SMM News, August 11:
US ADP and non-farm payrolls data came in significantly below expectations, the US labour market weakened, and the market lowered expectations for US Fed interest rate hikes. Previously, the precious metals market underwent a deep correction, with the market accumulating a certain amount of short positions; after the market hit an inflection point, it triggered concentrated short covering. Meanwhile, funds flowed back into gold ETFs, and investment buying in China’s futures market was relatively active. This round of gains was driven more by financial attributes and derivatives-related funds, while the physical segment did not see a synchronized boost. In addition, multiple central banks worldwide continued to allocate to gold assets, and the PBOC increased its gold holdings for 21 consecutive months, building medium and long-term bottom support for gold prices. The resonance of multiple factors pushed precious metals futures prices higher. As of around 13:27 on August 11, COMEX gold extended the gains of the previous two trading days, up 0.89% to $4,459/oz; the most-traded SHFE gold contract extended its gains, up 1.88% to 961.86 yuan/g; COMEX silver extended the gains of the previous two trading days, up 0.39% to $65.525/oz; the most-traded SHFE silver contract extended the gains of the previous five trading days, up 3.08% to 16,069 yuan/kg; and silver T+D extended the gains of the previous five trading days, up 1.98% to 15,860 yuan/kg. In addition, the most-traded platinum contract extended the gains of the previous trading day, up 0.59% to 437 yuan/g, while the most-traded palladium contract extended the gains of the previous four trading days, up 1.92% to 331.05 yuan/g.
The market is currently focused on US July CPI data, and uncertainty in the precious metals market remains. In the face of persistently rising precious metals futures, what is the outlook from institutions on the subsequent trend?
Spot Market
Silver
On August 11, the morning ex-works reference average price for SMM 1# silver was 16,123.5 yuan/kg, with the average price up 4.63% from the previous trading day. The continued rise in silver prices has continuously suppressed downstream industrial demand, and the purchasing side mostly remained on the sidelines. The price spread narrowed today, traders lowered their offers somewhat, and some suppliers chose to sell at reduced margins for shipments. In Shanghai, early-session quotes were mainly concentrated at TD -5 to +5 yuan/kg. Reduced purchases by banks weakened bottom support; only some rigid demand for acceptance bills was concluded, and the overall market leaned toward parity or a slight discount. In Shenzhen, some national-standard cargoes were concentrated around a slight discount, and both buyers and sellers remained cautious. Today’s premiums quotes against the SHFE the most-traded contract 2610 were at a discount of 65-55 yuan/kg.
Overall, precious metals drifted higher today, supported by bullish factors and buying interest. In the spot market, selling pressure increased after silver prices rose, and transactions gradually shifted to discounts.
Platinum
On August 11, the average spot price of platinum was reported at 432 yuan/g, up 0.23% from the previous trading day. Mainstream quotations for platinum were at a discount of 3.5 yuan/g to a discount of 2.5 yuan/g against the PT2610 contract, with wide differences among quotes. Downstream consumption remained weak, with just-in-time procurement dominating. Mainstream quotation discounts were basically flat from yesterday. As futures rose for several consecutive sessions, some unhedged cargoes in the market were quoted at lower levels. Overall consumption in today’s spot platinum market remained sluggish.
Market Views
Regarding the subsequent trend of precious metals, some institutions were relatively optimistic while others were more cautious. The views of several institutions were as follows:
Chaos Ternary Futures believed that precious metals on Monday moved higher in tandem with US Treasury yields, the US dollar index, and oil prices, which further highlighted that they were gradually pricing in long-term debt credit risks, while the rising probability of “stagflation” further supported the market. Long-term drivers saw some intensification in US Treasury credit concerns: last week, the size of US Treasuries further surpassed $40 trillion, and the US fiscal deficit ratio in July deteriorated, with rising concerns over both debt and deficits driving precious metals. This week, as the “commodity currency logic” re-emerged, precious metals again demonstrated relative strength, while US Treasuries saw some “selling”—the 10-year US Treasury yield rebounded again to 4.7%, and precious metals also rose in tandem with the increase in US Treasury yields. From the perspective of resonance between capital flows and fundamentals, market open interest sentiment and the bottom support from central bank gold purchases remained in place. The underlying logic of continued, normalized gold buying by global central banks was unchanged. The PBOC increased its gold holdings for 21 consecutive months, adding about 20 mt in a single month, forming a sentiment resonance in the market. The “stagflation logic” strengthened somewhat, further lifting precious metals. Last week, US non-farm payrolls data showed negative growth; coupled with the AI narrative still being negatively affected, news on Monday showed that Nvidia cooperated with Wall Street giants to advance an AI infrastructure plan on a scale of 500 billion. This further triggered market extrapolation of the AI logic and concerns over debt risks. US equities declined, and economic expectations fell compared with the earlier period. Geopolitical conditions remained volatile. Iran released a “preliminary plan for managing the Strait of Hormuz,” with very strict conditions, including restrictions on US and Israeli vessels, transport restrictions on certain countries, and possible penalties for rule violations. A rebound in oil prices pushed inflation expectations higher, US Treasury yields rebounded, and inflation risks rose. Last week, precious metals saw a sharp sentiment-driven rebound after being significantly suppressed earlier, and on Monday they continued to drift higher in line with the long-term logic. Going forward, attention should be paid to fluctuations in the USD/JPY exchange rate, changes in the geopolitical landscape, and whether US CPI data later this week show a trend of breaking out to the upside. Relatively speaking, gold’s support is more stable than silver’s, while silver has greater elasticity.
Scott Rubner, a strategist at Citadel Securities, for the first time since the start of 2026 recommended that investors allocate structural positions in gold, saying the precious metals market is forming “one of the most attractive upside opportunities in months”. Rubner believes that gold and silver are simultaneously benefiting from multiple tailwinds, including a shift in US Fed policy expectations, continued central bank gold purchases, quantitative funds still positioned as bears, the options market releasing bullish signals, and retail capital previously drawn by the AI trading wave potentially flowing back in. In his view, multiple factors are creating a rare resonance, and the precious metals market may enter a new phase of gains.
UBS Group: Gold prices are expected to rise to $5,000/oz in H1 2027. Gold’s recent price action may remain relatively volatile.
Matt Simpson, a senior analyst at StoneX, said that improving peace prospects in the Middle East lowered market inflation expectations, pushing gold prices further higher from a consolidation range that had lasted for weeks above $4,000. The US Department of Labor will release the non-farm payrolls report tonight. Simpson added: “Regardless of the non-farm payrolls data, $4,000 has proven to be a solid support level—I suspect bulls are waiting for a pullback to seize the opportunity and drive gold prices to rebound to $4,600. The non-farm payrolls data may bring some fluctuations in the short term, but price action has already indicated the direction; gold seems to want to rise.”
World Gold Council: In July, positive momentum factors offset negative risk factors, leaving gold prices flat in July. Looking ahead, a second wave of high inflation similar to that in the late 1970s cannot be ruled out. But that in itself does not mean gold will surge sharply; this will depend on real interest rates, the US dollar, growth expectations, Asian investor demand, and how central banks respond.
Kelvin Wong, Senior Market Analyst at OANDA, said: “The link between gold and oil prices still exists, because oil prices have a huge impact on inflationary pressures in the global economy. If we can see a clear roadmap for further de-escalation in the (Middle East) situation, gold prices may continue to rise.” (Jin10 Data APP)
A research report by CITIC Securities said that since the start of this year, gold prices shot up and then fell rapidly, but we believe gold remains in a major bull market, due to the accelerating expansion of the US fiscal deficit, geopolitical rifts that are difficult to mend amid de-globalization, and continued central bank gold purchases providing a floor. Therefore, we believe this round of decline in gold prices is merely a temporary correction within a bull market. The current drawdown has approached historical extremes, and around $4,000/oz is highly likely to be the bottom area for this cycle. Looking ahead, the Strait of Hormuz situation is expected to shift from weighing on gold prices to providing a boost; US Fed monetary policy may be more dovish than market expectations, and, combined with a surge in US military spending that widens the deficit, gold prices are expected to return to an upward channel within the year.
Everbright Futures, looking ahead to August, said the near-term trend in gold prices will depend on how the US-Iran situation evolves. If the conflict persists or spillovers expand, market sentiment may turn weaker again, and under expectations of liquidity risks, gold prices may continue to underperform; however, if there is a substantive breakthrough in negotiations, gold prices may stabilize in the short term and stage a rebound-driven repair, which could be further confirmed if financial markets at home and outside China recover in tandem. That said, it can be expected that, supported by rigid central-bank buying and allocation demand, even if another pullback occurs, the downside room will be relatively limited. In addition, the Jackson Hole Global Central Bank Annual Meeting at the end of August may see Waller outline a medium-term policy framework; before that, the US CPI data on the 12th will be a key validation indicator. Overall, gold may be in a phase of a solidifying bottom and sentiment repair, and should be viewed with cautious optimism. The core risks are that the US-Iran conflict again drives oil prices to climb above $90/oz, US inflation data rebound far above expectations, and the probability of a September rate hike continues to rise, which may keep weighing on market sentiment; however, judging from outside China financial markets and oil-price performance, neither strongly supports a full-scale escalation of the US-Iran conflict.
A Reuters poll showed that after gold prices pulled back sharply from record highs in January, analysts cut their gold price forecasts for the first time since the end of 2023, though most still expected central-bank buying and concerns over fiscal sustainability to provide support. In the poll of 29 analysts and traders over the past three weeks, the median forecast for 2026 gold prices was $4,509 per ounce. This was below $4,916 three months earlier and marked the first downward revision in 11 quarters. The average forecast price for 2027 was $4,610, versus $5,100 in the previous poll. Gold prices hit a record high of $5,595 per ounce in January, but in Q2, as the Iran war intensified energy inflation and pushed up rate-hike expectations, prices fell sharply, posting the worst quarterly performance since 2013. Since the outbreak of the war, spot gold has fallen by about 22%. (Jinshi Data APP)
ING analysts Warren Patterson and Ewa Manthey noted that gold prices rose on Monday because a sharp drop in oil prices eased inflation concerns and put pressure on the US dollar and US Treasury yield. A sharp drop in oil prices on Monday eased inflation concerns and the outlook for further monetary tightening. The move followed a pause in hostile actions between the US and Iran. Lower oil prices also weighed on the US dollar and US Treasury yields, improving the outlook for non-interest-bearing assets ahead of this week’s US Fed meeting. The market is now focused on the US Fed and the upcoming US inflation data release for further guidance on the interest-rate outlook. If yields remain subdued, gold prices should continue to find support around current levels. However, any hawkish surprise from the US Fed could limit further upside room in the near term.
Commerzbank: Cut its year-end gold price forecast to $4,500 per troy ounce. Platinum is expected to reach $2,000 per troy ounce by the end of the year, versus a previous forecast of $2,100.
Citi said its base case showed that, despite the third quarter historically being a seasonal peak for stockpiling, India’s gold imports were still expected to stay weak in Q3. This was due to ample scrap supply, cautious consumer sentiment, and local price discounts, which curbed demand for fresh imports. However, Citi still set its 0–3 month short-term gold target at $4,500. The bank said this target assumed easing tensions in the Strait of Hormuz and a less hawkish US Fed; in the near term, many risks could still drive gold prices to retest lower levels, including major re-escalation, AI-driven de-risking, and a persistently hawkish US Fed stance.
Analysts at ANZ Research said in a report that physical demand for the metal and central-bank buying were supporting the gold market. They added that while gold faced near-term headwinds from expectations of US Fed tightening and a strong US dollar, after months of exchange-traded fund outflows, investment positioning in gold looked very thin, suggesting limited room for further declines. A high interest-rate environment typically weighs on non-yielding assets such as gold. (Zhitong Finance)
Goldman Sachs said that, despite pressure from expectations of a relatively tight US Fed, central-bank buying was expected to provide a floor for gold. Demand remained strong; the bank estimated that central banks bought 81 mt of gold in May, with a three-month average monthly purchase of 67 mt, well above the pre-2022 average of 17 mt. Goldman Sachs analysts said: “We believe that as central banks hedge geopolitical and financial risks through reserve diversification, the trend of increasing gold holdings will continue for many years.” The bank forecast average monthly purchases of 50 mt and 40 mt for this year and next year, respectively. (Jinshi Data APP)
Mitsubishi UFJ Financial Group analyst Kim Soojin said: “Recent price action suggests that the market is placing greater emphasis on the possibility that US interest rates will stay high for longer, rather than gold’s traditional safe-haven demand. This leaves gold vulnerable to pressure unless geopolitical risks further translate into a broad deterioration in financial market sentiment.” (Jin10 Data APP)
Asset management firm Fidelity International said it plans to rebuild gold positions that it reduced earlier this year at an appropriate time in the future, believing that gold’s long-term growth momentum remains strong. Ian Samson, a multi-asset portfolio manager at Fidelity International, said recently: “We plan to increase our gold exposure again; it’s just a question of timing.” He said he cut his gold allocation to a neutral level from January to February this year, when a multi-year bull market in gold abruptly ended. Samson expects the gold market to re-enter a bull market at some point in 2027. The rationale for a return to a bull market would only be undermined if “governments return to fiscal discipline and central banks are truly committed to pushing inflation back down,” “but I don’t think we’re in that world right now.” Samson also said that continued gold purchases by central banks (a key driver of the previous gold bull market) will continue to support gold prices.
A research report by Guoxin Securities showed that after a deep pullback in H1, bottoming characteristics in gold prices around $4,000 have gradually emerged, and what remains is for event catalysts to drive a rise. It recommends building positions in batches on dips around $4,000 and avoiding chasing highs. Core allocation logic: First, valuations are at historical lows, with a prominent margin of safety. After a deep pullback in H1, current valuation levels of gold mining companies have pulled back sharply from the beginning of the year to low levels, offering relatively favorable odds. Going forward, in addition to a valuation-repair rally, they are expected to further benefit from the price elasticity brought by a rise in gold prices. Second, earnings elasticity advantages are significant. Gold stocks are an “amplifier” of gold prices—gold mining costs are rigid, and rising gold prices translate directly into profit growth, with performance elasticity far exceeding the increase in gold prices itself.
A research report by Huayuan Securities pointed out that, from a medium-term perspective, the market’s core trading logic has been anchored to a pricing chain of “inflation stickiness and resilience exceeding expectations → an extended period of the US Fed maintaining high interest rates → repeated warming of expectations for rate hikes within the year.” The pricing center of gold remains dominated by US Treasury real yields and the US dollar index, and the overall market may continue to consolidate on a subdued note. Current Middle East ceasefire talks have fallen into repeated bargaining, with significant differences between the two sides on core demands such as troop withdrawal arrangements, nuclear facility inspection mechanisms, control of shipping lanes in the Strait of Hormuz, and rules for passage fees. The recurring nature of geopolitical conflicts continues to disrupt expectations for global crude oil supply, and upside risks to energy prices may further reinforce inflation stickiness, in turn supporting the US Fed’s tightening policy stance. Meanwhile, the US dollar index and US Treasury yields rising in tandem has created a dual drag; coupled with gold’s safe-haven attribute temporarily giving way to interest-rate pricing logic, gold prices’ upside room may remain constrained. Key events to watch over the next two weeks include: 1) developments in the Middle East conflict and navigation conditions in the Strait of Hormuz; 2) the US Fed interest rate decision to be released on July 30; 3) the US June PCE to be released on July 30. In the long term, the rationale for gold’s rise has not weakened; instead, it has been further strengthened amid shifts in the global macro environment and geopolitical landscape. 1) US fiscal deficit constraints, debt expansion, rising trade protectionism, and intensifying major-power rivalry are undermining the stability of the US dollar’s credibility anchor, driving a diversified reallocation of global reserve assets. Gold is gradually evolving into a key asset for hedging sovereign credit risk, geopolitical fragmentation risk, and the risk of a restructuring of the global monetary system. 2) Continued gold purchases by global central banks still provide a solid floor for gold prices, and the PBOC’s continued accumulation further validates long-term allocation demand from the official sector. 3) In the late stage of the US economic cycle, the economy faces multiple constraints from high interest rates, credit contraction, and slowing growth. Going forward, whether the US Fed cuts interest rates due to an economic slowdown or is forced to maintain high interest rates for longer due to sticky inflation, gold retains strong long-term allocation value: the former is positive for a decline in real interest rates, while the latter reinforces demand for safe-haven and credit-risk hedging. Overall, gold remains in a favorable window over the medium and long-term, and its price center is expected to continue to move higher as the global macro environment and geopolitical landscape are reshaped.
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