Non-oriented Silicon Steel Price Dynamics Shanghai B50A800 grade: 4,350-4,350 yuan/mt Guangzhou B50A800 grade: 4,150-4,150 yuan/mt Wuhan 50WW800 grade: 4,160-4,160 yuan/mt Shanghai market: This week, cold-rolled non-oriented silicon steel spot prices in the Shanghai market were in the doldrums, and overall market transactions maintained off-season performance. Market feedback indicated that HRC futures consolidated this week, market confidence recovered somewhat, the current supply-demand imbalance was relatively pronounced, demand visibly weakened, and most downstream motor enterprises mainly purchased as needed, with low stockpiling willingness. Overall, cold-rolled non-oriented silicon steel prices in the Shanghai market are expected to remain in the doldrums next week, with expectations of following cost declines. Guangzhou market: This week, the cold-rolled non-oriented silicon steel market in Guangzhou was in the doldrums, and transactions were somewhat sluggish. Market feedback indicated that ferrous metals futures consolidated this week, and the spot market lacked direction. However, the industry is currently in its traditional consumption off-season, downstream end-users such as motor and appliance enterprises maintained low operating rates, purchasing sentiment was cautious and conservative, and typhoon and rainstorm weather affected sales, making the market even more sluggish. Overall, cold-rolled non-oriented silicon steel prices in the Guangzhou market are expected to remain in the doldrums next week. Wuhan market: This week, the cold-rolled non-oriented silicon steel market in Wuhan was in the doldrums, with prices generally declining by 30-50 yuan/mt and lackluster transactions. Market feedback indicated that futures consolidated, downstream enterprises showed strong wait-and-see sentiment, demand resilience was insufficient, and traders reported that actual transactions were average, and they held cautious expectations for the future market outlook and chose to control inventory levels. Overall, cold-rolled non-oriented silicon steel spot prices in the Wuhan market are expected to remain in the doldrums next week. Data Source Statement: (All other data in this report are derived from public information (including but not limited to industry news, seminars, exhibitions, corporate financial reports, broker reports, NBS data, customs import and export data, and various data published by major associations and institutions), market communications, and the SMM internal database model, and are obtained through comprehensive analysis and reasonable inference by the research team; they are for reference only and do not constitute decision-making advice.) SMM has the final right to interpret the terms of this statement and reserves the right to adjust and amend the content of this statement according to actual circumstances.

[Liquidity Tightening Concerns Ease Marginally, Aluminum Prices Stay Under Pressure at Highs in Near Term] Overall, on the macro front, US PPI and core PPI for July both declined YoY, coming in below both expectations and previous readings. Inflationary pressure eased further, and market expectations for a US Fed rate hike in September were scaled back, marginally easing concerns over liquidity tightening. On the fundamentals front, aluminum ingot inventories continued to destock, but destocking was expected to slow down in the second half of the month. The pace of production resumptions at Middle Eastern aluminum smelters was faster than the market had previously expected, and the supply-tightness premium priced in earlier faced pressure to unwind. Although macro recovery and continued destocking in the first half of August supported stronger aluminum prices, market sentiment shifted, and aluminum prices are expected to remain under pressure at high levels in the near term, with upside room likely to be capped to some extent by production resumption expectations.

This week, quotes for cobalt chloride and Co3O4 in China fell markedly; however, the decline was not driven by a sudden deterioration in short-term supply-demand fundamentals. For cobalt chloride, although quotes from some sellers had previously stayed high, they lacked effective liquidity support, leaving prices on a fragile footing. When buyers with just-in-time procurement needs made inquiries at prices below mainstream spot price levels, or even below the industry cost line, and as some sellers took a pessimistic view on the market outlook and weighed their own working capital needs, some enterprises lowered quotes, resulting in actual transactions below cost. For Co3O4 pricing, during the previous three months of sustained price declines, to cushion the impact of a sharp drop in our quotes on market sentiment, we proactively adopted a "slow decline" strategy, using low-range quotes as a market reference. However, as the adjustment period extended, the cushioning effect of our quotes diminished at the margin, and the spread between actual transaction prices and quotes continued to widen. To more accurately reflect actual market transaction levels, this week we proactively abandoned the slow-decline pace and moved our quotes closer to a tradable range, a move that objectively amplified this week's price decline. It should be emphasized that the current low prices for cobalt chloride and Co3O4 are more a reflection of choices made by some enterprises; quotes from mainstream top-tier producers remain relatively firm, and the market has not seen broad-based sharp price cuts. Looking ahead, we believe that after this round of price adjustments, there is limited room for another sharp, deep decline in the short term. The market is expected to gradually enter a phase of bottoming out and consolidating at lows, with prices moving sideways in a narrow range on a subdued note. Co3O4's subsequent trend will remain closely anchored to the pace of cobalt chloride price fluctuations.

I. Overall Market Review During this cycle, China’s platinum‑group compound market exhibited notable structural divergence alongside a “rally‑then‑pullback” pattern. Driven by overseas price swings and overseas policy‑related events, platinum‑ and palladium‑based compounds surged in phases before succumbing to corrective pressure; rhodium‑based products trended steadily higher, while iridium‑ and ruthenium‑based grades traded independently with stable performance. The core market contradiction lies in the mismatch between sharply rising costs and persistently weak demand. Sharp jumps in NYMEX platinum and palladium prices directly lifted domestic raw‑material costs for chloroplatinic acid and palladium chloride, hitting periodic highs. Nevertheless, end‑user sectors including automotive catalysts, pharmaceuticals and petrochemicals entered the summer maintenance off‑season with low operating rates and sluggish spot trading. Downstream participants mostly adopted restocking‑on‑demand strategies without sustained buying interest, which triggered broad pullbacks for previously‑rallied platinum‑palladium products, alongside an overall decline in industry processing margins. Less exposed to price spillovers, iridium‑, ruthenium‑ and rhodium‑based products traded within tight ranges with modest upticks. II. Trend of Segmented Products Chloroplatinic Acid: Sharp Volatility, High‑level Correction Its price moved through three phases: stability, sharp rally and pullback. Trading remained quiet at the initial off‑season stage with steady prices. Later, surging overseas platinum prices, together with bullish sentiment from tariffs and geopolitical factors, pushed quotations rapidly to new range highs. In the final phase, high prices curbed downstream purchasing appetite; absent incremental capital, upward momentum faded, leading to weak high‑level consolidation. Palladium Chloride: Leading Gains, Under Pressure at Highs It moved in close correlation with chloroplatinic acid yet posted stronger gains. Driven by overseas palladium rallies, production costs rose markedly, and prices breached key thresholds to reach recent highs. Constrained, however, by off‑season downstream weakness, the rally lacked durable support and ended with high‑level consolidation and mild corrections. Rhodium Trichloride: Steady Strengthening, Moderate Uptrend Trading decoupled from wild platinum‑palladium swings, it maintained a firm bias. Supported by modestly higher feedstock costs, producers tentatively lifted offer prices. Despite off‑season demand headwinds, gains unfolded in an orderly manner without extreme volatility, delivering a sound moderate‑uptrend performance. Chloroiridic Acid & Ruthenium Trichloride: Decoupled, Stable Performance Both grades were largely insulated from platinum‑palladium rally sentiment. Chloroiridic acid registered a mild, slow independent uptick with minimal volatility. Ruthenium trichloride oscillated at low levels within a narrow band and closed only marginally higher. Supported by independent supply‑demand fundamentals, neither saw trending sharp rises or falls, showing the most stable market performance. III. Core Market Drivers Cost‑and‑sentiment‑driven pricing The sharp rally of platinum‑ and palladium‑based compounds stemmed primarily from cost pass‑through amid soaring overseas feedstock prices. Heightened speculative sentiment fuelled by overseas tariff and geopolitical expectations amplified short‑term volatility. By contrast, rhodium‑, iridium‑ and ruthenium‑based products displayed decoupled market behaviour due to weaker correlation. Off‑season demand caps price gains Concentrated downstream maintenance substantially shrank real consumption, creating a “high‑price‑weak‑demand” market dislocation. Market participants maintained lean‑inventory postures with no large‑scale stock‑building activity, leaving platinum‑ and palladium‑based products without fundamental backing and vulnerable to downward pressure. Dual‑sided margin squeeze Profitability of producers and traders was squeezed from both sides: surging upstream feedstock costs and feeble downstream demand. To boost transactions and ease inventory pressure, market players generally lowered processing margins; profit concessions became common practice to facilitate deals. IV. Market Outlook In the short term, China’s platinum‑group compound market will retain its pattern of “cost‑driven, demand‑constrained and structurally‑divergent”. First, chloroplatinic acid, palladium chloride and similar products will stay in weak high‑level consolidation. Their prices remain highly sensitive to overseas market movements. Still, without recovery in off‑season downstream demand, current high price levels lack durable backing, and one‑sided upward momentum is limited. Range‑bound oscillation with mild corrections is anticipated. Second, niche products including rhodium trichloride, chloroiridic acid and ruthenium trichloride face limited external disruptions. Mild feed‑side support underpins their modest upward bias. Even so, off‑season demand drags will prevent aggressive trending rallies in the near term; narrow‑band fluctuation and gradual mild gains are expected.

I. Overall Market Review During the week, China’s platinum group compounds market showed notable structural divergence and a “retreat after rapid rise” pattern. The market was driven mainly by fluctuations in overseas market prices and overseas policy events. Platinum and palladium compounds experienced a period of sharp gains before pulling back under pressure; rhodium-based products rose steadily; iridium and ruthenium-based products remained independent and stable. The core contradiction in the current market is the mismatch between a sharp increase on the cost side and persistently weak demand. Upstream NYMEX platinum and palladium prices jumped sharply, directly pushing up domestic raw material costs for chloroplatinic acid and palladium chloride to fresh highs for the period. However, downstream sectors such as automotive catalysts, pharmaceuticals, and petrochemicals were in the high-temperature maintenance off-season, with insufficient end-user operating rates and sluggish spot trades. Downstream enterprises mostly adopted a strategy of restocking only as needed and lacked sustained buying support, causing platinum and palladium products that had surged earlier to generally pull back under pressure, while industry processing fees moved lower overall. Iridium, ruthenium, and rhodium-based products were less affected by spillover and merely moved sideways with mild gains. II. Price Trends by Product 1. Chloroplatinic Acid: Wild Swings, Correction from Highs The price trend showed three stages: “stable—surge—pullback.” In the early stage, trading was sluggish due to the off-season, and prices were steady; in the middle stage, driven by soaring overseas platinum prices and a confluence of bullish sentiment related to tariffs and geopolitics, prices jumped quickly to new highs for the range; in the later stage, high prices dampened downstream purchase willingness and there was no incremental capital, causing market momentum to fade, and prices consolidated at highs on a subdued note. 2. Palladium Chloride: Leading Gains, Under Pressure at Highs Its trend was highly correlated with chloroplatinic acid, but its gains were more notable. Driven by a surge in international palladium prices, production costs rose sharply, and prices broke strongly through key levels to set recent highs. However, also constrained by weak downstream demand in the off-season, prices lacked sustained support after the rapid rise and eventually ended with high-level consolidation and a slight correction. 3. Rhodium Trichloride: Steady Strengthening, Mild Uptrend The market was independent of the sharp fluctuations in platinum and palladium and was generally firm. Supported by a slight rise in upstream raw material costs, enterprises tentatively raised their quotes. Although constrained by off-season demand, the upward pace was mild and orderly, with no extreme fluctuations, showing a healthy pattern of steady gains. 4. Chloroiridic Acid and Ruthenium Trichloride: Independent Trends, Stable Operation The two products were largely unaffected by the surge in sentiment around platinum and palladium. Chloroiridic acid moved independently in a mild, slow uptrend with minimal fluctuations; ruthenium trichloride remained in low-level sideways movement, ending the period with only a small gain. Both had independent supply-demand patterns, with no trend-like sharp rises or falls throughout the period, and were the most stable. III. Core Operating Logic 1. Costs and Sentiment Dominated Prices The core driver of the surge in platinum and palladium compounds was cost transmission from soaring overseas raw material prices, coupled with events such as overseas tariff and geopolitical expectations, which heated up speculative sentiment and amplified short-term fluctuations. In contrast, iridium, ruthenium, and rhodium products were relatively independent due to weak linkages. 2. Off-Season Demand Capped Gains Concentrated maintenance by downstream end-users caused rigid demand to contract sharply, creating a mismatched pattern of “high prices and weak demand.” Enterprises generally implemented light inventory strategies, with no concentrated stockpiling, directly causing platinum and palladium products lacking fundamental support to quickly come under pressure. 3. Profit Margins Squeezed from Both Sides Sharp rises in upstream raw material costs and weak downstream demand squeezed corporate profits from both directions. To stimulate transactions and relieve inventory pressure, producers and traders generally lowered processing fees; pricing concessions to facilitate transactions became the industry norm. IV. Market Outlook In the short term, China’s platinum group compounds market will continue to show a pattern of cost-led prices, constrained demand, and structural divergence: First, chloroplatinic acid, palladium chloride and other products will continue to consolidate at highs on a subdued note. Going forward, prices will remain highly dependent on overseas market trends; however, before downstream demand in the off-season recovers, high prices will lack sustained support and momentum for a one-sided advance will be insufficient. Prices are expected to be mainly range-bound with slight corrections. Second, niche products such as rhodium trichloride, chloroiridic acid and ruthenium trichloride are subject to limited external disruption and, with mild support from raw material costs, prices are steady with a modest upward bias. However, they are also constrained by off-season demand, so a strong trend-driven rally is unlikely in the short term; overall, they are expected to be dominated by narrow fluctuations and a mild, slow uptrend.

[SMM Rare Earth Weekly Review: Rare Earth Market Remains in the Doldrums Overall, Pr-Nd Prices Continue to Pull Back, Magnetic Material Trading Recovers] This week, Pr-Nd oxide prices continued to be in the doldrums. Affected by futures fluctuations, downstream purchase willingness stayed weak, and trading in the Pr-Nd oxide market was still sluggish. Some traders continued to sell at low prices, and market pessimism spread. As of today, Pr-Nd oxide prices dropped further to 713,000-717,000 yuan/mt.

SMM, August 13: Futures turned sharply lower today, while the South China spot market remained weak. Inventory accumulated again after four months, somewhat dampening expectations for the market outlook, and bearish sentiment gradually emerged. With both absolute prices and the spot-futures price spread weakening, holders briefly tried to hold prices firm but failed, then generally cut prices and sold more to cash out promptly. Mainstream quotations were at discounts of 20 yuan/mt to parity, and the glut in circulation was no different from that during yesterday’s sharp rally. Demand side, downstream buyers gradually bought on dips while standing on the sidelines, though buying interest was not high. Traders still bought less and sold more, with only as-needed purchases, which created a clear drag. Both supply and demand were weak, and overall transactions were poor. Spot transaction prices were concentrated at premiums of 65 yuan/mt to 105 yuan/mt over the SHFE aluminum 2608 contract.

Entering Q3, the battery-grade nickel sulphate spot market appears to be "losing vitality," with reduced transaction frequency and relatively weak price trends. SMM believes this is primarily driven by a combination of three factors: weakening cost support, a gradually loosening supply-demand pattern, and a shift in market structure. This article will discuss these three factors in detail. I. Cost Side: Weakening Nickel Prices and Raw Materials Together In terms of nickel prices, August marks the period for the release of additional quotas in Indonesia, which has tempered market expectations of a significant shortage of Indonesian nickel ore. Coupled with the ongoing "shadow" of macroeconomic interest rate hikes, nickel prices have weakened. On the MHP payables front, following the concentrated arrival of sulphur in Indonesia, the supply of Indonesian intermediate products is expected to continue rising. According to SMM data, Indonesia's MHP supply-demand balance turned positive in July for the first time in a month. Meanwhile, downstream nickel and cobalt salt prices (especially cobalt salts) remain relatively weak, and downstream players are under pressure from losses, showing lower acceptance of high payables. Consequently, MHP payables remain under pressure overall. The market availability of high-grade nickel matte remains tight, and its payables are expected to hold steady. With both nickel prices and raw material payables declining, the spot production cost of nickel sulphate in August is expected to weaken overall from a spot cost perspective. II. Supply Side: High Raw Material Flexibility, Production Schedules Expected to Rise Since Q2, although MHP production schedules fell sharply at one point, nickel sulphate supply levels remained relatively stable, and no prolonged undersupply emerged. In Q3, as intermediate product production schedules gradually recover, this trend is expected to become more pronounced. According to SMM data, while battery-grade nickel sulphate production in July dipped 2% MoM due to production cuts or maintenance at some salt plants, August output is expected to rise over 8% MoM, returning supply to high levels. Total battery-grade nickel sulphate production from January to August 2026 grew 33% YoY. Behind this steady output lies strong supply flexibility in nickel salt raw materials. In addition to the adjustments using refined nickel raw materials and the substitution between high-grade nickel matte and MHP discussed in previous articles, recycled materials have also contributed a significant supply scale for nickel sulphate this year. On the one hand, after China opened up imports of lithium battery black mass last year, recycled raw materials have been able to be imported steadily, providing incremental raw material for recycled nickel sulphate. On the other hand, as the scale of ternary battery decommissioning gradually expands, and with some companies launching new recycling projects this year, the overall supply scale of black mass in the industry has risen. According to SMM data, the output from pulverising scrap ternary batteries in July doubled compared to the same period last year, providing significant flexibility for nickel sulphate supply. III. Demand Side: NMC Demand Supports Overall Consumption Volume but Fails to Directly Drive External Spot Purchases NMC demand exceeded expectations this year, serving as a key reason nickel sulphate maintained a relatively high premium. Consumption of nickel sulphate by downstream enterprises is expected to remain elevated in Q3. On one hand, with the September-October peak season for auto sales approaching, top-tier downstream players hold favorable demand expectations for mid-to-high nickel materials, driving higher production schedules at associated precursor plants. On the other hand, overseas high-nickel orders secured by leading firms have also stayed at high levels, supported by robust demand in Europe and other regions and by installation rush strategies triggered by adjustments to battery cell export tax rebate policies. According to SMM data, demand for battery-grade nickel sulphate in the new energy sector rose 1.55% MoM in July and is expected to grow a further 0.9% in August. However, the top-tier precursor enterprises with relatively strong orders are highly integrated, with several possessing refined nickel production capacity and ample flexibility to adjust in-house nickel sulphate output. As a result, the downstream demand increase provides limited direct stimulus to spot nickel sulphate procurement. According to SMM data, the combined production schedule of the five leading integrated and semi-integrated enterprises rose 11% MoM in August, and in-house output can meet over 80% of their raw material needs, meaning the incremental demand for externally purchased nickel sulphate was not significant. IV. Market Structure: Expanding Long-Term Contract Scale Squeezes Spot Order Space A notable structural shift in the Q3 nickel sulphate market is the expansion in the scale of long-term contracts. SMM estimates show that monthly spot orders for nickel sulphate stood at roughly 3,500-4,500 mt in metal content in 2025 and Q1 this year. Against the backdrop of rising NMC demand, this scale has shrunk to around 2,000 mt in metal content in Q3. At the start of the quarter, spot orders were expected to gradually retreat from monthly just-in-time procurement to a supplementary role for long-term contracts in corporate purchasing strategies, with additional purchases made only when clear downstream demand increments or raw material supply disruptions occur. This has suppressed market activity in August and early September. Moreover, with no significant decline in nickel sulphate supply, downstream acceptance of spot prices remains generally low. The expansion of long-term contracts stems from two factors. First, the high volatility in nickel prices and raw materials this year has intensified decision-making pressure on enterprises for spot orders, prompting a tendency to lock in demand through long-term contracts. Second, after persistent overcapacity, few new entrants have emerged, and industry supply chains have stabilized, with upstream and downstream enterprises gradually forming steady cooperative relationships. In the long term, the overall scale of long-term contracts is still expected to trend upward. V. Market Outlook As mentioned above, the supply and demand of nickel sulphate spot orders has shifted from relative tightness in Q2 to a slight surplus. From August to early September, prices are expected to be generally in the doldrums; after the downstream demand for the 'September-October peak season' becomes clear in September, the spot order market activity may recover to some extent, driving a rebound in nickel sulphate prices.

August production schedules were further under pressure, with the MoM impact on refined lead reaching -22,300 mt. Most enterprises had held a pessimistic view on the market outlook earlier, making maintenance and low-load operations the norm. Many smelters postponed their originally planned production resumptions for August to September.

SMM August 11 news: The ADP and non-farm payrolls data in the US fell significantly short of expectations, and the US labour market weakened, causing the market to lower its expectations for US Fed interest rate hikes. After an earlier deep correction in the precious metals market, a certain amount of short positions had accumulated; when the market turned a corner, this triggered concentrated short covering. Meanwhile, gold ETFs saw fund inflows, and investment buying was active on China’s futures market. This round of gains was driven more by financial attributes and derivatives-related funds, while the physical side failed to provide a simultaneous boost. In addition, central banks around the world continued to allocate to gold assets, and the PBOC increased its gold holdings for the 21st consecutive month, building medium and long-term bottom support for gold prices. A confluence of factors pushed precious metals futures prices higher. As of around 13:27 on August 11, COMEX gold extended gains into a third straight session, up 0.89% at $4,459/oz; the most-traded SHFE gold futures extended gains for another session, up 1.887% to 961.86 yuan/g; COMEX silver extended gains into a third straight session, up 0.39% at $65.525/oz; the most-traded SHFE silver futures extended gains for the sixth straight session, up 3.08% to 16,069 yuan/kg; silver T+D extended gains for the sixth straight session, up 1.98% to 15,860 yuan/kg. In addition, the most-traded platinum futures extended gains for a second session, up 0.59% to 437 yuan/g, and the most-traded palladium futures extended gains for the fifth straight session, up 1.92% to 331.05 yuan/g. Currently, the market is focused on US July CPI data, and uncertainties remain for precious metals. With futures prices continuing to rise, what are institutions’ views on the outlook for precious metals? Spot Market Silver On August 11, the SMM #1 silver ex-factory reference average price in the morning was 16,123.5 yuan/kg, up 4.63% from the previous trading day. The continuous rise in silver prices continued to suppress downstream industrial demand, with buyers mostly adopting a wait-and-see attitude. The price spread narrowed today, traders lowered their offer prices, and some suppliers chose to sell at discounts to move inventory. Morning quotes in Shanghai were mainly concentrated between TD-5 and +5 yuan/kg. Reduced purchases by banking institutions weakened the floor support, and only some acceptance demand led to necessary deals, with the overall market leaning toward parity or a slight discount. In Shenzhen, some nationally standardized supplies were concentrated around slight discounts, with both buyers and sellers remaining cautious. Today, market premiums for the most-traded SHFE 2610 contract were quoted at a discount of 65 to 55 yuan/kg. Overall, precious metals drifted higher today, driven by bullish factors and buying. Spot market, after silver prices rose, selling pressure mounted, and transactions gradually shifted to discounts. Platinum On August 11, the average spot price of platinum was 432 yuan/g, up 0.23% from the previous trading day. Mainstream platinum quotations were at discounts of 3.5 yuan/g to 2.5 yuan/g against the PT2610 contract, with a wide disparity in quotations. Downstream consumption remained relatively weak, dominated by just-in-time procurement. The discount on mainstream quotations was basically flat with yesterday. Due to consecutive futures gains, some unhedged goods were offered at lower prices in the market. Today, overall consumption in the platinum spot market remained sluggish. Voices Regarding the future trend of precious metals, some institutions are more optimistic, while others are more cautious. The views of several institutions are as follows: Chaos Tiancheng Futures believes: Precious metals moved in tandem with US Treasury yields, the US dollar index, and oil prices on Monday, reflecting their gradual pricing in of long-term drivers such as debt credit risk, while the increasing possibility of "stagflation" further supported the market. The long-term driver, US Treasury credit, showed some intensification, as the US debt scale further exceeded $40 trillion last week and the US July deficit rate deteriorated, with the twin worries over debt and deficit driving precious metals higher. This week, accompanied by the re-emergence of the "commodity currency logic," precious metals again showed relative strength, while US Treasuries saw some "selling" – the 10-year Treasury yield climbed back to 4.7%, and precious metals also moved higher in tandem with Treasury yields. From the perspective of capital and fundamental resonance, market positioning sentiment and central bank gold purchases provided bottom support. The underlying logic of global central banks' continuous normalization of gold purchases remained unchanged. The PBOC increased gold holdings for 21 consecutive months, with monthly purchases of about 20 mt, creating sentiment resonance in the market. "Stagflation logic" rose further, boosting precious metals. Last week, US non-farm payrolls data showed negative growth, and the AI narrative still faced negative impacts. Monday's news showed Nvidia collaborating with Wall Street giants to advance an AI infrastructure plan worth $500 billion. This further triggered market interpretation of the AI logic and concerns over debt risks, causing US stocks to decline, and economic expectations decreased compared with earlier periods. The geopolitical situation remained volatile. Iran published a "preliminary plan for the management of the Strait of Hormuz" with very strict conditions, restricting US and Israeli vessels, imposing transport limits on some countries, and possible penalties for rule violations. The rebound in oil prices drove inflation expectations higher, US Treasury yields rebounded, and inflation risks increased. Last week, precious metals saw a sharp rebound in sentiment following a period of significant suppression, with the long-term logic of drifting higher continuing on Monday. Going forward, attention should be paid to USD/JPY exchange rate fluctuations; geopolitical developments and whether this week's US CPI data show breakout momentum to the upside. Relatively speaking, gold’s support is more stable than silver’s, while silver exhibits greater elasticity. Scott Rubner, strategist at Citadel Securities, recommended for the first time in 2026 that investors allocate to structural gold positions, and said the precious metals market is forming “one of the most attractive rally opportunities in months.” Rubner believes that gold and silver are seeing multiple tailwinds at the same time, including a shift in Fed policy expectations, continued central bank gold purchases, quantitative funds remaining in a net short position, bullish signals from the options market, and a possible return of retail funds previously drawn to the AI trading frenzy. In his view, a rare confluence of multiple factors is taking shape, and the precious metals market may enter a new phase of upside. UBS: expects gold prices to rise to $5,000/oz in H1 2027. Gold prices may remain relatively volatile in the near term. Matt Simpson, senior analyst at StoneX, said that improving prospects for peace in the Middle East lowered market inflation expectations, driving gold prices further higher from the weeks-long consolidation range above $4,000. The US Labor Department will release the non-farm payrolls report tonight. Simpson added: “Regardless of the non-farm payrolls data, $4,000 has proven to be a solid support level—I suspect the bulls are waiting for a pullback to seize the opportunity and push gold back to $4,600. The non-farm payrolls data may bring some short-term fluctuations, but the price action has already signaled the direction, and gold appears to want to move higher.” World Gold Council: In July, positive momentum factors offset negative risk factors, leaving gold prices flat for the month. Looking ahead, a second wave of high inflation similar to the late 1970s cannot be ruled out. However, this does not by itself mean gold will rally significantly; it depends on real interest rates, the US dollar, growth expectations, Asian investor demand, and how central banks respond. Kelvin Wong, senior market analyst at OANDA, said: “The link between gold and oil prices remains, because oil prices have a huge impact on inflationary pressures in the global economy. If we can see a clear roadmap for further de-escalation in the (Middle East) situation, gold prices could continue to rise.” (Jinshi Data APP) A CITIC Securities research report said that since the beginning of this year, gold prices shot up and then quickly fell, but the bank believes gold is still in a major bull market, with reasons including the accelerating expansion of the US fiscal deficit, geopolitical rifts under deglobalization that are hard to heal, and continued gold purchases by global central banks providing a floor. Therefore, we believe that the current gold price decline is only a temporary correction within a bull market. The current pullback magnitude has approached historical extremes, and the area around $4,000/oz is likely the bottom of this cycle. Looking ahead, the impact of the Strait of Hormuz situation on gold prices is expected to shift from suppressing to boosting, the US Fed's monetary policy may be more optimistic than market expectations, and combined with the surge in US military spending pushing up the deficit, gold prices are expected to return to an upward channel within the year. Everbright Futures' outlook for August: Gold's short-term trend depends on the evolution of the US-Iran situation. If the conflict persists or spills over and expands, market sentiment may weaken again, and under liquidity risk expectations, gold prices may continue to underperform; however, if there is a substantive breakthrough in negotiations, gold prices may stabilize in the short term and stage a rebound-repair trend, at which point if both domestic and external financial markets show a synchronous recovery, this can be further confirmed. However, it can be expected that, supported by central banks' rigid buying and allocation demand, even if there is another pullback, the room for decline will be relatively limited. Additionally, at the Jackson Hole global central bank symposium at the end of August, Warsh may outline the medium-term policy framework, and before that, the US CPI data on the 12th will be a key validation indicator. Overall, gold may present a bottom-solidifying and sentiment-repair phase, and we are cautiously optimistic. The core risk lies in the US-Iran conflict again causing oil prices to climb above $90/oz, US inflation data rebounding significantly beyond expectations, and the rising probability of a September rate hike continuing to suppress market sentiment. However, judging from the performance of financial markets outside China and oil prices, neither supports a full-scale escalation of the US-Iran conflict. A Reuters survey shows that after gold prices pulled back sharply from the record high in January, analysts cut their gold price forecasts for the first time since the end of 2023, but most still expect central bank buying and concerns about fiscal sustainability to provide support. In the survey of 29 analysts and traders conducted over the past three weeks, the median forecast for gold prices in 2026 is $4,509 per ounce. This figure is lower than $4,916 three months ago and marks the first downward revision in 11 quarters. The average forecast price for 2027 is $4,610, compared with $5,100 in the previous survey. Gold prices hit an all-time high of $5,595 per ounce in January, but in the second quarter, as the Iran war intensified energy inflation and pushed up rate hike expectations, prices suffered a sharp pullback, marking the worst quarterly performance since 2013. Since the outbreak of the war, spot gold has fallen about 22%. (Jin10 Data APP) ING analysts Warren Patterson and Ewa Manthey noted that gold prices rose on Monday, as a sharp drop in oil prices eased inflation concerns and pressured the US dollar and Treasury yields. Oil prices slumped sharply on Monday, easing inflation worries and the prospect of further monetary tightening. The move came on the heels of a pause in US-Iran hostilities. The decline in oil also weighed on the US dollar and US Treasury yields, improving the outlook for non-yielding assets ahead of this week’s Fed meeting. Markets are now focused on the Fed and upcoming US inflation data for further cues on the rate outlook. If yields remain suppressed, gold should continue to find support near current levels. However, any hawkish surprise from the Fed could cap further upside room in the near term. Commerzbank cut its year-end gold price forecast to $4,500 per troy ounce. It now sees platinum at $2,000 per troy ounce at the end of the year, down from an earlier forecast of $2,100. Citi said its base case shows India’s gold imports will stay sluggish in the third quarter, even though the third quarter is historically a seasonal stockpiling peak. The reasons are ample scrap supply, cautious consumer sentiment, and local price discounts that are curbing fresh import demand. Nonetheless, Citi kept its 0–3 month short-term gold target at $4,500. The bank said this target assumes an easing of tensions in the Strait of Hormuz and a shift to a less hawkish Fed; numerous short-term risks could still cause gold to test lower again, including a major re-escalation, AI-driven de-risking, and a persistently hawkish Fed. Analysts at ANZ Research said in a note that physical gold demand and central bank purchases are underpinning the gold market. They added that while prices face short-term headwinds from Fed tightening expectations and a strong US dollar, gold investment positioning looks thin after months of outflows from exchange-traded funds, suggesting further downside could be limited. High interest rates typically weigh on non-yielding assets like gold. (Zhith Finance) Goldman Sachs said that despite pressure from tighter Fed expectations, central bank buying is expected to provide a floor for gold. Demand remains strong; the bank estimates central banks bought 81 mt in May, with a three-month average of 67 mt per month, well above the pre-2022 average of 17 mt. “We believe the trend of central banks adding to gold holdings will persist for years as they diversify reserves to hedge against geopolitical and financial risks,” Goldman analysts said. The bank forecasts monthly central bank purchases will average 50 mt this year and 40 mt next year. (Jinshi Data APP) Kim Soojin, an analyst at MUFG, said: “Recent price action suggests markets are placing more weight on the likelihood that US interest rates will stay high for longer than on gold’s traditional safe-haven demand.”"This leaves gold vulnerable to pressure unless geopolitical risks further translate into a broad deterioration in financial market sentiment.” (Jin10 Data APP) Asset manager Fidelity International said it plans to rebuild the gold positions it reduced earlier this year at an appropriate time in the future, believing that gold's long-term drivers remain robust. Ian Samson, multi-asset portfolio manager at Fidelity International, recently said, “We plan to rebuild our gold position; the question is only about timing.” He said that from January to February this year he reduced his gold allocation to neutral, at a time when gold's multi-year bull market suddenly ended. Samson expects the gold market to re-enter a bull market at some point in 2027. Only if “governments re-embrace fiscal discipline and central banks truly commit to pushing inflation back down” would the case for returning to a bull market be undermined, “but I don’t think we are in that world right now.” Samson also noted that continued central bank gold purchases — a key driver of the previous bull market — will continue to support gold prices. A research report from Guoxin Securities shows: After a deep pullback in H1, gold prices near $4,000 are gradually showing signs of a bottom, awaiting only event catalysts to drive a rally. It suggests building positions in tranches on dips near $4,000 and avoiding chasing highs. Core allocation logic: First, valuations are at historical lows, offering a notable margin of safety. After the deep pullback in H1, valuations of gold mining companies have dropped significantly from the start of the year to low levels, providing high odds. Going forward, apart from a valuation repair rally, there is potential to also capture the price elasticity from rising gold prices. Second, earnings elasticity is a significant advantage. Gold stocks act as an amplifier of gold prices — mining costs are rigid, so higher gold prices translate directly into profit growth, and earnings elasticity far exceeds the gold price increase itself. A research report from Huayuan Securities points out: Over the medium term, the market's core trading logic has anchored on the pricing chain of “inflation stickiness and resilience exceeding expectations → prolonged period of high Fed rates → repeated flare-ups of rate hike expectations within the year.” Gold’s pricing anchor remains dominated by real US Treasury yields and the US dollar index, and the overall market is likely to continue consolidating on a subdued note. Currently, Middle East ceasefire negotiations are mired in repeated wrangling, with the two sides holding significant differences on core demands such as withdrawal arrangements, nuclear facility verification mechanisms, and control over the Strait of Hormuz shipping lane as well as transit fee rules. The recurrent nature of geopolitical conflicts continues to unsettle global crude oil supply expectations, and upside risks to energy prices could further entrench inflation stickiness, in turn supporting the Fed’s tightening stance. Meanwhile, the concurrent rise in the US dollar index and US Treasury yields is creating a double drag, and with gold’s safe-haven attribute temporarily giving way to interest-rate pricing logic, upside room for gold prices is likely to remain constrained. Key events to watch over the next two weeks include: 1) developments in the Middle East conflict and the navigation situation in the Strait of Hormuz; 2) the Fed's interest rate decision to be released on July 30; 3) the US PCE for June to be released on July 30. In the long term, gold's bullish logic has not weakened but rather strengthened amid shifts in global macro and geopolitical landscapes. 1) Constraints from US fiscal deficits, debt expansion, rising trade protectionism, and intensifying major-power rivalry are undermining the stability of the dollar's credit anchor, driving a reallocation of global reserve assets toward diversification. Gold is gradually evolving into a key asset for hedging sovereign credit risks, geopolitical fragmentation risks, and risks from the restructuring of the global monetary system. 2) Continued gold purchases by global central banks are still providing solid bottom support for gold prices, and the PBOC's sustained purchases further validate the official sector's long-term allocation demand. 3) The late stage of the US economic cycle faces multiple constraints from high interest rates, credit contraction, and slowing growth. Looking ahead, whether the Fed cuts interest rates due to economic slowdown or is forced to maintain high rates for longer due to sticky inflation, gold holds strong long-term allocation value: the former supports a decline in real interest rates, while the latter reinforces demand for safe-haven and credit-risk hedging. Overall, gold remains in a favorable window over the medium and long term, with its price center expected to continue moving higher amid the reshaping of global macro and geopolitical landscapes. Recommended reading: