Precious Metals Sector Soars, Western Gold Hits Daily Limit! After Silver Prices Surge, Sentiment in Spot Market Turns Cautious [SMM Flash News]

SMM, June 3:

The flip-flopping of the US tariff policy has once again sparked market concerns over global trade uncertainties; the ongoing Russia-Ukraine conflict has fueled a surge in market risk aversion; coupled with a series of factors such as the US ISM manufacturing PMI for May falling to 48.5, marking the third consecutive month below the 50 mark {{only used when specifically referring to PMI}}, have all contributed to the recent strengthening of precious metals. During the Dragon Boat Festival holiday, COMEX precious metals surged by 2.82%, with COMEX silver rising by 5.61%. This also drove the domestic precious metals market to strengthen on the first trading day after the Dragon Boat Festival. As of around 13:15 on June 3, COMEX gold fell by 0.3%, trading at $3,387.1 per ounce; COMEX silver fell by 0.96%, trading at $34.36 per ounce; SHFE gold rose by 1.62%, trading at 784.74 yuan/g; SHFE silver rose by 2.32%, trading at 8,413 yuan/kg; and silver T+D rose by 2.79%, trading at 8,408 yuan/kg.

The precious metals equity sector also saw a significant surge, at one point leading the gains across all industries. As of around 13:14 on June 3, the precious metals sector rose by 3.7%. Among individual stocks, Western Gold surged by the daily limit, while Xiaocheng Technology, Chifeng Gold, Sichuan Gold, and Hunan Gold were among the top gainers.

News Updates

Domestic Pure Gold JewelryPrices Return to the 1,000 Yuan Mark

(Image sourced from Chow Tai Fook's official website)

Following the notable rise in COMEX gold during the Dragon Boat Festival holiday, domestic pure gold jewelry prices also returned to the 1,000 yuan mark. According to Chow Tai Fook's official website, the quoted price for Chow Tai Fook's pure gold jewelry on June 3 was 1,020 yuan/g, up 22 yuan from the previous day's 998 yuan/g. Additionally, Laomiao Gold's pure gold jewelry was quoted at 1,019 yuan/g on June 3, while Chow Sang Sang's pure gold jewelry was quoted at 1,024 yuan/g.

World Gold Council: Gold Should Be Considered a High-Quality Liquid Asset, Just Like 30-Year US Treasuries

Although gold is classified as a Tier 1 asset under Basel III, it has not yet been recognized as a High-Quality Liquid Asset (HQLA). HQLA is a key classification that the World Gold Council (WGC) seeks to change. Analysts from the WGC, in their latest report, have recommended that the Basel Committee on Banking Supervision (BCBS) re-examine the classification of gold and recognize it as an HQLA, citing significant market volatility so far this year. The WGC pointed out that over the past six months, gold has once again demonstrated many of the key characteristics that an asset must possess to qualify as an HQLA. US Treasuries, particularly 10-year and 30-year bonds, are among the most recognized top-tier HQLAs. However, the WGC noted that in recent months, gold has been moving in tandem with these stable assets. Analysts stated: "Using intraday minute-by-minute data, we found that gold's average daily volatility was 0.027%. This is higher than the 0.016% volatility of 10-year U.S. Treasury bonds (OTR) but aligns with the 0.028% volatility of 30-year U.S. Treasuries (OTR)." (FX678)

Silver Price Surges Above 8,400 Amid Strong Market Caution

》Click to View Spot Prices of Precious Metals

Boosted by the strong performance of silver futures, spot silver prices showed significant gains on June 3. On June 3, the average morning ex-works reference price for SMM1# silver was 8,425 yuan/kg, up 245 yuan/kg (3%) from the previous trading day. According to SMM, the premium/discount quotes for spot standard silver ingot warrants in Shanghai were 3-5 yuan/kg, but downstream buyers remained cautious, with minimal transactions at high premiums. Market activity was sluggish, with some standard silver ingot suppliers offering discounts of 25 yuan/kg against the SHFE silver 2508 contract. Large suppliers quoted premiums of 5-8 yuan/kg for silver ingots against TD warrants. Although precious metal prices surged after the Dragon Boat Festival, downstream demand showed no significant improvement, and market sentiment remained cautious, with only limited spot transactions for essential needs.

Market Views

Huilin Wang, SMM silver analyst, discussed the topic "Silver Supply-Demand Evolution and Price Outlook" at the 2025 SMM (6th) Silver Industry Chain Innovation Conference, hosted by SMM Information & Technology Co., Ltd., co-organized by Ningbo Haoshun Precious Metals Co., Ltd. and Quanda New Materials (Ningbo) Co., Ltd., and sponsored by Fujian Zijin Precious Metals Materials Co., Ltd., Huizhou Yi'an Precious Metals Co., Ltd., Jiangsu Jiangshan Pharmaceutical Co., Ltd., Zhengzhou Jinquan Mining & Metallurgy Equipment Co., Ltd., Hunan Shengyin New Materials Co., Ltd., Zhejiang Weida Precious Metal 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. She noted: The aging population and rising global economic and political uncertainties have increased safe-haven demand, driving a downward trend in real interest rates; the PV and new energy sectors are experiencing rapid growth, with domestic demand stabilizing and export demand expected to rise; lower real interest rates may boost medium- and long-term allocations to silver assets—these bullish factors could support silver prices to fluctuate upward in the medium to long term.

Michele Schneider, Chief Market Strategist at MarketGauge, stated that gold and silver prices have been consolidating, leading her to maintain a neutral outlook on both. However, if silver prices firmly break through the $34 per ounce level, she will seek to buy, as it is only a matter of time before it rises to $40. (Caijing)

Yide Futures stated: During the holiday, overseas gold and silver prices mainly rose, with the Comex gold-silver price ratio pulling back significantly. US Treasuries, VIX, and the US dollar fell, while US stocks and crude oil closed higher. On the news front, Lorie Logan, the 2026 voting member and President of the Federal Reserve Bank of Dallas, stated that due to a stable labour market, inflation slightly above target, and an uncertain outlook, the US Fed is closely monitoring a range of data to determine what response measures may be needed. Austan Goolsbee, the 2025 voting member and President of the Federal Reserve Bank of Chicago, stated that after the uncertainties brought about by tariff policies dissipate, the US Fed can continue to cut interest rates. The second round of negotiations between Russia and Ukraine ended hastily, with significant differences remaining between the two sides regarding the conditions for ending the war. On the economic data front, the US May ISM Manufacturing PMI pulled back to 48.5, below the expected 49.5, marking a contraction for three consecutive months. The US April Core PCE Price Index annual rate was 2.52%, the lowest since the start of the disinflation process, with the monthly rate rebounding slightly to 0.12%, the second lowest level of the year. The nominal interest rate rebound exceeded the break-even inflation rate, and the slight rebound in the real interest rate increased pressure on gold. The short-end spread between US and German yields began to widen, strengthening support for the US dollar. On the funding front, funds allocated to gold and silver were increased simultaneously. As of June 3, SPDR holdings were 933.07 mt (+2.86 mt), and iShares holdings were 14,351.82 mt (+48.07 mt). Speculative funds in gold and silver flowed out simultaneously, with the former reducing holdings for six consecutive days. According to CME data released on May 30, total open interest in New York gold futures was 408,800 lots (-13,818 lots); total open interest in New York silver futures was 147,800 lots (-1,481 lots). The overnight leading indicator, the HUI Gold Bugs Index, continued to hit new highs, suggesting that overseas gold has the potential to challenge the all-time high of 3,500. Technically, New York gold and silver are showing a breakout momentum, with the former standing above $3,400 and the latter approaching the year's high.

SDIC Futures believes: Precious metals rose during the holiday. Trump's trade policies have fluctuated, with additional tariffs imposed on steel and aluminum again. In terms of data, the US May ISM Manufacturing PMI recorded 48.5, below expectations and the lowest since November 2024. Under the shadow of the trade war, market prospects remain uncertain. Follow-up attention should be paid to the US Court of International Trade's ban on Trump's tariffs and the progress of negotiations between various parties, as precious metals will test the resistance at the previous highs.

Industrial Futures analysis suggests: Since the end of May, uncertainties regarding US tariff policies have risen significantly, with repeated signals emerging on reciprocal tariffs, Sino-US trade negotiations, steel and aluminum tariffs, and automobiles. During the holiday, the Russia-Ukraine conflict intensified again. Although Russia and Ukraine held talks in Turkey on Monday, no signals of easing were released. Short-term risk aversion sentiment has intensified, leading to a significant increase in overseas market gold prices. Overall, reviewing the trend of gold prices in May, fluctuations in market risk aversion sentiment had a significant impact on gold prices, which were prone to repeated fluctuations due to multiple factors, with gold prices fluctuating upward! The gold-silver ratio is relatively high, and silver prices generally follow gold price fluctuations.

Goldman Sachs suggests that gold and oil can serve as tools to hedge against inflation in long-term investment portfolios, stating that amid concerns about the credibility of US institutions and the ability of crude oil to withstand supply shocks, gold is attractive as a safe haven. Analysts such as Daan Struyven recommend a higher-than-usual allocation to gold and a lower-than-usual allocation to oil (though still positive), stating that commodities are a "key" hedge against inflationary shocks, which tend to harm bond and equity portfolios.

Citi has raised its 0-3 month target price for gold to $3,500 per ounce, expecting gold prices to consolidate between $3,100 and $3,500 per ounce.

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