US Dollar Weakens on Weekly Chart, Metals Broadly Rise, LME Tin Up Nearly 5%, LME Zinc and COMEX Silver Up Over 2%, Gold, Silver End Week Higher [Overnight Market]

SMM July 4 News:

Metal market:

Overnight, domestic base metals nearly all rose. SHFE copper rose 0.14%, SHFE aluminum rose 0.6%, SHFE lead rose 0.38%, SHFE zinc rose 0.87%, SHFE tin rose 3.8%. SHFE nickel dipped 0.02%. Additionally, the most-traded alumina futures fell 0.07%, and the benchmark casting aluminum futures rose 0.24%.

Overnight, ferrous metals mostly rose. Stainless steel fell 1.85%, iron ore rose 0.27%, rebar rose 0.39%. Hot-rolled coil rose 0.4%. For coking coal and coke: the most-traded coking coal contract rose 1.21%, and the most-traded coke contract rose 1.6%.

Overnight, in the overseas market, LME base metals all rose. LME copper rose 0.54%. LME aluminum rose 0.23%, LME lead rose 1.04%. LME zinc rose 2.17%. LME tin rose 4.99%. LME nickel rose 0.4%.

Overnight, precious metals: COMEX gold rose 1.49%, with a weekly gain of 2.22%; COMEX silver rose 2.87%, with a weekly positive close and a gain of 5.26%. Overnight, the most-traded SHFE gold contract rose 0.81%, with a weekly gain of 3.5%; the most-traded SHFE silver contract rose 1.61%, with a weekly positive close and a gain of 8.82%.

J.P. Morgan stated that gold prices may be constrained in the short term due to weakening demand and are expected to remain range-bound. The main reasons are reduced purchasing power in key demand areas and gold's renewed sensitivity to real interest rate changes, which may cap further price increases. However, the bank maintains a bullish view for the medium and long term. Gold is expected to gradually rebound in H2 2026, with an average price around $4,300 per ounce in Q3, rising to about $4,500 in Q4. Looking ahead to 2027, J.P. Morgan believes gold prices are likely to continue their upward trend, driven by factors including continued central bank purchasing, stronger physical demand, and persistent long-term structural allocation needs. These factors will underpin gold's long-term appeal as a safe-haven and reserve asset.

As of 7:41 AM on July 4, overnight closing prices:

Macro front

Domestic side:

[Li Qiang: Take more forceful measures and actions in building a modern industrial system, accelerating high-level technological self-reliance, building a strong domestic market, deepening reforms, and expanding opening-up.] On July 1, Li Qiang, Premier of the State Council and Secretary of the Party Leadership Group, presided over a meeting of the State Council Party Leadership Group to study and implement the spirit of General Secretary Xi Jinping's important speech at the celebration of the 105th anniversary of the founding of the Communist Party of China and Xi Jinping's thoughts on party building. The meeting emphasized the need to strive for new achievements in high-quality development, strengthen initiative and a sense of urgency in work, and take more robust measures and actions in building a modern industrial system, accelerating self-reliance in high-level science and technology, developing a strong domestic market, and deepening reform and expanding opening up. It called for taking solid action, shouldering responsibilities, and striving to carry forward the baton of history, so as to make greater contributions to building a strong country and achieving national rejuvenation. (Xinhua News Agency)

[The State Council: Increasing Efforts in Energy Conservation and Carbon Reduction Transformation in Key Industries such as Steel and Non-Ferrous Metals to Achieve Energy Savings of More Than 150 Million mt of Standard Coal] Recently, the State Council issued the “15th Five-Year Plan for Building a Beautiful China,” clarifying the overall requirements, targets and indicators, key tasks, and major projects for comprehensively advancing the building of a Beautiful China during the 15th Five-Year Plan period. The Plan proposes that by 2030, the quality of the ecological environment will be comprehensively improved, and new significant progress will be made in building a Beautiful China. Green production and lifestyles will be essentially in place, the carbon peak target will be met as scheduled, total emissions of major pollutants will continue to decline, comprehensive solid waste management capacity and level will be significantly enhanced, urban and rural living environments will be notably improved, the diversity, stability, and sustainability of ecosystems will be continuously strengthened, nuclear and radiation safety levels will keep rising, national ecological security will be effectively guaranteed, an ecological and environmental governance system adapted to the requirements of building a Beautiful China will be steadily refined, a number of demonstration models for building a Beautiful China will be established, and the people’s sense of gain, happiness, and security from the ecological environment will be continuously enhanced. It also makes an outlook on the 2035 targets and proposes accelerating the formation of the overall layout for building a Beautiful China. (Xinhua News Agency) The Plan mentions increasing efforts in energy conservation and carbon reduction transformation in key industries such as thermal power, steel, non-ferrous metals, petrochemicals, chemicals, and building materials, promoting and popularizing energy-saving and low-carbon technologies, and achieving energy savings of more than 150 million mt of standard coal. With the Beijing-Tianjin-Hebei region and surrounding areas as the focus, industrial coal-fired boilers with a capacity of 65 steam tonnes per hour or below will be gradually phased out. The substitution of clean energy for coal-fired boilers and industrial kilns in industries such as food, textiles, and papermaking will be advanced.

[Ministry of Finance and Two Other Departments: Adjusting Vehicle and Vessel Tax Preferential Policies for Energy-Saving Vehicles and NEVs] On July 2, the Ministry of Finance, the State Taxation Administration, and the Ministry of Industry and Information Technology issued an announcement on adjusting vehicle and vessel tax preferential policies for energy-saving vehicles and new energy vehicles. It states that from January 1, 2027, the policy of halving vehicle and vessel tax for energy-saving vehicles will be abolished, and the exemption from vehicle and vessel tax for pure electric commercial vehicles, plug-in hybrid (including extended-range) vehicles, and fuel cell commercial vehicles will be abolished. Vehicles of the above types newly acquired by taxpayers or acquired before the implementation of this announcement shall be subject to vehicle and vessel tax in accordance with the Vehicle and Vessel Tax Law of the People’s Republic of China, its implementation regulations, and other relevant provisions.

[Central Bank: To Conduct 1,000 Billion Yuan Outright Reverse Repo on July 6 with 3-Month Term] To keep banking system liquidity ample, on July 6, 2026, the People's Bank of China will conduct 1,000 billion yuan of outright reverse repo operations through fixed quantity, rate tender, and multiple price bidding, with a term of 3 months (91 days). The maturity date is October 5, 2026 (postponed in case of holidays). (Jinshi Data APP)

On the dollar front:

The overnight US dollar index edged up 0.03% to 100.91. For the week, the US dollar index fell, dropping 0.44% for the week, the largest weekly decline since mid-April. The reason was a significant cooling in the US June employment data, which led the market to lower short-term Fed rate hike expectations, causing the dollar index to fall this week. Against a weaker dollar, the euro rose to $1.1440, up about 0.5% on the week; sterling rose to $1.3352, up about 1.1% on the week, its best performance in nearly three months. The yen rebounded from near a 40-year low, with USD/JPY briefly pulling back to around 161 but remaining at high levels. Japan continued to release signals of foreign exchange intervention, with both finance and cabinet officials stating they are closely monitoring the market and maintaining readiness to intervene. Analysts pointed out that the dollar's trend has been notably influenced by employment data and interest rate expectations. If further economic data continues to weaken, the dollar could still face further pressure, but whether the yen can sustain its rebound still depends on the US-Japan interest rate differential and Japanese policy actions. (Jinshi Data APP)

Fed mouthpiece Nick Timiraos said: Trump stated that he believes Fed Chairman Walsh is on the dovish side within the FOMC. The previous day, White House National Economic Council Director Hassett made similar remarks. A week earlier, Treasury Secretary Bessent expressed hope that the Fed would keep an "open attitude" toward inflation and predicted the Fed would ease policy this year. A new era of "forward guidance"... (Jinshi Data APP)

BNP Paribas Chief Economist Isabelle Mateos y Lago said: "If the July non-farm payrolls are very strong, close to or above 130,000, then I think the July meeting will be full of suspense. The uncertainty may not be that high now, but in my view, the case for a Fed rate hike still stands." Before the start of the July 4 holiday, short-term interest rate futures markets priced in about a 20% chance of a Fed rate hike at the July 29 meeting, down from 33% before the non-farm payrolls report. The market still expects the US Fed to raise interest rates by 25 basis points this year, but the earliest hike would be in December. On the European Central Bank, Lagarde said: “The baseline expectation remains another rate hike in September. However, it is notable that Governing Council members speaking at the Sintra conference did not rule out the possibility of not implementing this additional hike.” She warned that the normalization of energy supplies could take half a year or longer to take effect, and eurozone inflation could accelerate again. Even so, she sees no pressures on consumer prices beyond energy-affected areas.

Allianz Chief Economist Ludovic Subran said: “US non-farm payrolls data is actually weak, but I still think inflation will peak above 3.7%, and AI, fiscal stimulus, and the energy sector are still supporting economic growth. The US Fed may have to raise rates in September. I think this is the real divergence between Europe and the US.” Subran believes that the ECB will not act again after last month's rate hike. “That was an insurance hike, but from the current data, it seems to have passed,” he said, “the traumatic effects of the (Iran) war will take time to manifest, and the economy is still bearing the costs of the war, but the situation is much better now than a few weeks ago.” (Jin10 Data APP)

Other currencies:

ECB Governing Council member Muller said that the ECB is in a favorable position after last month's rate hike as falling oil prices ease price pressures in the eurozone. Muller said that while it is too early to predict the next two meetings in July and September, officials made clear that “we are not entering a new rate-hiking cycle.” Muller said: “For now, we are in a favorable position. The balance of risks is also at a reasonable level.” Muller added: “Falling oil prices will ease services inflation pressure,” and “we are not yet seeing second-round effects.” (Jin10 Data APP)

On the macro front:

Next week will see the release of Switzerland's June seasonally adjusted unemployment rate, the Eurozone July Sentix Investor Confidence Index, the Eurozone May PPI m/m, the Eurozone May retail sales m/m, the US June S&P Global Services PMI final, the US June ISM non-manufacturing PMI, the US June Global Supply Chain Pressure Index, Germany's May seasonally adjusted industrial output m/m, the UK June Halifax seasonally adjusted house price index m/m, France's May trade balance, the US ADP employment change for the week ending June 20, the US May trade balance, China's June foreign exchange reserves, Japan's May trade balance, the New Zealand RBNZ interest rate decision due July 8, the US May wholesale sales m/m, China's June CPI y/y, China's June PPI y/y, Germany's May seasonally adjusted trade balance, the US initial jobless claims for the week ending July 4, the US June existing home sales annualized, Germany's June CPI m/m final, France's June CPI m/m final, Switzerland's June consumer confidence index, Canada's June employment change, China's June M2 money supply y/y, among other data releases.

In addition, next week attention should also be paid to: 900 billion yuan in outright reverse repos maturing today; speeches by US Fed Governor Waller, ECB Executive Board member Schnabel, ECB Governing Council member Wunsch, and Riksbank Deputy Governor Seim; Turkey hosting the NATO summit through July 8; the Reserve Bank of New Zealand's interest rate decision; RBNZ Governor Bremann's monetary policy press conference; the US Fed's release of its monetary policy meeting minutes; the ECB's release of its June monetary policy meeting minutes; remarks by FOMC permanent voting member and New York Fed President Williams; and remarks by 2026 FOMC voting member and Dallas Fed President Logan.

Crude oil:

Overnight, both oil futures edged up, with WTI up 0.13% and Brent up 0.19%. On a weekly basis: WTI futures posted a fourth consecutive weekly decline, down 0.65% for the week; Brent futures also fell for a fourth straight week, down 0.91%.

The crude oil market was relatively stable, with Brent crude consolidating near $72 per barrel as the market weighed the supply outlook in the Strait of Hormuz and progress in US-Iran negotiations. (Wall Street CN)

Data from the Intercontinental Exchange (ICE) show that in the week ended June 30, speculators in Brent crude futures cut their net long positions by 34,704 lots to 55,634 lots. Speculators in diesel futures reduced their net long positions by 2,664 lots to 57,852 lots. (Jin10 Data)

Data showed that oil exports from the Gulf region in June increased by more than 3 million barrels per day (b/d) from May, surpassing 10 million b/d, but remained 40% below pre-war levels. The UAE led the recovery in the oil market, allowing millions of barrels of crude stranded in the Gulf to reach international markets, thereby enabling producers to raise output and bring prices down to pre-war levels. According to Kpler, combined exports of crude and condensate from Saudi Arabia, the UAE, Kuwait, Iraq and Iran jumped by more than 3.5 million b/d from May to 10.07 million b/d. Another freight analytics firm, Vortexa, estimated that oil shipments in June were 10.2 million b/d, up from 7 million b/d in May but still well below 16.5 million b/d a year earlier. Based on data from Kpler, Vortexa and LSEG, UAE crude exports hit a record 3.7 to 3.8 million b/d in June, more than 1 million b/d above May's levels. (Jin10 Data)

In addition, three sources said that Venezuela's largest refinery, the 645,000 b/d Amuay refinery, resumed operations on Friday after a power outage and is currently processing about 140,000 b/d of crude oil, with the fluid catalytic cracking unit (FCC) also back online. After two major earthquakes last week that caused heavy casualties, several refineries in Venezuela were affected by power outages. Another source said that the El Palito refinery, with a capacity of 146,000 barrels per day, had its power restored but staff have not yet been able to restart production units. (Jinshi Data APP)

A Reuters survey shows that OPEC crude oil production rebounded sharply in June, up about 3.3 million bpd MoM to 19.43 million bpd, a notable rebound from the more than two-decade low hit in May but still well below quota levels. The recovery in output was mainly driven by resumption of supply from Gulf states, with Kuwait posting the largest increase, while Iran, Saudi Arabia and Iraq also raised output in tandem. Nigeria and Libya also slightly increased production. The UAE had withdrawn from OPEC on May 1 and was no longer included in the statistics. The report noted that the earlier Iran war and the effective blockade of the Strait of Hormuz had caused supply disruptions, and the US subsequently lifted restrictions on vessels at Iranian ports, helping restore some output. Although OPEC+ had planned to increase production in June, the war prevented full implementation. Overall, global crude oil supply is recovering but has yet to return to normal levels. (Jinshi Data APP)