was US$3,115.1 per ounce, up 17.79% from US$2,644.60 per ounce at the beginning of the year. The average price in Q1 was US$2,859.62 per ounce, up 38.16% from US$2,069.80 per ounce in the same period of 2024. The closing price of Au9999 gold on the Shanghai Gold Exchange was 730.8 yuan per gram by the month-end of March, up 19.02% from the opening price of 614 yuan per gram at the beginning of the year. The weighted average price in Q1 was 670.67 yuan per gram, up 37.68% from 487.11 yuan per gram in Q1 2024. In Q1, China increased its gold holdings by 12.75 mt. As of the month-end of March, China's gold reserves stood at 2,292.33 mt.

[SMM Morning Zinc Meeting Summary: US Dollar Weakens, LME Zinc Rises Slightly]: Overnight, LME zinc opened at $2,649/mt. Early in the session, LME zinc quickly dropped to $2,625.5/mt. Subsequently, as bulls increased their positions, LME zinc fluctuated upward, reaching a high of $2,657.5/mt during the night session. However, the upward momentum was insufficient, and LME zinc fluctuated downward throughout the session, eventually oscillating near the daily average line towards the close. It closed up at $2,654/mt, gaining $8.5/mt, or 0.32%. Trading volume decreased to 7,562 lots, while open interest increased by 2,089 lots to 207,000 lots.