Precious Metals Sector Rises, Chifeng Gold Leads the Gains, Silver Companies Actively Procure Low-Cost Supplies Before the Holiday [SMM News]

SMM January 13 News:

The uncertainty of Trump's policies has boosted market demand for safe-haven assets, leading to some capital inflows into precious metals. However, the stronger-than-expected US non-farm payrolls data has limited the upside potential of precious metals, causing precious metals futures to fluctuate rangebound on Monday. As of 14:12 on January 13, COMEX gold rose 0.01% to $2,715.3/oz; COMEX silver dropped 0.36% to $31.2/oz; SHFE gold rose 0.55%; SHFE silver fell 0.41%.

In the stock market, although the broader market declined, the defensive precious metals sector rose against the trend. As of the close on January 13, the precious metals sector increased by 2.31%, with all stocks in the sector rising. Among them, Chifeng Gold rose 4.12%, while Zhongjin Gold, Xiaocheng Technology, and Hunan Gold were among the top gainers.

News

Data released by the US Bureau of Labor Statistics showed that US non-farm payrolls increased by 256,000 in December last year, far exceeding the consensus forecast of 160,000. The unemployment rate unexpectedly dropped to 4.1%, below the consensus forecast of 4.2%. Meanwhile, November's data was revised down from 227,000 to 212,000, and October's data was revised up from 36,000 to 43,000. The US Department of Labor will release the annual revision of the non-farm payrolls survey next month. Preliminary estimates from last August indicate that annual employment growth through March 2024 will be revised downward, marking the largest adjustment since 2009. The strong non-farm payrolls data has cast a deeper shadow over the already pessimistic 2025 US Fed interest rate cut path. The CME "FedWatch" tool shows thatthe probability of the market expecting at most one rate cut this year has risen to over 60%.Regarding the more critical question of "when the first rate cut will occur this year," CME data also shows thatagainst the backdrop of an already unlikely rate cut in January, the probability of no rate cut in March has risen from 56% before the data release to 70%.(Source: CLS)

(Source: CME)

Spot Silver Prices See Center Shift Upward, January 13 Spot-Futures Price Spread Fluctuates Sharply

>Click to view precious metals spot prices

>Subscribe to view historical SMM metal spot price trends

In the spot market, since the beginning of 2025, spot silver has mostly risen with few declines, and its price center has shifted upward. On January 13, spot silver prices continued the upward trend of the previous trading day with a slight increase. According to SMM, the ex-factory reference average price of SMM #1 silver on the morning of January 13 was 7,770 yuan/kg, up 13 yuan/kg from the previous trading day, an increase of 0.17%. According to market participants, trading in the spot market on the 13th was polarized. Some downstream enterprises were still in production and demanding goods, resulting in better-than-expected trading volumes, while others had already gone on holiday, leading to no transactions. The spot-futures price spread fluctuated sharply on the 13th, with low-priced inventory clearance for urgent shipments trading quickly, while higher-priced offers for non-urgent shipments were less accepted by the market, resulting in fewer transactions.

Institutional Comments

Goldman Sachs stated that it no longer expects gold prices to reach $3,000/oz by the end of this year, pushing the timeline to mid-2026 due to an anticipated smaller rate cut by the US Fed. Goldman Sachs economists now expect the Fed to cut interest rates by 75 basis points this year, down from the previous forecast of 100 basis points. This forecast is more dovish than current market pricing, as the firm believes the underlying inflation rate is trending downward. Economists also expressed doubts about whether potential policy changes under the new Trump administration would lead to higher interest rates.

A research report by CITIC Securities pointed out that based on its gold price analysis framework, it is optimistic about gold prices in 2025. Global central bank gold purchases are expected to continue, with the announcement effect of such purchases likely becoming more pronounced. Global market enthusiasm for gold investment may persist, structurally characterized by "declines in Asia, increases in Europe and the US." Geopolitical conflicts in the Middle East, Russia, and Ukraine may become more unstable in 2025, favoring gold price increases. In the medium term, cryptocurrencies and gold do not yet constitute competing options for safe-haven allocations. According to model predictions, under a neutral assumption, COMEX gold futures prices could exceed $3,100/oz by mid-2025.

A research report by Newlake Futures stated: Last Friday's release of December US non-farm payrolls data far exceeded market expectations, with the unemployment rate unexpectedly declining. Following the data release, gold prices initially fell and then rose, while the US dollar index and US Treasury yields remained strong. Due to the robust US market data, concerns about a "second wave of inflation" in the US have resurfaced, and investors may re-engage in "reflation trades," supporting gold prices' strength last Friday. With the US incoming leadership set to take office next Monday, short-term gold price volatility may increase. In the medium and long term, more accommodative fiscal policies and hefty tariffs may exert reflationary pressure on the US economy. Additionally, the global oversupply of currency and the sustained gold purchases by central banks worldwide support an upward shift in the gold price center, with gold likely to remain strong in the future. Attention should be paid to this week's US inflation data.

JPMorgan predicted in a report at the beginning of 2025 that gold prices would rise to the epic milestone of $3,000/oz this year.

Recommended Reading:

>[SMM Analysis] December Silver Production Drops Slightly