[SMM Daily Commentary: Silver Prices Retreat After Rapid Rise, Spot Transactions Near Parity] SMM, August 12: Cooling rate hike expectations and a weaker US dollar supported silver prices, but insufficient upward momentum saw them pull back, and they are expected to drift higher in the short term. Transactions in the spot market are concentrated near parity, with overall weak demand.

[Pr-Nd series: firm quotes, weak transactions; medium-heavy rare earths steady; magnetic materials slightly recover] Yesterday, influenced by the relatively firm price of Pr-Nd oxide, quotes from metal enterprises saw no significant adjustments. However, downstream purchasing attitudes remained cautious, leading to lackluster market transactions and a sluggish trading atmosphere. In the medium-heavy rare earth market, although inquiry activity remained limited, suppliers' quotes were relatively firm, and the overall market operated stably.

Jubilee Metals has received two binding offers for the outright sale of its Large Waste Project in Zambia, a major copper tailings and waste-rock resource acquired for about US$18 million last year. Both bids are reportedly at a substantial premium to the original acquisition price. Jubilee expects to select a preferred bidder and target definitive agreements within roughly two weeks, with proceeds to be redirected toward expanding its existing Zambian copper operations.

LME aluminium prices have extended their upward momentum in recent sessions. On August 10, LME cash aluminium settled at $3,327.5/mt, while the three-month contract stood at $3,320.5/mt. LME aluminium stocks fell further to 254,900 mt, continuing the sharp decline seen over recent months. Compared with 262,650 mt on August 3, LME aluminium inventories declined by 7,750 mt within a week. More notably, inventories have fallen substantially from 416,775 mt at the end of March, leaving the market with a much thinner visible inventory buffer. The latest rally has been supported by a combination of falling exchange inventories, concerns over short-term supply availability, stronger sentiment across the base metals complex and lingering geopolitical uncertainty. However, downstream demand has yet to strengthen at the same pace, suggesting that the latest rally remains more supply- and sentiment-driven than demand-led. Low LME Inventories Amplify Market Sensitivity The continued decline in exchange inventories has been one of the most direct drivers behind the recent strength in aluminium prices. LME aluminium stocks have fallen to around 255,000 mt, while inventories in China have also shown signs of destocking despite the traditional off-season. With visible stocks remaining low, the market has become increasingly sensitive to marginal changes in physical supply and demand expectations. When inventories are abundant, temporary supply disruptions can be absorbed relatively easily. However, when visible inventories fall to low levels, the market has less of a buffer against unexpected production losses, logistics disruptions or stronger-than-expected physical demand. As a result, even relatively small changes in supply expectations can generate a much larger price response. However, falling LME stocks should not automatically be interpreted as evidence of a sharp improvement in end-user consumption. Some metal may be withdrawn from LME warehouses and transferred to off-warrant storage or directly to consumers. Therefore, movements in cancelled warrants, off-warrant stocks and the LME cash-to-three-month structure remain important indicators when assessing the actual tightness of the physical market. Short-Term Supply Elasticity Remains Limited Earlier expectations were that global aluminium supply would gradually improve as disrupted Middle Eastern capacity recovered and new smelting capacity in Indonesia ramped up. While additional supply is still expected to enter the market, the pace of recovery remains an important uncertainty. Indonesia is emerging as an increasingly important source of new primary aluminium supply, while several Middle Eastern smelters are gradually restoring production. However, newly commissioned capacity requires time to reach stable operating rates, meaning additional tonnes may not immediately offset short-term supply disruptions elsewhere. China's supply response has also become less flexible than in previous cycles. Chinese primary aluminium operating capacity is already running at a high level, while the country's capacity ceiling and energy constraints limit the scope for another large wave of domestic expansion. Historically, higher aluminium prices could encourage rapid capacity additions in China, eventually bringing additional supply into the market and capping prices. The current structure is increasingly different: Higher prices → Chinese operating capacity already near high levels → incremental supply increasingly depends on overseas projects → slower short-term supply response. This structural change means that global aluminium prices may become more sensitive to supply disruptions, particularly when exchange inventories are already low. Broader Base Metals Strength Adds Momentum Aluminium's own fundamentals are not the only factor behind the recent rally. Strength in copper and other base metals has improved broader investor sentiment towards industrial metals, encouraging additional capital flows into aluminium. This has amplified the price response already created by low inventories and supply concerns. The current rally can therefore be characterised as a combination of: Low inventories + supply risk premium + stronger base metals sentiment + momentum-driven buying. This also helps explain why LME aluminium prices have risen faster than the improvement seen in some downstream physical markets. Geopolitical Risks Continue to Add a Supply Premium Geopolitical uncertainty remains another important variable for the international aluminium market. The Middle East remains a major production and export hub for primary aluminium. As a result, uncertainty surrounding regional energy infrastructure, shipping routes and the Strait of Hormuz continues to influence market expectations. Even without another major production disruption, persistent risks surrounding transportation and energy supply can keep a geopolitical premium embedded in aluminium prices. Nevertheless, this should be distinguished from an actual decline in physical production. If geopolitical tensions ease and regional logistics normalise, part of this risk premium could unwind relatively quickly. The Rally Remains More Supply-Driven Than Demand-Led Despite the sharp increase in LME aluminium prices, global aluminium consumption has yet to show a corresponding acceleration. Parts of Asia remain in the traditional seasonal slowdown, while downstream consumers continue to purchase largely on a hand-to-mouth basis. Higher aluminium prices may also discourage aggressive restocking among fabricators and end users. Therefore, SMM believes the latest rally is better characterised by: Low inventories + supply concerns + improving macro and market sentiment rather than a typical: Strong demand-led rally. This distinction will be critical in determining whether aluminium can sustain its recent gains. If physical demand begins to improve while exchange inventories remain low, prices could receive further support. However, if downstream demand remains subdued while Indonesian production ramps up and Middle Eastern supply gradually recovers, the current upward momentum may begin to weaken. Higher LME Prices Provide Support to Aluminium Scrap The rise in primary aluminium prices is also beginning to feed through to the global aluminium scrap market. Several internationally traded scrap grades, including UBC and clean 6063 extrusion scrap, are commonly priced as a percentage of LME aluminium or against an LME-based premium or discount. As a result, higher LME prices can directly lift the nominal purchase price of aluminium scrap even if the underlying percentage remains unchanged. There is also a substitution effect. As primary aluminium becomes more expensive, the economic value of using recycled aluminium increases. Producers may seek to optimise their raw-material mix by increasing scrap consumption where technically possible, providing additional support to scrap demand. This effect may be particularly significant for high-quality scrap with stable chemical composition, low attachments and limited contamination. However, aluminium scrap prices may not rise at the same pace as LME aluminium. Demand for secondary aluminium alloys remains relatively cautious in parts of Southeast Asia. ADC12 buyers in Malaysia and Thailand continue to purchase mainly according to immediate requirements. If LME and scrap prices continue rising while ADC12 prices fail to move higher at the same pace, secondary aluminium producers could face further margin compression. This, in turn, would limit smelters' willingness to accept higher scrap prices. Therefore, while higher LME aluminium prices are expected to provide both cost and substitution support to aluminium scrap, the extent of the increase will continue to depend on downstream secondary aluminium demand. Scrap Is Becoming an Increasingly Strategic Raw Material The relationship between primary aluminium and scrap is also undergoing a longer-term structural change. Growth in recycled aluminium production is expected to outpace primary aluminium over the coming decades as producers seek to reduce energy consumption and carbon emissions while increasing recycled content. Historically, much of the aluminium industry's recycling activity was concentrated on pre-consumer scrap generated during manufacturing. This material already has relatively high recovery rates. The next major source of growth, however, is expected to come from post-consumer scrap. As larger volumes of aluminium used in vehicles, buildings, packaging, machinery, solar equipment and other applications reach the end of their useful lives, the global pool of recoverable aluminium will continue to expand. This means aluminium scrap is gradually shifting from being viewed primarily as a supplementary raw material towards becoming a more strategic feedstock for the aluminium industry. As recycling capacity expands globally, competition for high-quality, traceable and easily recyclable post-consumer scrap could intensify, potentially strengthening the relationship between primary aluminium prices and premium scrap values. Outlook: Can Aluminium Hold Above $3,300/mt? Looking ahead, three factors will be particularly important. First, the market will continue to monitor whether LME and Chinese inventories decline further. Continued destocking would reinforce concerns over limited visible supply and provide further support to prices. Second, the pace of supply recovery will remain critical. Faster-than-expected production recovery in the Middle East or stronger output growth from newly commissioned Indonesian capacity could gradually ease current supply concerns. Third, and most importantly, the market will need confirmation from physical demand. If downstream orders and restocking activity strengthen, low inventories could amplify the impact of improving consumption and provide further upside support. Conversely, if end-user demand remains weak, elevated aluminium prices themselves may begin to suppress purchasing activity. SMM believes the recent LME aluminium rally has been primarily driven by falling exchange inventories, limited short-term supply elasticity, geopolitical uncertainty and stronger sentiment across the base metals complex. Low visible inventories are likely to continue providing support in the near term, but downstream demand has yet to fully confirm the strength of the rally. As overseas production gradually recovers and new capacity comes online, the sustainability of aluminium prices above $3,300/mt will increasingly depend on whether physical demand can catch up with the recent move in futures prices.

SMM Morning Meeting Summary: Overnight LME copper opened at $14,208/mt, touched a high of $14,218/mt in early fluctuations, then drifted lower all the way to $14,142/mt near the end of the session, and finally closed at $14,153/mt, up 0.23%. Trading volume was 15,700 lots, and open interest stood at 261,000 lots, an increase of 2,675 lots from the previous trading day, indicating an increase in bearish positions. Overnight, the most-traded SHFE copper 2609 contract opened at 108,200 yuan/mt, with the price center moving up to touch 108,320 yuan/mt in early trading, then drifting lower to a low of 107,900 yuan/mt, before closing at 108,000 yuan/mt, up 0.04%. Trading volume reached 21,000 lots, and open interest was 213,000 lots, a decrease of 1,714 lots from the previous trading day, indicating a decrease in bearish positions.

SMM News, August 12: Metals Market: Overnight, base metals on both domestic and overseas markets showed mixed performance. SHFE lead closed flat at 15,860 yuan/mt, LME aluminum rose 0.82%, SHFE aluminum gained 0.58%, and other metals saw slight fluctuations in their % changes. The most-traded alumina contract rose 0.93%, and cast aluminum ticked up 0.42%. In the ferrous metals sector overnight, all contracts gained except stainless steel. Stainless steel fell 0.07%, iron ore rose 0.76%, rebar and hot-rolled coil both edged up within 0.5%, while coking coal and coke gained 1.64% and 1.01%, respectively. In precious metals, COMEX gold rose 0.18% overnight, while COMEX silver fell 0.63%. On the domestic front, SHFE gold dropped 0.28% and SHFE silver slid 0.42%. Overnight closing prices as of 6:38 am, August 12: Macro Front China: [Zhengzhou Adjusts Housing Provident Fund Contribution Base] On August 11, the Zhengzhou Housing Provident Fund Management Center issued a notice on adjusting the 2026 housing provident fund contribution base. The notice specified that Zhengzhou's 2026 contribution base would be adjusted starting July 1, 2026. Both employee and employer contribution ratios must be no lower than 5% of an employee's average monthly salary from the previous year, and no higher than 12%. Employers may independently determine the ratio within the 5%-12% range based on their actual circumstances. (From Wall Street CN APP) [Weihai, Shandong Optimizes and Adjusts Housing Provident Fund Usage Policies] The Weihai Housing Provident Fund Management Center in Shandong Province has optimized and adjusted its policies. The maximum loan amount for a single depositor was raised from 600,000 to 800,000 yuan, and for dual depositors from 1 million to 1.2 million yuan. After stacking multiple preferential policies, the ceiling reaches up to 1.6 million yuan for a single depositor and 2 million yuan for dual depositors. (From Wall Street CN APP) [Shanghai Aims to Expand Software and IT Services Industry to 4 Trillion Yuan by 2030] Shanghai issued the "15th Five-Year Plan for the Development of Shanghai's Software and Information Services Industry." By 2030, the city aims to build the industry into a "power source" for economic growth, a "main arena" for AI-enabled applications, and a "bridgehead" for global competition, with the following key targets: total industry scale is expected to reach 4 trillion yuan, and industry added value to exceed 1.1 trillion yuan. Industry quality and efficiency will further improve, with a batch of breakthrough achievements in key areas such as artificial intelligence and critical software. The number of enterprises with revenue exceeding 10 billion yuan is projected to rise to 35, fostering a group of high-quality enterprises with industrial ecosystem dominance and emerging firms with potential leading influence. The industry structure will be further optimized, with the proportion of high-end software, digital content, and digital-intelligent services increasing, and the formation of several internationally competitive industrial bases and regional clusters. (From Wall Street CN APP) US Dollar: As of the overnight close, the US dollar index rose 0.01% to 99.82. Business Insider analyst William Edward noted two possible scenarios following the Wednesday CPI release: ① If inflation runs hot, stocks may fall. This could be the worst-case market scenario: stagflation. Investors had hoped the weak July jobs data would provide the US Fed with the rationale to cut interest rates. Hence, stocks surged sharply on Friday—bad news on the jobs front was actually good news for markets. However, given Warsh's outspokenness on curbing inflation, a hot CPI report could prompt him to raise interest rates even amid a soft employment outlook. In any case, it is hard to imagine stocks continuing to rally if inflation comes in higher than expected. Unlike employment data, bad news on CPI is truly bad news. ② If inflation eases, stocks could soar. While inflation is unlikely to drop below the Fed's 2% target, investors would likely welcome any reading below 3%, seeing it as a sign that CPI growth is slowing down, allowing the Fed to cut interest rates comfortably—or at least hold steady. Even the latter case alone could unwind the rate-hike expectations priced in for later this year, letting investors breathe a little easier. (Jin10 Data APP) Wall Street Journal reporter Nick Timiraos noted that the market will focus heavily on the MoM change in the July inflation data due Wednesday, as a growing number of FOMC members say the inflation readings over the coming months will determine whether their forecast of "inflation falling back to 2% over the next two years" remains achievable without further rate hikes. However, new Fed Chair Warsh has recently dismissed this framework that ties policy-sensitive forecast revisions closely to high-frequency data. He previously stated he sees little practical value in the Fed's current "data-dependent" approach. Nick also mentioned that part of the working group established by Warsh seems aimed at helping build a framework to replace the old one. But until a new framework is clearly defined, the old one still appears to be operating. (Jin10 Data APP) According to CME "Fed Watch": the probability of the US Fed holding rates unchanged in September stands at 52.0%, while the probability of a cumulative 25bp rate hike is 48.0%. For October, the probability of holding rates unchanged is 38.7%, a cumulative 25bp hike 49.0%, and a cumulative 50bp hike 12.2%. (Jin10 Data APP) Bank of America analysts believe that if the US CPI report surprises to the downside, the US dollar could see a relatively stronger reaction, as it would "essentially rule out" a Fed rate hike in September and challenge current market pricing. Analysts including Alex Cohen, Stephen Juneau, and Meghan Swiber wrote in a Tuesday note: "Following the clearly soft June CPI data, we expect the July CPI to be more in line with recent trends, with headline CPI up 0.1% MoM and core CPI up 0.2% MoM." (From Wall Street CN APP) Macro: Today, data including the US July unadjusted CPI YoY, US July seasonally adjusted CPI MoM, US July seasonally adjusted core CPI MoM, US July unadjusted core CPI YoY, and Germany July final CPI MoM will be released. In addition, Tencent will hold its Q2 earnings conference call, MSCI will announce its August index adjustment notice, EIA will publish its monthly Short-Term Energy Outlook, IEA will release its monthly crude oil market report, and OPEC will release its monthly crude oil market report (exact release time TBD, generally around 18-21 Beijing time). Crude Oil: Overnight, oil prices on both sides of the Atlantic rose, with WTI up 1.34% and Brent up 1.8%. Doubts over the prospect of a potential peace deal between the US and Iran fueled concerns that Middle East supply disruptions will persist. The US now expects that the about 600,000 bbl/day of oil supply disruptions caused by the US-Iran war will last until the end of next year, as the conflict continues to impede oil shipments through the critical Strait of Hormuz. According to the EIA's Short-Term Energy Outlook, an average of about 4.9 million bbl/day of oil were transported through the Strait of Hormuz in Q2 this year. That compares with a daily average of 21.6 million barrels in Q4 2025, before the US and Israel attacked Iran. As the conflict enters its sixth month, global consumers again face the risk of higher fuel prices and elevated inflation. The EIA raised its 2026 gasoline and diesel price forecasts by 3.7% and 5.4%, respectively, and lifted its 2027 retail gasoline price estimate by 6.5% from a month ago. The agency also estimated that the scale of Middle East production outages fell to around 5.5 million bbl/day in July, down from 7.5 million bbl/day in June. Outages are expected to widen again in Q3 to an average of 6.6 million bbl/day. The report assumes that recent threats against vessels carrying Saudi crude through the Bab el-Mandeb strait have not caused additional supply disruptions. If this assumption holds, the agency expects that most production and trade activities may not return to pre-war levels until early 2027. (Wall Street CN) The EIA released its Short-Term Energy Outlook (STEO): it forecasts Brent crude prices at $87/bbl in 2026 (previously $82/bbl) and $69/bbl in 2027 (previously $65/bbl). US oil production is projected at 13.8 million bbl/day in 2026 (previously 13.8 million bbl/day) and 14.2 million bbl/day in 2027 (previously 14 million bbl/day). The roughly 600,000 bbl/day of crude oil supply disruptions in the Middle East are expected to persist through the end of 2027. US LNG exports are forecast at 17.4 billion cubic feet per day in 2026 (previously 17.4 billion cubic feet per day) and 18.6 billion cubic feet per day in 2027 (previously 18.6 billion cubic feet per day). The next STEO will be released on September 9. (Wall Street CN) API data showed that last week, US API crude inventories rose by 9.072 million barrels, following a 2.69 million-barrel increase the prior week. API Cushing crude inventories rose by 157.1 barrels, after a 2.358 million-barrel increase previously. API gasoline inventories fell by 1.531 million barrels (compared with a 156,000-barrel build the prior week), while distillate inventories decreased by 596,000 barrels (versus a draw of 118,000 barrels the week before).

[SMM Express] OCBC has expanded its digital precious metals platform to allow retail investors to trade platinum and palladium bullion through its mobile app, starting from just 0.01 oz. Based on recent prices, the minimum investment is equivalent to around S$23 for platinum and S$18 for palladium, significantly lowering the entry barrier for retail participation. The move comes as investment interest in PGMs grows, with OCBC Group Research maintaining a bullish outlook and forecasting platinum above US$2,000/oz and palladium above US$1,500/oz by H1 2027. Unlike gold, PGM prices are strongly influenced by industrial demand from automotive, industrial and clean-energy applications as well as highly concentrated supply chains. The expansion could broaden the investor base for platinum and palladium, potentially supporting investment demand and market liquidity. With both metals already facing evolving supply-demand dynamics, increased retail access through digital platforms could become an additional source of demand alongside industrial consumption and institutional investment.

[SMM Express] Platinum futures climbed to around USD 1,780/oz, approaching an eight-week high as the precious metals complex strengthened. The move was supported by improving investment demand, with increased bullion holdings among Chinese institutional investors providing additional momentum as market volatility heightened. Meanwhile, AI and data-centre expansion could become a new source of PGM demand. Valterra Platinum estimates current AI-related PGM demand at around 200,000–400,000 oz annually and expects it could increase fivefold by 2030, supported by PGMs’ electrical and thermal properties. The longer-term outlook remains supported by a structural platinum market deficit and constrained mine supply, particularly from South Africa. However, sustained higher prices could encourage greater recycling and eventually place pressure on some areas of demand, leaving supply constraints and emerging technology demand as key factors to watch.

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:

Lithium Royalty Corp's acquisition of a 1.5% Goulamina royalty gives Western capital revenue linked exposure to Mali's flagship spodumene project without operating risk. But the royalty's 500,000-tonne annual volume cap sits almost exactly at Goulamina's current Phase I capacity, meaning any upside from Ganfeng's planned Phase II expansion largely bypasses the royalty holder. Lithium Royalty Corp (LRC) has entered into a definitive agreement to acquire a 1.5% Trailing Product Sales Fee (TPSF) royalty on Ganfeng Lithium's Goulamina project in Mali, purchased from Leo Lithium for A$40 million (approximately $27 million). The deal extends LRC's battery metals footprint beyond direct mine ownership, adding to an existing royalty on Ganfeng's Mariana brine project in Argentina within a broader 37-royalty portfolio. 1. Royalty Structure Caps Volume, Extends Duration : LRC's royalty entitles it to quarterly payments over a 20-year term, with the cashflow window running through August 2045. Early monetisation is confirmed: Leo Lithium received a first quarterly payment of $574,748 in Q3 2025. Crucially, payable volume is capped at 500,000 tonnes per year of spodumene a ceiling that limits LRC's exposure if Goulamina's output scales materially beyond current design capacity. 2. Production Volume and Ramp-Up Sit Close to the Cap: Goulamina's Phase I nameplate capacity is 506,000 tonnes per year of spodumene concentrate just above LRC's payable cap, meaning the royalty already captures close to its practical maximum at present output. Ganfeng has publicly indicated intent to pursue a Phase II expansion that would materially exceed current capacity, though a confirmed timeline and design capacity have not been disclosed. Any such expansion would leave royalty-linked cashflow structurally unchanged given the fixed cap. 3. Supply Status Remains Consistent Since First Shipment: Goulamina has shipped concentrate consistently since commencing exports in June 2025, with output sold under offtake arrangements to Chinese buyers holding controlling stakes in the project. 4. Logistics Add a Distinct Risk Layer : Concentrate is trucked approximately 1,000km from Goulamina to the port of Abidjan, Côte d'Ivoire, the primary export corridor, with San Pedro and Dakar serving as secondary routes. This overland logistics profile differs materially from Zimbabwe's rail-based Beira and Durban corridors, introducing distinct cost and timing exposure for Mali-origin material. Corridor Mode Distance Role Goulamina → Abidjan Overland truck ≈1,000 km Primary export route Goulamina → San Pedro Overland truck Secondary corridor Alternate loading port Goulamina → Dakar Overland truck Secondary corridor Alternate loading port 5. Ownership Structure Ties Returns to Policy Environment : Ganfeng holds 65% of Goulamina, with Mali's government holding the remaining 35% following the country's revised mining code. This ownership split ties royalty performance not only to production economics but to Mali's evolving fiscal and regulatory stance toward foreign-operated mining assets. SMM View: The royalty cap sitting almost exactly at Phase I capacity is the structural detail worth flagging for African lithium coverage: LRC gains near-full exposure to current output but stands to capture little of the incremental upside if and when Phase II lifts capacity beyond current design levels. This positions the deal as a disciplined, lower-risk way to gain Mali spodumene exposure, but one whose real return profile is bounded well below the project's potential growth trajectory. For SMM's ongoing tracker, the more actionable signals are confirmation of Ganfeng's Phase II timeline and specifications, and whether Abidjan-corridor logistics face the kind of congestion already constraining Zimbabwean concentrate flows either of which could reshape the volume and margin assumptions underlying this and future royalty-style deals in the region.