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

Affected by the sharp escalation of geopolitical tensions in the Middle East, US and Brent crude oil prices surged rapidly, with gains quickly expanding to 4%. Spot gold prices broke through $3,410 per ounce, hitting a new high since May 8. Israel has closed its airspace until further notice. Iran's state television reported that the country's air defense system is on full alert. According to CNN, Trump convened a cabinet-level meeting. The US and Iran are scheduled to hold the sixth round of nuclear talks in Oman on Sunday.

"Cut interest rates by 100 basis points!" Trump speaks out again On the evening of June 11, US President Trump posted on his social media platform "Truth Social" that the latest US CPI data showed positive results, and he called on the US Fed to cut interest rates by 1 percentage point (100 basis points). US Vice President Vance stated that the US Fed's refusal to cut interest rates was a dereliction of duty in monetary policy. Data released by the US Department of Labor showed that the full impact of Trump's across-the-board tariff hikes had not yet fully materialized, with US CPI inflation in May falling short of expectations across the board. The data indicated that the US unadjusted CPI year-on-year rate for May was 2.4%, lower than the market expectation of 2.5%; the seasonally adjusted CPI month-on-month rate for May was 0.1%, lower than the expected 0.2% and the previous value of 0.2%. Excluding food and energy costs, the core CPI rose 2.8% YoY, remaining at the lowest level since March 2021, with an expected value of 2.9% and a previous value of 2.8%; the seasonally adjusted core CPI month-on-month rate for the US in May was 0.1%, with an expected value of 0.3% and a previous value of 0.2%. The US Bureau of Labor Statistics stated that the continued weakness in energy and service prices offset the impact of price increases in other goods, while some key items originally expected to rise due to tariffs, particularly car and clothing prices, actually saw price decreases. The data showed that energy prices fell by 1% in the month, with gasoline prices dropping by 2.6%, and prices for new and used cars falling by 0.3% and 0.5%, respectively. Food prices rose by 0.3%, and housing prices also increased by 0.3%, while clothing prices unexpectedly fell by 0.4%, indicating that the cost increases brought about by tariffs had not yet been passed on to consumers. Nick Timiraos, known as the "Fed Whisperer," commented that the decline in car and clothing prices led to a lower-than-expected reading for the core CPI in May. Some forecasters had believed that these two items would show the early impact of tariffs in May. After the data release, spot gold prices continued to rise, breaking through $3,360 per ounce. The three major US stock index futures surged briefly but then fell. By the close, the S&P 500 index closed down 16.57 points, or 0.27%, at 6,022.24 points. The Dow Jones Industrial Average closed down 1.10 points, or 0.00%, at 42,865.77 points. The Nasdaq closed down 99.11 points, or 0.50%, at 19,615.88 points. The Nasdaq 100 index closed down 81.12 points, or 0.37%, at 21,860.80 points. Trump says "confidence is waning" in reaching a nuclear deal; international oil prices surge According to AFP, both the US and Iran made their latest statements on the US-Iran nuclear negotiations on June 11. US President Trump stated in an interview aired on the same day that his "confidence has waned" in reaching a nuclear deal with Iran. Meanwhile, Iran said on June 11 that if negotiations fail and a conflict breaks out between the US and Iran, it will target US military bases in the Middle East. Upon the news, the crude oil market reacted swiftly. WTI crude oil futures for July delivery closed up $3.17/bbl, a 4.88% increase, at $68.15/bbl. Brent crude oil futures for August delivery closed up $2.90/bbl, a 4.33% increase, at $69.77/bbl. What is the outlook for the cast aluminum alloy futures market? Yesterday, the most-traded AD2511 cast aluminum alloy futures contract closed at 19,400 yuan/mt, up 0.91%. Regarding the current operational logic of the cast aluminum alloy market, Xiao Yufei, head of the Nonferrous Metals Research Team at Nanhua Futures, believes that the supply surplus in the cast aluminum alloy industry will persist. The planned new capacity for domestic aluminum alloy ingots in 2024-2025 is 1.145 million mt/year. However, due to various constraints, the actual capacity that has come online is only 260,000 mt/year. It is expected that in 2025, the cast aluminum alloy industry will continue to see capacity growth but with slower commissioning. According to Xiao Yufei, the downstream consumption of cast aluminum alloy mainly flows into sectors such as transportation, machinery manufacturing, home appliances, and hardware. Among them, transportation vehicles, including cars, motorcycles, and EVs, account for over 70% of downstream demand. Therefore, the demand for cast aluminum alloy primarily depends on the performance of the automotive market. The automotive industry has generally performed well this year, with production and sales showing steady growth compared to the same period last year. However, considering that the H2 is approaching the off-season, the growth rate of cast aluminum alloy demand may slow down. In addition, aluminum scrap inventory is tight, and raw material procurement is difficult. The inability to restock in a timely manner has led to a continuous decline in the raw material inventory of secondary aluminum alloy enterprises. "Finished product inventories are at a relatively high level. Given the current loose supply situation, we believe that the inventory buildup trend of secondary aluminum alloy will persist for some time. Considering the high correlation between aluminum alloy prices and SHFE aluminum prices, spot and futures prices are more inclined towards a backwardation structure," Xiao Yufei said. Fu Ying, a nonferrous metals analyst at the Zheshang Futures Research Center, believes that the current cast aluminum alloy market is in a phase of weak supply and demand. The automotive market, a major end-use application for cast aluminum alloy, is currently in an off-season for production. Under the "produce based on sales" model of alloy enterprises, their operating rates will also decline accordingly. Meanwhile, the trend of weakening demand will become more pronounced, with both social inventory and raw material inventory showing continuous accumulation. Therefore, the spot price of cast aluminum alloy is expected to fluctuate around production costs. The first listed futures contract for cast aluminum alloy was AD2511, with a delivery month of November. According to Chen Xinyi, the head of the Non-Ferrous Metals and New Energy Team at Wuchan Zhongda Futures, the aluminum scrap recycling system is relatively "informal," which leads to a decrease in aluminum scrap recycling volume during holidays. Typically, aluminum scrap supply is relatively tight in Q4, and its prices hold up well compared to primary aluminum. From a demand perspective, ADC12 demand exhibits significant seasonal characteristics, with peak seasons generally occurring from September to January of the following year, and November being a peak consumption month. Therefore, the inter-month price spreads for the AD2511, AD2512, and AD2601 contracts are currently in a contango state. "Before the listing of cast aluminum alloy futures, spot market reference prices were mostly anchored to the Baotai price," Chen Xinyi said. Currently, the Baotai quote for ADC12 is 19,400 yuan/mt. Considering that some registered brands are priced at a discount to the Baotai price and the slim profit margins of alloy enterprises, companies have little incentive to price and sell futures contracts in advance. Currently, the downside room for aluminum scrap prices, which are closely linked to aluminum prices, is limited. This keeps ADC12 prices relatively strong in the short term, with the main operating range being 19,000-19,600 yuan/mt. In practice, according to Chen Xinyi, the ADC12-A00 price spread exhibits significant seasonal characteristics, weakening in Q2 and strengthening in Q3. Affected by policies, despite a capacity utilisation rate as high as 97%, electrolytic aluminum continues to destock, while the supply and demand of secondary aluminum show a surplus, with the current capacity utilisation rate being less than 50%. When the ADC12-A00 price spread is at historically high levels, the substitution effect of primary aluminum for aluminum scrap gradually becomes apparent. Some companies may consider adjusting their raw material ratios, and increased demand for electrolytic aluminum supports price increases, thereby driving the ADC12-A00 price spread to revert. In the short term, Fu Ying stated that cast aluminum alloy futures prices are expected to mainly follow aluminum price fluctuations, with cost support existing below. On the one hand, the most-traded cast aluminum alloy futures contract, AD2511, is still far from its delivery date, and the price trend of cast aluminum alloy is consistent with that of aluminum. The current low inventory and continuous destocking of electrolytic aluminum provide support for aluminum prices. On the other hand, the supply and demand of aluminum scrap are relatively tight, with aluminum scrap costs accounting for nearly 90% of the cost of cast aluminum alloy. The firmness of aluminum scrap prices supports ADC12 prices. However, affected by the traditional off-season, the upside room for cast aluminum alloy prices is also limited. Additionally, under the off-season consumption, the demand for selling hedging by cast aluminum alloy producers is high, which will suppress futures prices. Regarding the key points to be monitored subsequently, Fu Ying believes they mainly include changes in aluminum scrap supply, downstream demand, and the changes and impacts of spot pricing models after the listing of futures. Aluminum scrap supply determines the cost trend of cast aluminum alloy, while downstream demand affects the price spread fluctuations between cast aluminum alloy and primary aluminum. Stronger demand will drive the price spread between the two to revert. Currently, the spot price of cast aluminum alloy mainly refers to the quotes on information websites and the "enterprise quotes + premiums and discounts" model, lacking a relatively open and transparent market mechanism. After the listing of cast aluminum alloy futures, the number of market participants will gradually increase, which will help optimize the spot pricing model.

After a clear upward breakout in technical patterns, the precious metals market witnessed a spectacular scene of "silver and platinum soaring together" on Thursday... On one hand, spot silver prices surged by 4.5% during Thursday's trading session, reaching a high of $36.06 per ounce, the highest level since February 2012. On the other hand, spot platinum prices soared by 4.8% overnight and further refreshed their highest level since March 2022 at $1,152 per ounce during the Asian session on Friday. It can be said that these two precious metal commodities, which were unremarkable during the gold rally earlier this year, now seem to be simultaneously embarking on a catch-up rally... In response, industry insiders stated that the simultaneous surge in silver and platinum appears to reflect investors' growing demand for precious metals used in industrial applications. Meanwhile, with gold prices already hovering near a high of $3,400, other precious metal varieties that had lagged behind in gains are now coming more into the sight of physical buyers and investors. Nicky Shiels, Head of Metal Strategy at MKS PAMP SA, pointed out in Thursday's report that the enhanced technical momentum and improved fundamentals across the precious metals sector have provided a boost to these metals. Strong physical silver demand from India and the recovery of platinum demand in China have further strengthened the upward trend. Silver—and sometimes platinum as well—often moves in tandem with gold, which has long been regarded as a timeless safe haven during periods of geopolitical turmoil. Over the past 12 months, spot gold prices have surged by more than 40%, as the escalation of tariff wars initiated by the US has enhanced its safe-haven appeal, and central banks around the world have continued to make substantial purchases. The gains in silver and platinum over the past year have actually fallen far short of those in gold—up 19% and 13% respectively as of Thursday. This scenario is naturally related to their far weaker safe-haven attributes compared to gold. However, in the industrial sector, they are not without value to explore. Silver is a key material for solar panels, while platinum is used in automotive catalytic converters and laboratory equipment. After years of undersupply, both metals markets will still face a supply deficit this year. Catch-up rally begins MKS PAMP's Shiels stated that maintaining silver prices above $35 would be a "critical turning point," and if sustained, it should reignite the interest of retail investors who have been on the sidelines. She further added that given the high leasing rates indicating a tightening market, a potential recovery in demand for platinum ETFs could trigger a speculative rally. According to industry-compiled data, the open interest in platinum ETFs is currently showing signs of a rebound, having increased by more than 3% since mid-May. Meanwhile, inflows into silver ETFs have also been growing continuously since February, with cumulative open interest climbing by nearly 8%. Alexander Zumpfe, a senior trader at Germany's gold refiner Heraeus Group, stated that the recent rally in silver may be driven by a combination of technical momentum, improved fundamentals, and rising investor interest. He pointed out, "After lagging behind gold for several weeks, silver is now catching up, indicating that momentum-driven investors have reignited their interest in silver." Maria Smirnova, senior portfolio manager and chief investment officer at Sprott Asset Management, also noted, "This breakout in silver has been brewing for some time. Silver has made multiple attempts to breach the $35 mark in recent months, making this breakout significant. If changes in technical factors further drive physical investors to buy in the coming days, silver prices could rise rapidly and substantially." Investors are also currently focusing on the US May non-farm payrolls report, which will be released on Friday evening. The poor performance of the US ADP employment data and initial jobless claims on Wednesday and Thursday has strengthened market expectations that the US Fed will cut interest rates at least twice this year. A decline in borrowing costs typically benefits the performance of these precious metals.

In this historic bull market for gold, the "gold-buying spree" by central banks worldwide is undoubtedly a key driving force behind the rise in gold prices. Although the true scale of gold purchases by these "central bank moms" remains a mystery, few industry insiders believe they will stop in the future... According to estimates by Goldman Sachs analysts, central banks globally are currently adding roughly 80 mt of gold each month—valued at approximately $8.5 billion at current prices. Most of these purchases are conducted privately and secretly. Data from the World Gold Council also leads to a similar conclusion: Central banks and sovereign wealth funds are currently "sweeping up" approximately 1,000 mt of gold annually, equivalent to at least a quarter of the world's annual gold mine production. A survey conducted by HSBC in January this year among 72 central banks revealed that more than one-third of the respondents plan to buy more gold in 2025, with none intending to sell. During periods of geopolitical tension, gold often serves as a safe haven. Although this buying spree began before US President Trump launched a global trade war, it still underscores the growing concerns of some countries about over-reliance on the US dollar, the world's dominant reserve currency. The scorching rally in gold prices over the past few years has only further increased the allure of the precious metal. A prime example is that, the National Bank of Kazakhstan was among the largest gold sellers among global central banks last year. However, according to Governor Daniyar Akishev of the National Bank of Kazakhstan, the bank has reverted to being a net buyer this year and plans to continue increasing its reserves. Akishev stated, "Gold is often seen as a safe-haven asset, but in the current circumstances, considering all the panic, tariffs, and reshaping of global trade, it has also become an investment asset." Is there a "shortcut" to $6,000? For Goldman Sachs, the belief that the gold-buying spree by central banks will continue is the main reason for the bank's persistence in its forecast of $3,700 per ounce by the end of the year. As of Wednesday's Asian session, spot gold prices were recently trading near $3,365, not particularly far from the historical peak of $3,500 set in April. From the perspective of global central bank activities, after the Russia-Ukraine conflict in 2022 led the US and its Western allies to freeze Russia's foreign exchange reserves, the pace of gold purchases by "central bank moms" worldwide nearly doubled. This move to "weaponize finance" has prompted many central banks to consider diversifying their reserves, while the renewed threat of inflation and speculation that the US government may not be as accommodating to foreign creditors have further highlighted gold's appeal to policymakers. Adam Glapiński, governor of the National Bank of Poland, one of the largest gold buyers in recent years, said, "Gold is the safest reserve asset. It has no direct link to the economic policies of any country, can withstand crises, and can maintain its real value over the long term." Massimiliano Castelli, managing director at UBS Asset Management, which provides strategic advice to many central banks, said, "In addition to the risk of sanctions, earlier this year, speculation that the Trump administration would deliberately pursue a policy of devaluing the US dollar, as well as threats to the independence of the US Fed, have made some institutions uneasy." Castelli said, "Given the threats to the US dollar, its share in international reserves may face a sustained decline—perhaps slightly faster than the pace we have seen in the past few years, as central banks are diversifying into other currencies and gold." That said, with limited issuance of bonds denominated in other currencies, central banks have limited options when seeking diversification. However, the growing inflow of funds into gold has become an inevitable trend and may further support the rally that began in late 2022, when gold prices doubled. According to JPMorgan Chase, even if only 0.5% of foreign-held US assets are shifted into gold in the coming years, it would be enough to drive gold to $6,000 per ounce by 2029. Evy Hambro, head of thematic and sector investing at BlackRock, said, "The gold market is large, but the US dollar market is even larger. Even a small amount of funds flowing from the US dollar market into gold would have a significant impact."

This week, Hong Kong stocks generally maintained their strong momentum, with the weekly performances of the three major indices varying. By the close of trading, the Hang Seng Index (HSI) had risen by 1.10% week-on-week to close at 23,601.26 points; the Hang Seng Tech Index had fallen by 0.65% week-on-week to close at 5,246.87 points; and the Hang Seng China Enterprises Index (HSCEI) had risen by 1.36% week-on-week to close at 8,583.86 points. Note: Weekly performance of the HSI since the beginning of the year Notably, the HSI has achieved seven consecutive weeks of gains. Medium and long-term optimism becomes consensus among institutions Huatai Securities pointed out that despite uncertainties surrounding tariff issues and potential short-term disruptions due to high US Treasury yields, the risk premium of Hong Kong stocks has significantly pulled back, and the easing of tail risks in the economy will drive up the market's center of gravity. Morgan Stanley recently raised its target for the HSI to 24,500 points by 2026, emphasizing the valuation reshaping opportunities brought about by structural improvements in the Chinese stock market. However, CICC cautioned about short-term risks, believing that current market sentiment has recovered to a cyclical high, and the marginal effect of policy efforts may weaken. 3SBIO leads the market gains this week In the list of weekly gainers, 3SBIO (01530.HK) led the market with a weekly gain of 57.38%. The pharmaceutical company's collaboration agreement with Pfizer on a PD-1/VEGF bispecific antibody drug set a new industry record, with an upfront payment plus milestone payments totaling up to $6 billion, creating a new benchmark for out-licensing of domestically developed innovative drugs. Another pharmaceutical stock that performed well was ImmuneOnco Biopharmaceuticals (01541.HK), which rose by over 36% week-on-week. The company recently announced clinical progress, including the successful enrollment of three patients in the Phase Ib clinical trial of its first dual-target large molecule drug for autoimmune diseases, Amurevup alpha (CD47xCD20, IMM0306), targeting neuromyelitis optica spectrum disorder (NMOSD), with all patients receiving the drug smoothly. In addition, Alibaba Pictures surged by over 50% this week. The company recently announced its renaming to "Damai Entertainment Holdings Limited," focusing on the layout of the offline entertainment ecosystem and enhancing its brand recognition in the overall entertainment market. Subsequently, Huatai Securities and Citi raised their target prices to HK$0.75 and HK$0.92, respectively. Both Datang Gold and Lingbao Gold benefited from the trend of international gold prices, rising by 28.13% and 27.44%, respectively. In terms of news, COMEX gold continued to strengthen after breaking through $3,300 this week and is currently trading near $3,353. Technical pullback and signs of capital rotation emerge in the market on Friday Despite maintaining the recent upward trend overall this week, today's performance was not ideal. By the close of trading on Friday, the HSI had risen by 0.24%, the Hang Seng Tech Index had fallen by 0.09%, and the HSCEI had risen by 0.31%. The futures market showed significant divergence, with the pharmaceutical and gold sectors bucking the trend to strengthen, while the real estate sector was weighed down by development and investment data, and tea beverage stocks saw a correction as investors took profits. Pharmaceutical stocks were boosted by multiple positive factors. By the close of trading, Hengrui Medicine (01276.HK), Luye Pharma (02186.HK), and Innovent Biologics (01801.HK) had risen by 25.20%, 5.74%, and 4.18%, respectively. Note: Performance of pharmaceutical stocks In terms of news, pharmaceutical stocks have recently been receiving a series of positive developments, including the aforementioned agreement between Pfizer and 3SBio, as well as the strong debut performance of Hengrui Medicine on its first day of trading in Hong Kong. Zhongtai Securities stated that since 2024, despite monthly fluctuations in overseas CPI data, there is an expectation of a gradual shift towards interest rate cuts, with an anticipated improvement in investment and financing conditions. It is expected that integrated CRO/CDMO companies primarily reliant on overseas revenue, as well as domestic preclinical CRO companies, will see opportunities for valuation recovery. The first-day performance of Hengrui Medicine's H shares attracted significant market attention, with the stock surging over 30% during intraday trading. The company received over 450 times oversubscription during its IPO phase, highlighting the global competitiveness of Chinese innovative pharmaceutical companies as international institutions scrambled to acquire shares. The safe-haven attribute of the gold sector became prominent. By the close of trading, Lingbao Gold (03330.HK), Chifeng Jilong Gold Mining (06693.HK), and Zijin Mining (01815.HK) had risen by 9.16%, 3.28%, and 2.63%, respectively. Note: Performance of gold stocks On the news front, spot gold prices continued to rise, currently standing above $3,350 per ounce. CITIC Futures pointed out that the passage of Trump's "Tax Cuts and Jobs Act" through the House of Representatives has increased the likelihood of large-scale tax cuts being implemented, with expectations rising for a continued climb in the US deficit rate. This aligns with Moody's downgrade of the US credit rating, as the disorderly expansion of debt leads to a gradual contraction in the US dollar's creditworthiness, providing solid support for the medium and long-term bullish outlook on gold. Louise Street, Senior Market Analyst at the World Gold Council, stated that the macroeconomic situation remains difficult to predict, and this uncertainty may bring further upside potential to gold prices. As the turbulent situation persists, the demand for gold as a safe-haven asset from institutional, individual, and official sectors may further increase in the coming months. Real estate stocks were weighed down by development and investment data. By the close of trading, Yuexiu Property (00123.HK), Ronshine China (03301.HK), and China Vanke (02202.HK) had fallen by 2.68%, 1.44%, and 0.79%, respectively. Note: Performance of real estate stocks In terms of news, data from the National Bureau of Statistics (NBS) showed that from January to April, national real estate development investment reached 2,773 billion yuan, a year-on-year decrease of 10.3%. Among this, residential investment was 2,117.9 billion yuan, down 9.6%. From January to April, the sales area of newly-built commercial housing reached 282.62 million m², down 2.8% YoY, with the decline narrowing by 0.2 percentage points compared to the January-March period. Tea beverage stocks weakened slightly By the close, Cha Panda (02555.HK), Tenfu (06868.HK), and Mixue Group (02097.HK) fell by 4.19%, 4.09%, and 1.40%, respectively. Note: Performance of tea beverage stocks In terms of news, most tea beverage stocks, including Cha Panda, weakened, which was related to profit-taking by some investors. Taking Mixue Group as an example, since its listing, the company's shares have risen by over 150% in total. Stocks with abnormal movements NetEase Cloud Music rises over 5%, with Q1 gross profit up nearly 14% QoQ NetEase Cloud Music (09899.HK) rose by 5.32% to close at HKD 217.60. In terms of news, NetEase Cloud Music's net revenue for the first quarter of this year was RMB 1.858 billion, with a gross profit of RMB 683 million, corresponding to a gross profit margin of 36.7%. Bilibili rises over 4%, with Q1 results exceeding expectations Bilibili-W (09626.HK) rose by 4.35% to close at HKD 146.40. CMB International released a research report stating that Bilibili announced its financial results for the first quarter of 2025, with total revenue increasing by 24% YoY to RMB 7 billion, in line with market consensus expectations. Adjusted net profit reached RMB 362 million, turning around from a net loss of RMB 456 million in the first quarter of 2024 and exceeding market expectations of RMB 248 million. For the second quarter of this year, CMB International expects Bilibili to maintain a 20% YoY revenue growth rate. Meanwhile, benefiting from the strong momentum of its advertising and mobile gaming businesses, its profit margin will further expand.

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

Over the past year, international gold prices have repeatedly hit new highs. Despite some fluctuations, they have generally shown an upward trend. Since the beginning of this year, spot gold prices have surged by more than 20%, with most of the gains occurring in the first quarter. However, many Wall Street bigwigs remain optimistic about the outlook for gold prices. For example, David Einhorn, a Wall Street hedge fund titan and the founder and president of Greenlight Capital, said on Wednesday that he still believes there is more upside room for gold. He emphasized that his long-term view on gold remains correct, and gold prices may continue to rise. "Gold prices are related to people's confidence in fiscal and monetary policies. Since we bought gold around 2008, it has been clear to me that both US fiscal and monetary policies have been too aggressive, creating risks," he said. Einhorn pointed out that, relative to the size of the federal government's budget, the cost savings that the Musk-led "Department of Government Efficiency" (DOGE) has helped achieve so far are "a drop in the bucket," indicating that the fiscal situation is unlikely to change in the short term. "Both parties have agreed to take no action on the deficit until we really face the next crisis," he added. The hedge fund manager also said that gold and other defensive positions have helped Greenlight Capital start the year strongly. As previously reported, Greenlight Capital rose 8.2% in the first quarter of this year, while the S&P 500 index fell more than 4% over the same period. Einhorn is not the only bigwig who believes gold prices will continue to rise. Billionaire investor Jeffrey Gundlach, known as the "Bond King," also believes that gold's record-breaking rally is far from over. He predicts that gold prices could climb to $4,000 per ounce. He believes that due to concerns about various factors such as geopolitical instability and tariffs, as well as the existing scale of US debt, the market has already regarded gold as a real monetary asset. In addition, the team of commodity analysts at Bank of America also expects that the likelihood of gold prices reaching $4,000 per ounce in the second half of this year is increasing. As for other catalysts behind the rise in gold prices by the end of the year, Bank of America pointed out that geopolitical uncertainties triggered by global trade are the biggest driving force for gold price increases before the end of 2025, and concerns about the fiscal outlook of the US government may trigger the next wave of gold price increases. On the other hand, Einhorn also noted that he expects US inflation to continue to heat up. He disclosed that he holds long-term inflation swap contracts, betting that prices will rise faster than market expectations. "All these actions (by the US government) will ultimately lead to inflation, and at a higher rate," he said.

On the morning of May 12, after China announced that the China-US meeting had reached "important consensus," spot gold prices fell to $3,260 per ounce, dropping over 2% intraday. In stark contrast, following the recent clashes between Pakistan and India in the Kashmir region, COMEX gold futures rose 0.82% to $3,333 per ounce on May 10, with a cumulative increase of 2.8% for the week. On the afternoon of May 9, spot gold prices even surged to $3,338 per ounce. As May progresses, the fluctuating trend of international gold prices at high levels seems to have become the norm. In the view of industry insiders, considering the ongoing geopolitical uncertainties and tariff disputes, the recent volatility in gold prices is understandable, and investors, especially futures investors, need to enhance their risk awareness. Cailian Press reporters noted that as the primary channel for ordinary people to participate in gold investment, several national commercial banks, including China Construction Bank, Industrial and Commercial Bank of China, Bank of China, China Merchants Bank, and China Everbright Bank, have continued to issue announcements recently, raising the minimum subscription amount for gold accumulation plans and explicitly warning that "investment involves risks." Several industry insiders told Cailian Press reporters that, objectively speaking, drawing lessons from past incidents like the crude oil treasure and paper gold events, banks do not hope for sharp fluctuations in gold prices, especially for gold accumulation plans. Unexpected volatility in international gold prices is intensifying. A macro analyst from a securities firm who has long tracked gold trends told Cailian Press reporters that the surge in international gold prices this year has exceeded the estimates of many industry insiders. According to the research of his institution, a price of $3,000 per ounce is already a reasonable range considering supply and demand factors. However, gold prices have continued to hit new highs since then, primarily due to the "butterfly effect" triggered by Trump's tariff disputes, which led to a significant influx of safe-haven funds into the gold market, coupled with speculation, resulting in mixed performance and fluctuating trends in gold prices recently. On May 11, a report released by Guosheng Securities analysts Zhang Hang, Chu Jinna, and He Chengyang pointed out that bullish and bearish factors intertwined over the past week, leading to increased volatility in gold prices. On May 7, data from the official website of the People's Bank of China showed that China's gold reserves increased by 70,000 ounces MoM at the end of April, marking the sixth consecutive month of gold purchases. The average/highest/lowest prices of COMEX gold in April were $3,236, $3,510, and $2,970 per ounce, respectively, which may serve as reference support levels for future gold price movements. "Geopolitical conflicts remain unresolved, and tariff disputes are unlikely to reach a consensus in the short term. Overall, gold prices are expected to remain volatile this year, and investors need to enhance their risk prevention awareness."The analysts held the above views. Multiple banks have intensively issued risk warnings, with the minimum purchase amount for individual clients' gold accumulation raised to 1,000 yuan. Although banks objectively benefited from the strong gold prices last year, many have recently issued announcements to increase the minimum purchase amount for gold accumulation and issue risk warnings. The latest case is that on May 9, China Construction Bank stated on its official website that the recent intensified fluctuations in domestic and overseas precious metal prices have increased market risks. Clients are advised to enhance risk awareness in precious metal business, reasonably control positions, promptly monitor open interest and margin balance changes, and invest rationally. Additionally, to strengthen business risk management, China Construction Bank has raised the minimum amount for regular gold accumulation (including daily average and self-selected day accumulation) from 800 yuan to 1,000 yuan starting from 9:10 on May 6. Besides CCB, other national commercial banks such as ICBC, Bank of China, China Merchants Bank, and China Everbright Bank have also issued announcements to increase the minimum purchase amount for gold accumulation and explicitly warned that "investment carries risks." Among them, China Merchants Bank has raised the minimum purchase amount for gold accumulation four times this year, directly increasing it from 750 yuan to 1,000 yuan. According to information from major banks' official websites, the threshold for ordinary people to purchase gold accumulation has now been raised to 1,000 yuan. Several industry insiders told Caixin reporters that, objectively speaking, referring to past incidents like the crude oil and paper gold events, banks do not want to see sharp fluctuations in gold prices, especially in gold accumulation business. An insider from a listed bank in Jiangsu, Zhejiang, and Shanghai told Caixin reporters that after the bank raised the minimum purchase amount for gold accumulation, the number of subscribing clients did not increase. This means that if the purchase threshold is repeatedly raised, banks' fee income will decrease instead. "Overall, currently, banks mainly play the role of channels and intermediary platforms in the gold trading market, and everyone hopes to steadily collect fees from it," the above-mentioned bank insider in Jiangsu, Zhejiang, and Shanghai admitted. From the perspective of risk avoidance, many banks currently do not invest much in their proprietary gold business (derivative trading). This phenomenon may be difficult to change in the short term. Benefiting from the 'crazy gold,' many banks had a good harvest in their gold business last year. Caixin reporters noted that in the past week, many banks have become the focus of public opinion due to their gold business. For example, a netizen revealed on social media that a friend purchased gold bars at a branch of ICBC in Shanghai, and the melted substance was suspected not to be pure gold.The topic "Buying adulterated gold bars from banks" thus trended on Weibo. However, on the evening of May 9, the ICBC Jiading Sub-branch in Shanghai responded that, after verification, the situation was untrue. Detection reports for the two types of gold bars both recorded a detection conclusion: the gold content was 99.99%, with no quality issues. So, apart from selling gold bars and gold ingots, what are the other mainstream gold businesses currently offered by banks? An insider from a joint-stock bank told a reporter from Caixin that, in addition to physical gold businesses, many banks currently offer common services including gold accumulation plans, wealth management products linked to gold, precious metal financing leasing, and precious metal futures/options derivatives trading, among others. After some insurance institutions were recently approved to enter the gold trading market, "another trading channel has been added." Yu Zhi, a researcher at Use Trust, previously told a reporter from Caixin that gold-linked wealth management products fall within the extended scope of fixed-income+ products, but the number of such products issued is not large. "The gold market business is an important part of a bank's intermediate income business. Banks are an important channel for investors to trade gold ETFs. Last year, with the sharp rise in gold prices, banks' intermediate income also benefited significantly," the aforementioned macro analyst pointed out. After the paper gold business was suspended, influenced by the current strong cycle of gold, banks' related businesses have also picked up recently. A Caixin reporter noted that, judging from the annual reports of some banks, the gold business has indeed become one of the highlights of last year. For example, the Industrial and Commercial Bank of China's (ICBC) annual report disclosed that, as of the end of 2024, on ICBC's balance sheet, the bank's precious metal assets were 172.144 billion yuan, compared to only 114.928 billion yuan in 2023; the group's precious metal assets were 208.242 billion yuan, compared to 139.425 billion yuan in 2023. This means that ICBC and its subsidiaries saw significant growth in their gold businesses last year. In addition, the Agricultural Bank of China's annual report also pointed out that, as of the end of 2024, the bank's direct and agency gold trading volume was 5,992.28 mt. The bank's physical precious metal sales in 2024 were 26.671 billion yuan, a 68.5% increase from the previous year. The Postal Savings Bank of China's annual report also disclosed that, in 2024, the bank's precious metal business trading volume increased by 136.47% YoY, and revenue increased by 105.51% YoY. The Industrial Bank's annual report also disclosed that, last year, the bank effectively capitalized on the fluctuations in the gold market to achieve rapid growth in precious metal business volume and revenue, with revenue increasing by 100% YoY during the reporting period.

The international gold price trend took investors on a heart-stopping "rollercoaster" ride at the turn of spring and summer in 2025. On April 22, the spot gold price briefly surged to a record high of $3,500 per ounce, pushing market sentiment to a frenzy. However, within just two weeks, gold prices plummeted, hitting a low of $3,209.4 per ounce. Just as investors were gripped by panic, gold staged a strong comeback on the first trading day after the Labour Day holiday (May 6), with spot gold prices briefly soaring to $3,395 per ounce. As of press time, spot gold was trading at $3,390 per ounce. Industry insiders attribute this extreme volatility to global macroeconomic uncertainties, reflecting irrational investor impulses and the market's complex expectations regarding a potential policy shift by the US Fed. Gold ETFs saw net outflows before the holiday, with some investors selling off gold Despite mounting concerns about elevated gold prices on the eve of the Labour Day holiday, capital flows in gold ETFs sent mixed signals. Many investors saw this as a "buy-the-dip" opportunity, viewing it as a prime time to enter the market. Others believed gold prices had peaked and opted to hold cash during the holiday instead. The capital flows in gold ETFs before the holiday underscore this trend. Data shows that during the five trading days in the week before the holiday (April 24-30), as international gold prices trended downward, the 13 gold ETFs across the market collectively experienced net outflows totaling 2.153 billion yuan. Specifically, Hua'an Gold ETF saw net outflows of 4 billion yuan in the week before the holiday, while ChinaAMC Gold ETF recorded net outflows of 117 million yuan. Additionally, six ETFs tracking the CSI Shanghai-Hong Kong-Shenzhen Gold Industry Stock Index all experienced net outflows in the week before the Labour Day holiday. However, some investors still chose to buy gold through ETFs at the lows. Bosera Gold ETF saw net inflows of 808 million yuan in the week before the Labour Day holiday, while Guotai Gold ETF, E Fund Gold ETF, and ICBC Gold ETF each recorded net inflows exceeding 100 million yuan, at 569 million yuan, 565 million yuan, and 241 million yuan, respectively. Qianhai Open Source Gold ETF also saw net inflows of 70 million yuan. This reflects some investors' strategy of "buying the dip" during price corrections. Borrowing to buy gold? Those who entered at the peak are "stuck at the summit" The extreme volatility in the gold market serves as a mirror, reflecting irrational investor behavior. The capital flows in gold ETFs mentioned above also highlight the investment decisions of some investors. During the surge in gold prices to $3,500 per ounce in April, "buying gold" emerged as the most crowded trade globally. Chinese investors were particularly active during this rally. On April 22 alone, the combined daily trading volume on the Shanghai Gold Exchange and the Shanghai Futures Exchange reached a staggering 989.1 billion yuan, setting a new historical record. However, this frenzy concealed significant risks—some investors entered the market using high leverage or even loans, attempting to achieve rapid wealth accumulation under the illusion of "guaranteed profits and overnight riches." A review of social media platforms by Caixin reporters revealed that many investors had "bought gold with loans." One netizen bluntly stated, "Those who entered at the peak of 830 yuan are now stuck at the mountaintop." Cases of "losing several years' worth of salary in a single day" were not isolated incidents. One investor confessed on social media that he had raised 1 million yuan in principal through credit cards, consumer loans, and online loans, investing it all in gold at its peak. "It started dropping right after I bought it," he said. Similar stories abound on social media: some investors mortgaged their properties to chase highs, while others borrowed money to speculate on gold, only to find themselves trapped in a dilemma of "reluctant to sell but unable to hold on" due to price corrections. Many individual investors mistakenly viewed gold as a "unidirectionally rising" asset, overlooking its high volatility and multiple risk factors, ultimately leading to irrational losses. Financial institutions' risk warnings and regulatory measures followed in quick succession. Starting from April 23, the Shanghai Gold Exchange increased the margin ratios for some futures contracts, and several banks explicitly prohibited the use of credit card funds for gold investments. While these measures curbed speculative behavior to some extent, they also exposed a deeper issue of inadequate market education—ordinary investors lacked a clear understanding of the distinction between gold's hedging properties and short-term speculation. Institutions remain bullish on gold's long-term outlook Despite severe short-term volatility, most institutions remain optimistic about gold's medium and long-term allocation value. In a report released on Monday (May 5), Goldman Sachs stated that strong central bank demand for gold had structurally driven up the gold-to-silver price ratio, and that gold would continue to outperform silver. The bank reiterated its "structurally bullish" view on gold, projecting that under its base case scenario, gold prices would reach $3,700 per ounce by the end of the year and rise to $4,000 by mid-2026. Goldman Sachs also pointed out that in the event of an economic recession, accelerated inflows of ETF funds could push gold prices up to $3,880 by the end of the year. Under extreme risk scenarios—such as heightened market concerns about the US Fed's independence or changes in US reserve policies—gold prices could potentially rise to $4,500 by the end of 2025. Guotai Junan Futures stated that the core imbalance in the current market lies in the tug-of-war between the unchanged medium and long-term risk-aversion logic (geopolitical risks, de-dollarization) and the lack of new catalysts in the short term. If no events such as inflation exceeding expectations or an escalation of geopolitical conflicts emerge on the macro front, gold prices may enter a phase of consolidation, with upward breakthroughs requiring the support of incremental capital. Quantitative models indicate the coexistence of trend momentum and reversal pressure, and AI sentiment indicators suggest that when market divergence intensifies, counter-trend trading can be considered. Overall, gold is still in a transition window from a "rapid bull market to a slow bull market." It is recommended to adopt defensive strategies to cope with high volatility and wait for signals of a breakthrough in fundamentals. A research report by Galaxy Securities stated that a breakout in gold prices may require waiting for a US Fed interest rate cut or a surge in physical gold demand. In the future, it is necessary to further observe the US economic situation, whether it is stagflation or recession. If stagflation occurs and the US Fed does not cut interest rates, gold prices are likely to exhibit a volatile upward trend. If a recession occurs, gold prices will follow the correction of other commodities until the US Fed initiates an interest rate cut. The volatile range for gold has been systematically raised to $3,150 to $3,550, and gold is expected to rise above $3,700 after a US Fed interest rate cut. In addition, robust demand for physical gold may drive gold prices higher again in the second half of the year. Liu Tingyu, the fund manager of Yongying Gold Stock ETF, believes that the characteristics of stagflation in the US economy are evident. The structure of the current non-farm payrolls data and the downward revision of the previous figures reflect ongoing pressure in the US job market. Subsequently, the US dollar and US Treasury yields are likely to resume their downward trajectory, providing medium-term support for gold. Looking ahead, the US Fed's interest rate cut cycle and the stagflation environment in the US are still conducive to the continued rise in gold prices. As the erosion of the creditworthiness of the US dollar and US Treasuries intensifies due to further increases in US tariff uncertainty and deficit ratios, the global trend of "de-dollarization" accelerates. Both central banks, institutional investors, and individual investors are more motivated to continuously increase their allocation of gold assets.