“Gold’s status as a haven may now be tarnished in the eyes of some as the precious metal is falling in price even as war roils the Middle East and financial markets alike, and some may even be tempted to say that the third major bull run in the commodity since 1971 is now over,” says AJ Bell investment director Russ Mould.

On the macro front, the auction results for 20-year US Treasury bonds were poor on Wednesday, and the 10-year US Treasury yield rose by over 11 basis points (BP) on Thursday. The market remains cautious about potential quantitative easing (QE) operations by the US Fed, with the US dollar index briefly returning above 100 before slipping again. In China, the marginal value-added of industrial production in April pulled back, while retail consumption increased slightly. Overall growth remained steady. On Wednesday, the People's Bank of China (PBOC) cut the 1-year and 5-year loan prime rates (LPR) by 0.1%, continuing to release domestic liquidity. This week, LME copper fluctuated rangebound near $9,500/mt, while SHFE copper also fluctuated rangebound below 78,000 yuan/mt. On the fundamental front, Antofagasta initiated negotiations for long-term contracts for the second half of 2025 in Japan this week. Due to news of production cuts from overseas smelters, spot treatment charges (TC) for copper concentrates have stabilized in the short term. For copper cathode, with the LME Asia Metal Week held in Hong Kong, China this week, the spot market was sluggish. Outflows from LME Asia warehouses accelerated, and the market held a relatively pessimistic sentiment towards the premium of US dollar-denominated spot copper in late May. Domestically, after the delivery of the SHFE copper 2405 contract, spot premiums continued to decline, falling to around 100 yuan/mt in east China this week. Downstream restocking sentiment increased as prices dipped, with inventory stabilizing after pulling back. Looking ahead to next week, with the release of liquidity both domestically and internationally, copper prices are expected to have strong support at the bottom. Before the conclusion of mid-year long-term contract negotiations, copper prices are likely to remain in a tug-of-war between sellers and buyers. It is expected that LME copper will fluctuate rangebound between $9,350-9,550/mt, while SHFE copper will fluctuate between 77,000-78,000 yuan/mt. On the spot front, with the temporary slowdown in domestic inventory buildup and strong downstream consumption support after a sharp decline in premiums, amid tight deliverable copper supplies, attention should be paid to the arrival of imported copper at customs and the tug-of-war between supply and demand for stockpiling ahead of the Dragon Boat Festival. Spot prices against the SHFE copper 2506 contract are expected to range from a premium of 100-250 yuan/mt.

When the Nasdaq fell 10% and 20% from its highs, Trump, who maintained a stance of aggressive tariff policies, seemed to "not even blink." However, after US bonds faced intense selling this week, Trump "lightning-fast" suspended the "reciprocal tariffs" on most countries before the sun set on April 9, the "Reciprocal Tariff Day"... This inevitably made many industry insiders curious: Was the US government's tariff suspension largely to "save US bonds"? It is reported that US President Trump said on social media on the 9th local time, "Given that more than 75 countries have called US representative agencies to negotiate solutions on issues related to trade, trade barriers, tariffs, currency manipulation, and non-monetary tariffs, I have approved a 90-day suspension for these countries, which applies to reciprocal tariffs. During this period, general tariffs will be reduced to 10%, and the suspension takes effect immediately." After Trump's major shift in tariff policy, the S&P 500 index recorded its largest gain since 2008 overnight, and the Nasdaq surged more than 12% in a single day. At the same time, US bond prices generally halted their decline during the Asian session on Wednesday. The yield on the 10-year US Treasury narrowed its gain to 12.6 basis points, closing at 4.386%. Earlier, it had reached 4.515%, the highest since February 20. The yield on the 30-year US Treasury also narrowed its gain to 6.1 basis points, closing at 4.776%, after hitting a high of 5.023% during the day, the highest since November 2023. As previously reported by Caixin, the epic sell-off in the US bond market reached an extremely dangerous moment during the Asian session on Wednesday. The yield on the 30-year US Treasury rose 56 basis points in less than three trading sessions—the last time yields rose this much in three days was on January 7, 1982. Nomura interest rate trader Ryan Plantz even warned in an internal memo, "In the Treasury space, swap spreads and basis trades are melting. The US Treasury market is experiencing unprecedented large-scale unwinding, and a liquidity vacuum has formed." Famous economist Peter Schiff even claimed that if the US Fed did not take emergency "rate cuts + QE" on Wednesday, a stock market crash similar to the "Black Monday" of 1987 could recur. However, in the end, although people did not get the "Powell put" on Wednesday, they unexpectedly received a "Trump put"—the "King of Understanding" finally made concessions on reciprocal tariffs... Trump and Besant faced a "soul-searching question" So, did the US government really suspend tariffs to "save US bonds"? Interestingly, both Trump and US Treasury Secretary Besant were asked about this topic last night... On Trump's side, when a reporter asked, "Did the bond market convince you to make the (tariff) reversal?" Trump said, "The bond market is very tricky, I've been watching it. But if you look at it now, it's beautiful. I felt a bit sick last night. You have to be flexible to get things done." Clearly, Trump seemed to tacitly acknowledge that US bond volatility had become one of the factors in his decision-making changes. However, US Treasury Secretary Besant denied any connection between US bond volatility and the tariff suspension last night. Besant was also asked at the White House—did the shocking rise in US bond yields, which raised concerns about a liquidity crisis and questions about whether US Treasuries were losing their safe-haven status, prompt Trump to make some concessions? Besant pointed out, "This was driven by the president's strategy. He and I had a long talk on Sunday, this has always been his strategy." Earlier in the day, Besant also downplayed the potential impact of US bond turmoil. He said that the current turmoil in the US bond market is not systemic and expects the bond market to stabilize. "I don't think this is a systemic issue, I think the deleveraging happening in the bond market is a disturbing but normal process." What does Wall Street think? It is worth noting that some Wall Street figures do not agree with Besant's seemingly evasive statements. Allianz Group's chief economic advisor Mohamed El-Erian said on Wednesday, "Just an hour ago, people were debating what could convince the US government to choose some form of tariff suspension. Was it Congress, the president's advisors, business leaders, the judiciary, the market, or something else?" "We got the answer today: it was the government bond market—especially how close it came to the line between extreme price volatility and market failure." Former JPMorgan chief global strategist Marko Kolanovic also said, "The bond market collapse likely put the White House in a difficult position." "After the bond market collapsed, their entire narrative fell apart, their first excuse was, 'Well, this (tariff suspension) works for the bond market,' it was probably the bond market that forced them to do it." KLARITY FX managing director Amarjit Sahota pointed out, "Why today? I think almost everyone was discussing this morning what was going on with the US 10-year Treasury yield?" "Why did yields rise sharply? People were selling bonds, who exactly was selling these bonds? There was speculation about hedge fund sellers and foreign investors." "This might have been enough to scare the government into providing a tariff suspension." In addition, F/M Investment Company's chief investment officer Alex Morris also believes that it was the bond market that prompted the president to take action—it had already started signaling that the situation would continue to deteriorate. Market volatility was definitely a heavy blow... Stock trading is influenced by tweets, market sentiment, and concerns about foolish policies being introduced. But currently, liquidity is still sufficient, and the market structure remains sound. In fact, since officially taking office at the beginning of this year, the US Treasury under Besant's leadership has always placed far more importance on US bond volatility than on US stocks. As early as early February, when his nomination was just approved, Besant said that the Trump administration was more focused on the 10-year US Treasury yield than the US Fed's short-term benchmark rate in reducing borrowing costs. Whether it is the policy measures already implemented by the Trump administration, or many plans still under discussion or in the works, such as tariffs, DOGE, Bitcoin reserves, checking the treasury, immigration gold cards, the US sovereign wealth fund, the Mar-a-Lago agreement, etc., the ultimate goal seems to revolve around two words: "debt reduction"!

On May 16, the 2025 SMM (6th) Silver Industry Chain Innovation Conference, hosted by SMM Information & Technology Co., Ltd. (SMM), co-organized by Ningbo Haoshun Precious Metals Co., Ltd. and Quanda New Materials (Ningbo) Co., Ltd., and supported by sponsors including Fujian Zijin Precious Metals Materials Co., Ltd., Huizhou Yian Precious Metals Co., Ltd., Jiangsu Jiangshan Pharmaceutical Co., Ltd., Zhengzhou Jinquan Mining and Metallurgical Equipment Co., Ltd., Hunan Shengyin New Materials Co., Ltd., Zhejiang Weida Precious Metals Powder Materials Co., Ltd., Guangxi Zhongma Zhonglianjin Cross-border E-commerce Co., Ltd., Suzhou Xinghan New Materials Technology Co., Ltd., Yongxing Zhongsheng Environmental Protection Technology Co., Ltd., IKOI S.p.A, Hunan Zhengming Environmental Protection Co., Ltd., Kunshan Hongfutai Environmental Protection Technology Co., Ltd., and Shandong Humon Smelting Co., Ltd., featured a presentation by Liang Yonghui, Deputy General Manager of Shandong Zhaojin Gold and Silver Refining Co., Ltd., on the topic "Analysis of Gold and Silver Price Trends: A Trader's Perspective." Logic of Gold and Silver Price Analysis The logical hierarchy of gold price drivers differs from that of commodities due to gold's financial attributes. Silver prices are increasingly influenced by copper prices. Long-term: The macro trend of gold prices opposes paper currency credit. Medium-term: Guided by expectations of real interest rates, with capital flows dominated by technical factors, speculation, and risk aversion. Short-term: Market sentiment Gold price = Real interest rate + Risk aversion + Market sentiment, etc. Logic from 1997 to present: From 1997-2015, real interest rates and inflation; from 2016-2018, technical factors; from 2019 to present, real interest rates, risk aversion, and market sentiment. Gold and Silver Price Analysis Framework (Mind Map) Macro fundamentals: From the perspective of military cycles, the current period is a high-incidence era of revolutions over the past century, indicating a more severe situation than in the 1930s and 1970s. From the Kondratieff wave (long-wave cycle) perspective, the current situation in the US resembles that of the 1970s, both experiencing high inflation during the Kondratieff depression phase. Sunspots: A century-long solar storm tide provides long-term support for gold and silver prices. The rise in global average temperatures will significantly increase the number of hungry people, raising uncertainty risks. Abnormal weather patterns, economic turmoil, and population growth will provide long-term bullish factors for gold and silver (carbon neutrality). From the perspective of the US dollar index, it has fallen below 100 but is expected to remain volatile, with a bullish impact on gold and silver prices. The purchasing power of major currencies and commodities has significantly declined relative to gold. Historically, major currencies were pegged to gold. Following the final collapse of the US Bretton Woods system in 1971, gold was delinked from the US dollar. Since then, with a few exceptions, gold has significantly outperformed all major currencies and commodities as a medium of exchange. A key factor behind this robust performance is the slow growth in gold supply, with gold mine production increasing gradually over time—by approximately 1.7% annually over the past two decades. In contrast, fiat currencies can be printed in unlimited quantities to support monetary policies, such as the quantitative easing (QE) policies implemented after the 2008 global financial crisis and during the COVID-19 pandemic in 2020. These crises have prompted investors to turn to gold as a hedge against currency depreciation risks and to protect the purchasing power of their assets. Currently, the US Fed's interest rate cut cycle has entered a pause phase. A series of uncertainties are affecting the outlook for US Fed interest rate cuts. The minutes of the US Fed's monetary policy meetings indicate that policies such as the Trump administration's tariffs have led to increased economic uncertainty and upside risks to inflation. Therefore, the US Fed will continue to pause interest rate cuts and wait for clearer inflation and economic outlooks before taking further action. According to statistics, the term "tariffs" was mentioned 107 times in the US Fed's Beige Book report, while terms related to "uncertainty" appeared 89 times, reflecting the US Fed's concerns about the uncertain consequences arising from tariff policies. Currently, market expectations are for an interest rate cut as early as June, with up to four cuts possible throughout the year. According to the US Fed's interest rate forecast dot plot, a report based on individual members' predictions of future target interest rates released by the Federal Open Market Committee (FOMC): Looking ahead to the US Fed's future interest rate cut path, the prerequisites for future US Fed interest rate cuts are sustained declines in inflation or significant weakness in the labour market. Trump has repeatedly pressured Powell to cut interest rates, but Fed Chairman Powell has clearly stated that the current stance is to remain on the sidelines. Currently, influenced by the continued weakening of the labour market, market expectations for US Fed interest rate cuts this year have risen to 100 basis points, with a total of four cuts expected. The ongoing global de-dollarization is causing cracks in the US dollar system, reshaping the world order. With no alternative to gold emerging yet, this supports gold prices. The macroeconomic cycle influences medium and long-term fluctuations in gold prices. US economic recession cycles often correspond with rising gold prices and falling silver prices. The risk of economic recession has significantly increased, which is bullish for gold and bearish for silver. From the perspective of real interest rates, the current static gold price is $1,850. ►Silver Supply and Demand The latest report released by the Silver Institute predicts that the global silver deficit will narrow to 117.6 million ounces in 2025, a decrease of 21%. This change stems from the combined effects of a 1% decline in demand and a 2% increase in total supply. Silver, as a crucial material for jewelry, electronics, EVs, and solar panels, and with investment value, has experienced a structural market shortage for five consecutive years. It is expected to remain stable in 2025, while demand for jewelry and silverware is anticipated to decline. The report specifically mentions that adjustments to the US tariff policy pose a major risk factor for silver demand this year, and changes in this policy may profoundly impact the supply-demand balance in the global silver market. Both the total global silver supply and silver mine production have slowed down. Total demand has weakened somewhat, while industrial silver demand continues to grow, and PV demand growth is limited. It also elaborates on the narrowing of the silver supply-demand gap; the low level of domestic and overseas silver inventories; the historically high levels of silver CFTC open interest, bulls, and net long positions; the rise in silver investment demand; and the increase in silver ETF holdings. ►Gold-silver price ratio: The ratio of silver to gold is an important indicator for measuring their relative value. Due to the impact of safe-haven and investment demand, gold surged significantly in April, while silver, lacking safe-haven attributes, saw limited gains, leading to a rapid widening of the gold-silver ratio to 107. After the release of the overheated sentiment in the gold market, gold bulls reduced their positions in stages and exited the market. Meanwhile, silver remained unusually resilient, and the gold-silver ratio once fell below 100. The long-term upward logic for gold remains unchanged, while silver currently lacks the conditions for a long-term rally. Despite the already high gold-silver ratio, as the correction in gold concludes, bullish capital is expected to return to the market, and the gold-silver ratio may continue to rise in the future. From the perspective of the Kondratieff depression phase, considering excess premium or a macro bull market, gold has risen, and the excess premium has been realized. Will there be a macro bull market? Bearish in the medium term. From the perspective of the gold-to-metal and gold-to-agricultural product ratios during the depression, gold is at a high level with excess premium, which is bearish. From the perspective of central banks' gold buying and selling, central banks' purchases have been on an upward trend in recent years, which is bearish in peaceful times and bullish during war cycles. From the perspective of capital flow—open interest, a unilateral trend can be maintained. Exchange rates will reduce volatility: From the perspective of the silver bull-bear cycle, with eight operational phases, it is bearish. However, silver's application in PV at 3,000 mt per year is bullish in the long term (due to major industrial technological breakthroughs). ►Key factors Some thoughts: 1. Gold's correction is similar to that in December 2009. Most non-ferrous metals have seen their prices halved, while gold has continuously hit new highs, and silver's performance resembles that of copper in the 1980s. 3. Prices tend to rise during interest rate hike cycles, and there is a high probability of rising during interest rate cut cycles as well. 4. The global macro cycle suggests a chaotic world in the future. Under this macro cycle, gold prices may exceed expectations. Could silver reach $49? 5. Opportunities arise from the scarcity of gold, silver, platinum, tin, gallium, germanium, and major industrial technological breakthroughs. 6. Digital currencies represent the greatest uncertainty in weakening the financial attributes of gold and silver. Gold has the foundation for a major bull market, and silver's long-term target is close to its previous high. ►Forecast: Its long-term attributes resemble those of copper, with a new cycle trend emerging after March 2024. In the near term, prices are expected to range from $27 to $38, with an overall fluctuating upward trend based on weekly adjustments. Gold: Is there a foundation for a long-term bull market at $5,000? Risk warnings: (In the VUCA era) 1. Uncertainty of war and conflicts. 2. Uncertainty of technological revolutions. 3. Uncertainty between the East and the West. 4. Uncertainty of exchange rates. 》Click to view the special report on the 2025 SMM (6th) Silver Industry Chain Innovation Conference