SMM May 6: Metals market: As of the midday close, domestic market base metals all rose. SHFE copper gained 1.65%. SHFE aluminum gained 1.17%. SHFE lead gained 1.74%, SHFE zinc gained 2.24%. SHFE tin gained 6.6%. SHFE nickel gained 3.86%. In addition, casting aluminum most-traded futures gained 1.07%, alumina most-traded fell 0.56%. Lithium carbonate most-traded gained 6.59%. Silicon metal most-traded gained 1.77%. Polysilicon most-traded futures gained 1%. Ferrous metals all rose, with iron ore up 2.52%, rebar up 1.44%, hot-rolled coil up 2.02%, and stainless steel up 1.81%. Coking coal and coke: the most-traded coking coal contract gained 2.29%, and the most-traded coke contract gained 2.04%. Overseas market base metals, as of 11:42, LME metals rose across the board. LME copper gained 1.37%. LME aluminum gained 0.36%, LME lead gained 0.41%, LME zinc gained 1.65%. LME tin gained 4.43%. LME nickel gained 1.66%. Precious metals, as of 11:42, COMEX gold gained 1.85%, COMEX silver gained 3.18%. Domestic market precious metals: SHFE gold most-traded gained 1.84%, SHFE silver most-traded gained 5.15%. Analysts said gold futures prices rose as Middle East tensions eased. Vivek Dhar of the Commonwealth Bank of Australia noted in a research report that Trump announced a temporary suspension of the plan to provide safe passage through the Strait of Hormuz for vessels, which eased tensions. Since gold hit an intraday high of $5,422 per ounce on March 2, gold futures have largely moved inversely with the degree of Middle East tensions. Dhar added that upside drivers for gold prices could come from several factors: hopes for a Middle East ceasefire, market pricing of interest rate cuts due to high energy prices dragging on global growth, and concerns over US Fed independence. (Jin10 Data) In addition, as of the midday close, platinum most-traded futures gained 4.14%, and palladium most-traded futures gained 4.42%. As of the midday close, the most-traded contract of Europe containerized freight index gained 2.75%, closing at 2,339.3 points. As of 11:42 on May 6, midday futures quotes for selected contracts: Spot Cargo and Fundamentals Zinc: Today, #0 zinc mainstream transaction prices were concentrated at 23,845-24,215 yuan/mt. Shuangyan had no transactions for now. #1 zinc mainstream transaction prices were at 23,775-24,145 yuan/mt. In the morning session, the market quoted premiums of 70-100 yuan/mt against SMM average prices, with no quotes against futures for now... Macro Front China: [China's April RatingDog services PMI rose to 52.6, accelerating expansion, with new orders achieving growth for the 40th consecutive month] China's services sector activity further accelerated expansion in April, with the composite PMI climbing to the second-highest level in nearly two years, indicating that domestic economic recovery momentum was still building. On May 6, the latest data showed that the RatingDog China General Services business activity index rose to 52.6 in April, up from 52.1 in March, signaling an acceleration within a continuous growth sequence, with the current expansion cycle having started in January 2023 . Meanwhile, the composite output index covering both manufacturing and services rose from 51.5 in March to 53.1, the second-fastest pace since May 2024, indicating a broad-based strengthening of China's overall business activity. [11.279 million cross-border trips made during Labour Day holiday, up 3.5% compared to the same period last year] According to the National Immigration Administration, border inspection agencies nationwide facilitated 11.279 million cross-border trips during this year's Labour Day holiday, with a daily average of 2.256 million trips, up 3.5% compared to last year's Labour Day holiday. The single-day peak occurred on May 2, reaching 2.529 million trips. Among them, foreign nationals made 1.255 million entry and exit trips, up 12.5% compared to the same period last year; of the inbound foreign nationals, 436,000 trips were made under visa-free policies, up 14.7% compared to the same period last year. A total of 531,000 cross-border transport vehicles (aircraft, vessels, trains, and automobiles) were inspected, up 16.6% compared to the same period last year. (CCTV News) [MIIT: Q1 revenue of large-scale electronic information manufacturers up 14.8% YoY] MIIT released the operating performance of the electronic information manufacturing industry for Q1 2026. In Q1 2026, China's electronic information manufacturing industry saw rapid production growth, continued export rebound, significant improvement in profitability, and accelerated investment growth, with the industry maintaining a sound overall development momentum. In Q1, large-scale electronic information manufacturers achieved revenue of 4.31 trillion yuan, up 14.8% YoY; operating costs were 3.69 trillion yuan, up 11.7% YoY; total profits reached 217 billion yuan, up 1.25 times YoY. In March, large-scale electronic information manufacturers achieved revenue of 1.68 trillion yuan, up 15.7% YoY. [PBOC net drained 393.1 billion yuan through reverse repo operations] PBOC conducted 26 billion yuan of 7-day reverse repo operations today. As 419.1 billion yuan of 7-day reverse repos matured today, a net drainage of 393.1 billion yuan was achieved. US dollar: As of 11:42, the US dollar index fell 0.21% to 98.28. According to US financial website investinglive, USD/JPY dropped over 100 points in the short term, down more than 1% intraday, pulling back below the 157.00 level. The timing seems right — today is a Japanese market holiday, and the two previous intervention attempts also occurred in the window between the Asian session and the European session open. That said, the two previous interventions happened at a point closer to when USD/JPY had just broken through 157. This time, USD/JPY rallied all the way to near 158 before the suspected intervention occurred. Despite multiple attempts by Japan's Ministry of Finance, the effectiveness of intervention actions since last week has been diminishing, especially as fundamental factors continue to work overwhelmingly against the yen. The question then becomes how much money the Japanese authorities are willing to throw at this problem to make the intervention truly effective. Given the current broader economic backdrop, this is indeed a very thorny dilemma. The greatest hope Japanese officials are pinning on right now is that the US-Iran conflict can subside, thereby easing the pressure on the Japanese economy. Otherwise, they will continue swimming against a massive tide, trying to convince traders not to keep selling the yen. (Jin Shi Data) US President Trump posted that, based on requests from Pakistan and other countries, and given our tremendous military victories in actions against Iran, as well as significant progress made on a comprehensive final agreement with Iranian representatives, both sides have agreed that while blockade measures will remain in effect, "Operation Freedom" (the movement of ships through the Strait of Hormuz) will be paused for a period of time to see whether the agreement can be finalized and signed. (Xinhua News Agency) Bond traders are ramping up bets that the US Fed's next policy move could be a rate hike rather than an interest rate cut. Swap contracts tied to central bank rate decisions now show that the market expects a greater than 50% probability of the US Fed raising rates before April next year, ahead of any interest rate cut. An increasing number of traders are also adding positions to hedge against the rising probability of a rate hike before year-end. This shift in market sentiment comes as policymakers appear increasingly divided on the interest rate outlook. Lawrence Gillum, chief fixed income strategist at LPL Financial, believes that the possibility of interest rate cuts this year still exists, but it will gradually diminish as the Iran conflict drags on. He stated: "Without a doubt, the road ahead for Waller will be full of challenges." According to the CME "FedWatch": the probability of the US Fed holding rates unchanged through June is 96.0%, with a cumulative probability of a 25-basis-point cut at 4.0%. The probability of the US Fed holding rates unchanged through July is 88.8%, with a cumulative probability of a 25-basis-point cut at 10.9%, and a cumulative probability of a 50-basis-point cut at 0.3%. Bill Northey, Senior Investment Director at US Bank Asset Management Group, stated: "At this point, it appears that the Iran situation has not materially escalated, and the market is breathing a sigh of relief." Although hostilities in the Middle East appeared to ease on Tuesday, the conflict continued to affect future US economic indicators and the US Fed's interest rate decisions. He added that, for example, if the Strait of Hormuz could be safely and fully reopened, it would dampen expectations of rising inflation and push 10-year US Treasury yields lower. "Our base expectation is that this volatility is likely to persist," Northey said. (Jin10 Data) Data: Data to be released today include France's March industrial production MoM, France's April services PMI final, Germany's April services PMI final, Eurozone April services PMI final, UK April services PMI final, Eurozone March PPI MoM, US April ADP employment, and US April Global Supply Chain Pressure Index. Also noteworthy: 2028 FOMC voter and St. Louis Fed President Musalem is scheduled to speak on the economic outlook and monetary policy. Crude oil: As of 11:42, oil prices in both markets declined, with WTI down 1.39% and Brent down 1.4%. ING's commodities strategy team said in a report that the oil market faced renewed downward pressure as the US-Iran ceasefire agreement appeared to hold. Trump stated that "significant progress" had been made toward a "full and final deal" with Iran. The team noted that reaching an agreement to normalize oil shipments through the Strait of Hormuz was crucial. (Jin10 Data) After the Iran conflict triggered fuel supply panic in Australia, Australia plans to include a A$10 billion ($7.2 billion) fuel security and resilience plan in next week's budget proposal. Australian Prime Minister Albanese stated that the plan would help build fuel and fertilizer reserves, including supporting the expansion of total diesel and aviation fuel reserves to a level sufficient for 50 days of supply. He also said the government itself would hold approximately 1 billion liters of fuel reserves. The Prime Minister and the Energy Minister discussed the plan after a national security meeting in Sydney. Australia's Energy Minister stated that Australia had responded to the crisis and currently held more domestic fuel reserves than at the start of the Iran conflict. He said: "This marks a significant shift in how our nation responds. We have been studying how to be better prepared for future shocks." (Jin10 Data) Spot market overview: ► ► ► ► ► ► ► ► ► ► ► ► ► ► ► ► ► ►

Wells Fargo Securities' bull-case forecast for gold suggests that after last month's pullback in gold prices, gold prices could surge remarkably to $8,000 per ounce . Before the US-Iran war broke out on February 28 this year, gold had been one of the hottest market momentum plays of the year. However, after the war began, gold prices declined. In March, gold futures prices fell nearly 11%, marking the largest single-month decline since June 2013. But the Wall Street investment bank expects the "debasement trade" — in which central banks around the world sell fiat currencies such as the US dollar in favor of more neutral safe-haven assets — could push the precious metal to new heights. Wells Fargo Securities' chief equity strategist Ohsung Kwon wrote: "We are in the fourth currency debasement cycle, which started in 2022." Kwon added: "After the recent pullback in gold prices, prices are now closer to our model's fair value of $4,500 per ounce. Looking at the three drivers, all of them suggest that currency debasement will deepen further from current levels." The strategist said that four out of five economic scenarios point to further currency debasement, and gold prices could rise to $8,000 per ounce by 2027 as a result . Spot gold and gold futures were last trading near $4,800 per ounce, implying more than 66% upside room . Conversely, Kwon's bear-case forecast shows gold prices falling to $4,000 per ounce by the end of 2027, a decline of about 17% from current levels. Kwon uses the M2/gold ratio — M2 money supply divided by the gold price per ounce — to identify the current cycle. The analyst said the ratio shows that the latest debasement cycle began in 2022, when Russia launched its military operation against Ukraine and the US entered a rate-hiking cycle, prompting central banks worldwide to ramp up gold purchases. Previous currency debasement cycles for gold occurred during: the Great Depression; the "Nixon Shock" — when then-President Richard Nixon ended the convertibility of the US dollar into gold — and the subsequent stagflation era; the War on Terror in the early 2000s; and the subprime mortgage crisis. Kwon added that currency debasement cycles last an average of 8.5 years, and the current cycle, at 3.5 years in, has not yet reached its halfway point.

Recently, silver prices have embarked on an upward trend, attracting market attention.

After a period of sluggish performance, gold mining stocks have collectively strengthened today. As of press time, Chifeng Gold (06693.HK) has risen by 11.43%, Lingbao Gold (03330.HK) by 7.27%, Shandong Gold (01787.HK) by 6.15%, and China Gold International Resources (02099.HK) by 4.39%. Note: Performance of gold mining stocks Behind this unusual movement is the resurgence of international gold prices after a brief pullback. As of press time, COMEX gold futures prices have surpassed $3,370 per ounce. Gold prices' "V-shaped" reversal: Resonance of three catalysts Firstly, US President Trump announced on May 5 that a 100% tariff would be imposed on imported films produced overseas. Although this policy appears to target the film and television industry, it has triggered multiple chain reactions: On the one hand, the market fears that escalating trade frictions will impact the global supply chain, stimulating a rush of safe-haven funds into gold. On the other hand, the soaring costs of imported films may push up US inflation expectations, enhancing gold's inflation-hedging properties. Previously, Trump had already imposed tariff hikes on semiconductors, rare earths, and other sectors. Secondly, Israel declared on May 4 that it would retaliate against the Houthi forces in Yemen and Iran, escalating tensions in the Middle East once again. Finally, the US dollar index has continued to pull back recently, further boosting the attractiveness of gold prices. Gold mining stocks performed brilliantly in Q1 In addition to the three market factors boosting gold prices, miners with significant ties to gold have also benefited. Benefiting from the rise in gold prices, the performance of leading miners has continued to soar. Chifeng Gold's net profit in Q1 2025 increased by 141% YoY, while Shandong Gold's net profit growth reached 46.6%. Some institutions predict that if gold prices remain above $3,300, the annual net profits of major miners are expected to achieve 30%-50% growth. How do institutions view the subsequent performance of gold prices? Goldman Sachs released a research report stating that the bank reaffirms the logic of a "super cycle" for gold, raising its target price to $3,700 by the end of 2025 and to $4,000 by mid-2026. They also emphasized that if the credibility of the US Fed's policies is questioned, gold prices could surge to $4,500. Galaxy Securities believes that current gold prices need to digest the rapid gains from the previous period and may experience sideways movement in the range of $3,150-$3,550 in the short term. A breakthrough requires two signals: one is the initiation of an interest rate cut cycle by the US Fed, and the other is an explosion in physical demand. The institution pointed out that the scale of domestic gold ETFs has exceeded 130 billion yuan, surging by 160% YoY, and the consumption peak season in H2 may become a new catalyst.

Driven by the continuous rise in spot gold prices, Hong Kong-listed gold stocks maintained their strong performance. As of press time, Chifeng Gold (06693.HK), Tongguan Gold (00340.HK), Shandong Gold (01787.HK), and Zhaojin Gold (01818.HK) rose by 15.63%, 8.49%, 7.18%, and 6.95%, respectively. Note: The performance of gold stocks It is worth noting that gold stocks strengthened for the third consecutive trading day, with leading gains from Tongguan Gold and Chifeng Gold, which surged over 30% this week. On the news front, the US March unadjusted CPI annual rate fell to 2.4%, hitting a six-month low and below the market expectation of 2.6%. This data reinforced market expectations for the US Fed to initiate an interest rate cut in June, with the CME "Fed Watch" showing the market's pricing probability for a June rate cut rising to 98%. Meanwhile, the tariff policies implemented by the Trump administration have caused global supply chain disruptions, leading to a surge in investor demand for safe-haven assets, pushing COMEX gold futures prices above the $3,200/oz mark, with a cumulative increase of over 22% this year. Note: The trend of COMEX gold futures prices Institutions remain optimistic about the future performance of gold prices Deutsche Bank's latest report raised its gold price forecasts for this year and next to $3,139/oz and $3,700/oz, respectively, and expects prices to reach $3,350/oz in Q4. The bank emphasized that despite increased short-term market volatility, the bullish logic for gold remains solid, especially as central banks' gold purchasing demand surged from 10% in 2022 to 24%, far exceeding their demand for net bond issuance (7%-10%). BOC Securities analysis pointed out that the growth potential of global central bank gold reserves remains considerable, coupled with downward pressure on real interest rates, the value of gold as a safe-haven asset is expected to continue to rise. Carsten Menke, Head of Commodity Research at Julius Baer, noted that the "supply chain earthquake" triggered by tariff policies could severely impact US economic growth, and the value of gold as the ultimate safe-haven tool is being repriced.

[SMM Flash News: Gold Prices Approach $2,900! Precious Metals Sector "Soars" as Spot Silver Sees Limited Demand-Driven Transactions] US tariff threats have sparked market concerns, and under the dominance of risk-averse sentiment, precious metals have shown strong performance, with gold prices repeatedly hitting record highs recently! After the US postponed imposing additional tariffs on Canada and Mexico, market worries over trade conflicts have somewhat eased. However, with the US dollar continuously pulling back, precious metals still delivered impressive market performance. As of 15:16 on February 5, COMEX gold rose 0.26%, hitting a record high of $2,888.8 per ounce during intraday trading!

[Hunan Gold: YoY Increase in Selling Prices of Gold and Antimony, 2024 Net Profit Expected to Grow 60%-90% YoY] Hunan Gold previously disclosed its 2024 performance forecast, indicating that the company expects to achieve a net profit attributable to shareholders of the publicly listed firm of 782.5654 million yuan to 929.2964 million yuan, representing a YoY growth of 60%-90%. During the reporting period, the performance increase was mainly driven by the YoY rise in selling prices of the company's gold and antimony products.

[Gold and Antimony Price Increases Combined with Overseas Project Reaching Full Production, Huayu Mining Expects 2024 Net Profit to Grow Over Threefold YoY] ① Huayu Mining expects its 2024 net profit attributable to shareholders to range from 275 million yuan to 335 million yuan, an increase of 201 million yuan to 261 million yuan compared to the same period last year, up 272.19% to 353.39% YoY. ② The operational capacity of the gold and antimony project of the company's overseas subsidiary, Talco Gold Closed Joint-Stock Company, has improved. Benefiting from both volume and price increases, its profitability has strengthened.

[SMM Newsflash: Multiple Gold Companies Expect Positive Earnings, Market Risk-Aversion Sentiment Heats Up, Driving Precious Metals Sector to Strengthen Against the Trend] The US has not yet announced a clear tariff plan but hinted at the possibility of imposing tariffs on Canadian and Mexican goods as early as February 1. Amid economic and geopolitical uncertainties, market demand for safe-haven assets such as precious metals has increased. Along with the US dollar index falling for two consecutive trading days, retreating to around 108, the weakening US dollar has driven gains in precious metals futures and stocks. As of 15:13 on January 22, COMEX gold rose 0.14%, quoted at $2,763 per ounce…

[SMM Flash News: Expectations for US Fed Interest Rate Cuts Revive, Precious Metals Futures and Stocks Rise Together, SHFE Silver Up Over 3%] The US core CPI inflation pulled back for the first time in months, sparking market optimism. Expectations for the US Fed to further cut interest rates this year have risen, increasing the likelihood of at least a 25-basis-point interest rate cut at the Fed's June meeting. Precious metals futures and stocks all rose. As of 15:05 on January 16, COMEX gold was up 0.46%, quoted at $2,724.6/oz; COMEX silver was up 0.46%, quoted at $31.675/oz; SHFE gold rose 0.83%; SHFE silver surged 3.06%.