COMEX Gold and SHFE Gold Hit New Highs; Precious Metal Futures and Stocks Surge Together; Spot Silver Trading Remains Sluggish [SMM Newsflash]

SMM March 14 News:

Recently, a series of weak economic data released by the US, coupled with the unpredictable US tariff policies, have reignited market concerns about a US economic recession. Additionally, escalating geopolitical conflicts have heightened market risk aversion sentiment, driving precious metals futures and stocks higher. As of 15:05 on March 14, COMEX gold rose 0.22% to $2,898/oz, hitting a record high of $3,005.9/oz during the session; COMEX silver increased 0.78% to $34.575/oz, reaching a more than four-month high of $34.685/oz during the session; SHFE gold rose 1.83% to 694.96 yuan/g, hitting a record high of 697.6 yuan/g during the session; SHFE silver increased 2.82% to 8,358 yuan/kg, reaching a more than four-month high of 8,386 yuan/kg during the session.

In the stock market: The precious metals sector strengthened. As of the close on March 14, the precious metals sector rose 1.63%. Among individual stocks, Chifeng Gold rose 3.84%, while Shandong Gold and Shanjin International both increased by over 3%.

Gold Jewelry Prices Break Through the 900 Yuan Mark

(Source: Chow Tai Fook's Gold Price Today)

On March 14, leading brands such as Chow Tai Fook, Chow Sang Sang, and Lao Miao Gold saw their gold jewelry prices surpass 900 yuan/g. Specifically, Chow Tai Fook's gold jewelry (including ornaments and crafts) was quoted at 905 yuan/g, Chow Sang Sang's gold jewelry was priced at 907 yuan/g, and Lao Miao Gold's gold jewelry price also climbed to 905 yuan/g.

Silver Prices Surge, Downstream Market Transactions Weaken

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Following a significant rise in precious metals futures, spot silver prices also showed a notable increase. On March 14, the ex-factory reference average price for SMM #1 silver was 8,340 yuan/kg, up 198 yuan/kg from the previous trading day, marking a 2.43% increase.

According to SMM, on March 14, cash spot prices for national standard silver ingots in Shanghai ranged from -2 yuan/kg to 1 yuan/kg, while large-scale silver ingots were quoted at premiums and discounts of 0-3 yuan/kg, with premium transactions being relatively difficult. Additionally, some suppliers quoted "flat" prices against the SHFE silver 2504 contract or discounts of 15-20 yuan/kg against the SHFE silver 2506 contract, with intentions to transfer to delivery warehouses. Overnight, New York silver prices hit new highs, and domestic silver prices strengthened in tandem. However, buyers' willingness to price decreased, and market transactions declined significantly compared to March 13.

Reviewing the weekly performance of the silver spot market: This week, self pick-up prices for tonnage national standard silver ingots in Shanghai ranged from -4 yuan/kg to -1 yuan/kg, while large-scale silver ingots were quoted at premiums and discounts of 0-2 yuan/kg. In Shenzhen, national standard silver ingots were quoted at premiums of 2-3 yuan/kg. As silver prices reached new highs for 2025 this week, market traders became cautious, and some suppliers showed intentions to deliver. Transactions in Shanghai were moderate during the week, but market activity weakened after silver prices rose.

How Do Major Institutions View the Future Performance of Precious Metals?

Macquarie Group analysts stated that gold's safe-haven status might push it to a record high of $3,500/oz in Q3. Analysts including Marcus Garvey mentioned in a report that the average gold price during this period could be around $3,150/oz. On Thursday, gold prices fluctuated near $2,940/oz, with analysts predicting that concerns over a potential increase in the US deficit would provide further support for gold prices. Macquarie noted that if the US budget outlook deteriorates, it could signal rising inflation, benefiting gold as a safe-haven asset. "The reason we believe gold prices have strengthened so far and will continue to rise is that investors and official institutions are more willing to pay for gold, which carries no credit or counterparty risk," the analysts said.

David Wilson, Senior Commodity Strategist at BNP Paribas, stated in a report to clients on Wednesday (March 12) that the company expects gold prices to surpass $3,000/oz for the first time in history and eventually reach $3,100 in the coming months.

Goldman Sachs raised its year-end gold price target to $3,100/oz, citing central bank purchases and inflows into gold ETFs, underscoring Wall Street's enthusiasm for gold. Analysts Lina Thomas and Daan Struyven noted in a report that central bank demand could average 50 mt per month, exceeding previous expectations. They added that if economic policy uncertainties, including tariffs, persist, increased speculative positions could push gold prices to $3,300/oz. According to Bloomberg calculations, this would represent a 26% annual increase.

UBS stated that as gold prices consolidate their gains, silver prices have even greater upside potential, forecasting silver prices to reach $38/oz over the next 12 months.

Bank of America expressed optimism about copper and silver prices, predicting copper prices to reach $12,000/mt by 2027 and silver prices to hit $41.5/oz by 2026.

CITIC Securities' research report noted that currently, consumer expectations for a sustained rise in gold prices are forming, leading to changes in purchasing psychology and behavior for gold jewelry, with its investment attributes strengthening. From a brand perspective, brands with a high proportion of investment gold, strong design and brand power, and those still in the early stages of store expansion may perform well. Additionally, attention should be paid to incremental contributions from online and overseas businesses.

Huatai Securities pointed out that although gold may face fluctuations after its strong appreciation driven by multiple short-term factors, the turning point for the upward trend in gold prices is far from arriving. As the short squeeze in gold subsides, short-term gold prices may experience volatility. However, from a medium and long-term perspective, the structural factors driving gold's relative performance have not only persisted but have also strengthened due to heightened concerns over US fiscal sustainability and trade risks. Therefore, gold is expected to maintain its relative performance over a considerable period.

Huaxi Securities previously released a dynamic report on the non-ferrous metals industry. Supply: Total gold supply in 2024 is expected to increase by 1% YoY to 4,974 mt, the highest in nearly 30 years. Demand: Total demand for 2024 is expected to reach 4,974 mt, setting a record high. Jewelry: Strong gold prices in 2024 are expected to reduce jewelry demand, with its value reaching a record high. Investment: Global investment in 2024 is expected to hit a four-year high, driving gold to achieve an impressive 26% annual return. Central Banks: Global central bank demand is expected to exceed 1,000 mt for the third consecutive year. Technology: Gold demand in the technology sector is expected to reach 84 mt in Q4 2024, with annual demand growing 7% to 326 mt. Frequent changes in tariff policies highlight the "uncertainty" of future US policies. Tariff policies have heightened market risk aversion sentiment, while reversals have narrowed declines in US stock indices and Treasury yields. Increased market volatility has boosted preference for gold. The risk of US economic stagflation underscores a macro environment favorable for rising gold prices. The London market has recently faced a shortage of gold bars, and de-dollarization is driving long-term gold price increases. Although Trump has not explicitly stated plans to impose tariffs on gold, the market fears new tariffs on precious metals, pushing COMEX gold prices above London spot prices. Arbitrage opportunities have prompted traders to ship gold to the US. Since the US presidential election in November 2024, gold traders and financial institutions have transferred 393 mt of gold to COMEX vaults, raising COMEX gold inventory levels by nearly 75% to 926 mt, the highest since August 2022. The simultaneous strength of the US dollar and gold indicates that gold has become a substitute for dollar assets at this stage. Global central bank gold purchases are expected to continue, with de-dollarization driving long-term gold price increases.

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