Warsh Turned Hawkish, Gold and Silver Plunged, Base Metals Fell Broadly, LME Tin and SHFE Nickel Led Declines, Alumina Rose Over 2% [Overnight Market]

SMM August 29:

Metals Market:

Overnight, base metals on the domestic market mostly rose. SHFE copper, SHFE aluminum, and SHFE lead edged lower, with declines all within 0.1%. SHFE zinc rose 0.38%, and SHFE tin fell 1%. SHFE nickel fell 1.13%. In addition, the most-traded alumina futures contract rose 2.24%, and the cast aluminum main contract rose 0.65%.

Overnight, ferrous metals were mostly higher. Stainless steel fell 0.18%. Iron ore rose 0.76%, and rebar rose 0.68%. Hot-rolled coil rose 0.71%. In coking coal and coke: the most-traded coking coal contract rose 3.05%, and the most-traded coke contract rose 2.54%.

Overnight, overseas base metals were mostly lower. LME copper fell 0.15%, while LME aluminum rose 0.56%. LME lead fell 0.39%. LME zinc fell 0.23%. LME tin fell 1.86%. LME nickel fell 0.62%.

Overnight Precious Metals : COMEX gold fell 3.43%, and COMEX gold fell for the week, down 3.77% this week; COMEX silver fell 4.48%, and COMEX silver fell for the week, down 3.51% this week. Overnight, the most-traded SHFE gold contract fell 2.65%, SHFE gold rose for a sixth straight week, up 2.09% this week; the most-traded SHFE silver contract fell 3.62%, SHFE silver rose for six consecutive weeks, with a weekly gain of 3.64% this week.

As of 7:17 on August 29, overnight closing prices:

Macro Front

China:

[Two Departments: Extend Personal Housing Loan Terms from a Maximum of 30 Years to a Maximum of 40 Years] Jin10 Data, August 28: The People's Bank of China and the National Financial Regulatory Administration issued a notice on the “Opinions on Reforming and Improving Real Estate Credit Management to Accelerate the Establishment of a New Model for Real Estate Development.” The notice proposes that personal housing loan terms should not exceed 40 years, and the loan amount should not exceed the appraised value of the home to be purchased. For loans with a term of one year or less, repayment of principal and interest can be made in a lump sum at maturity or monthly; for loans with a term of more than one year, principal and interest shall be repaid monthly.

[Three Departments: Orderly Promote the Sale of Completed Commercial Housing, Realize “What You See Is What You Get,” and Implement “Delivery of Homes with Title Certificates”] The Ministry of Housing and Urban-Rural Development, the Ministry of Natural Resources, and the National Financial Regulatory Administration issued a notice on improving the commercial housing sales system. The notice mentioned that all localities should vigorously and orderly promote the sale of completed commercial housing, realize “what you see is what you get,” reduce disputes over the delivery of commercial housing, fundamentally prevent delivery risks, protect the legitimate rights and interests of homebuyers, and accelerate the establishment of a new model for real estate development.

[Reform and Improve the Real Estate Financing System; the National Financial Regulatory Administration Issues Five Management Measures] The National Financial Regulatory Administration, together with relevant departments, reformed and improved the real estate financing system and issued the “Administrative Measures for Commercial Housing Development Loans (Trial),” the “Administrative Measures for Personal Housing Loans (Trial),” the “Administrative Measures for Commercial Real Estate Loans (Trial),” the “Administrative Measures for Urban Renewal Project Loans (Trial),” and the “Administrative Measures for Trust Companies Conducting Real Estate Trust Business (Trial).” The “Administrative Measures for Commercial Housing Development Loans (Trial)” fully draws on the experience and practices of the “white list” mechanism, treats projects of all ownership types equally, and meets the reasonable financing needs of commercial housing development projects. The “Administrative Measures for Personal Housing Loans (Trial)” reasonably adjusts the timing of loan disbursement, appropriately optimizes the cap on the income-to-debt service ratio, and extends the upper limit of loan terms, thereby protecting the legitimate rights and interests of homebuyers while better meeting residents’ basic and improvement-oriented housing needs. The “Administrative Measures for Commercial Real Estate Loans (Trial)” clarifies loan requirements for the development, purchase, and operation stages of commercial real estate and supports the stable and healthy development of the commercial real estate market. The “Administrative Measures for Urban Renewal Project Loans (Trial)” guides banking financial institutions to make financial services for urban renewal more targeted, adaptable, and effective, helping to advance urban renewal with high quality. The “Administrative Measures for Trust Companies Conducting Real Estate Trust Business (Trial)” adheres to the principles of serving the real economy, controlling risks, and implementing investor suitability management, and promotes trust companies to better leverage their distinctive strengths in carrying out real estate trust business by clarifying business rules, strengthening professional capacity building, and enhancing investor protection. (CCTV)

[The China Securities Regulatory Commission Issues the “Opinions on Capital Market Support for Establishing a New Model for Real Estate Development”] The “Opinions” is divided into four parts and 12 measures, mainly including the following. First, overall requirements. Reform the financing methods for real estate development, promote a shift from reliance on entity credit to a project-based approach, and equally meet the reasonable financing needs of real estate development enterprises of all ownership types. Strengthen access, information disclosure, and capital supervision in the real estate sector, prudently prevent, resolve, and deal with real estate-related risks, and promote high-quality development of real estate. Second, support reasonable financing. Support refinancing by listed real estate development enterprises and the comprehensive use of share issuance, targeted convertible bonds, cash, and other tools to acquire housing-related assets. Increase bond financing support; support real estate development enterprises in issuing corporate bonds for real estate projects that meet policy requirements, and encourage the issuance of commercial mortgage-backed securities (CMBS) and real estate asset-backed securities (ABS). Support the issuance of real estate investment trusts (REITs) based on eligible rental housing, urban renewal, and other projects, or their use as REIT expansion assets, and steadily advance the development of commercial real estate REITs. Support qualified private fund managers in establishing private real estate investment funds. Third, optimize regulation. Optimize access regulation for securities issuance by real estate development enterprises, highlighting the “project-based” financing feature; optimize information disclosure regulation, focusing on the implementation of accounting standards; strictly strengthen ongoing supervision and look-through supervision of raised funds; strictly prevent and crack down on illegal activities by issuers such as fraudulent issuance, false information disclosure, and misappropriation of raised funds, and increase punishment for systemic and organized fraud. Fourth, prevent and resolve risks. Implement the “four early” requirements, establish and improve mechanisms for pre-research and pre-judgment of risks involving the capital market in the real estate sector, and strengthen coordinated regulation of equities, bonds, and funds. Steadily and orderly carry out delisting supervision of listed real estate development enterprises and smooth diversified delisting channels. Cooperate with local governments to promote the disposal and clearing of defaulted real estate bonds, and enrich diversified risk disposal mechanisms for real estate bonds. (From the Wall Street CN app)

US Dollar:

The US dollar index rose 0.55% overnight to 99.68. Weekly: the US dollar index rose for the week, up 0.84% this week.

Fed Chairman Warsh said on Friday that if policymakers cannot be confident that inflation is falling back to 2% “at a clear and fast enough pace,” the Fed “still has work to do.” This suggested that if price pressures do not improve, the Fed’s next move could be to raise interest rates. Warsh made clear that he still adheres to the Fed’s long-standing policy path of managing inflation by adjusting interest rates. This significantly increased the likelihood that the Fed’s next step will be a rate hike, which could put him at odds with President Trump, who has long sought rate cuts. The remarks largely removed the ambiguity left previously. At a press conference in late July, Warsh declined to respond in detail to the question of whether rate hikes are needed to address inflation that has risen substantially this year and has remained above the Fed’s target for more than five consecutive years. After Fed Chairman Warsh spoke about curbing inflationary pressures, market bets on Fed rate hikes heated up markedly, and the dollar strengthened. Independent analyst Tai Wong noted: “Chairman Warsh made clear that inflation has yet to slow materially and stressed that the Fed ‘still has work to do,’ a statement that triggered heavy selling in the gold market. While this may still be more thunder than rain as a communication strategy, it was enough to leave the market viewing the September meeting as a standoff with rate hike and pause odds roughly balanced.” Warsh’s comments were his clearest public acknowledgment to date that further rate hikes may be needed to ease price pressures. In his remarks, he pointed out that if policymakers cannot be confident that underlying inflation is returning steadily to the 2% target, the Fed “still has work to do.” As a result, traders quickly increased bets on a September rate hike. (Jin10 Data APP)

Eugene Epstein, head of trading and structured products at Moneycorp in Stamford, Connecticut, said of Fed Chairman Warsh’s remarks: “We’ll see what effect it has on the next meeting next month. But I feel like I’m now watching him give the same speech for the fourth, maybe even the fifth, time. Because frankly, he does talk about focusing on inflation. But he won’t give forward guidance, and inflation isn’t moving in the direction they want.” (Jin10 Data APP)

In addition, US job growth in the year through March was milder than previously reported, highlighting the downward trend in the labour market, which was also why the Fed cut interest rates in 2025 despite persistent inflation. According to preliminary benchmark revisions released by the Bureau of Labor Statistics on Friday, nonfarm payrolls may be revised down by 79,000, or 0.1%. Final data will be released early next year. (Jin10 Data APP)

Deutsche Bank economists expect the Fed to raise interest rates by 25 basis points each in September and December. Fed Chairman Warsh emphasized in his Jackson Hole speech the need to bring inflation back to the 2% target and sent a clearly hawkish signal. Deutsche Bank believes that unless upcoming economic data are “clearly weaker than expected,” the bar to avoiding a 25-basis-point rate hike in September is already high. The market also quickly raised its rate hike bets: CME data showed the probability of cumulative rate hikes of 50 basis points or more by December rose to 51%, from just 29% a day earlier; the probability of cumulative rate hikes of 25 basis points was 38%, and the probability of holding rates unchanged was only 11%. After Warsh’s speech, market bets on a September hike also heated up noticeably. (Jin10 Data APP)

Macro Front:

Next week will bring China’s August official manufacturing PMI, Germany’s August preliminary CPI m/m, the US August Dallas Fed business activity index, China’s August RatingDog manufacturing PMI, the UK August Nationwide house price index m/m, Switzerland’s July real retail sales y/y, France’s final August manufacturing PMI, Germany’s final August manufacturing PMI, France’s final August manufacturing PMI, Germany’s final August manufacturing PMI, the eurozone’s final August manufacturing PMI, the UK’s final August manufacturing PMI, the UK’s July Bank of England mortgage approvals, the eurozone’s preliminary August CPI y/y, the eurozone’s preliminary August CPI m/m, the eurozone’s July unemployment rate, and the US final August S&P Global manufacturing PMI.
US August ISM Manufacturing PMI, US July JOLTS Job Openings, US July Construction Spending MoM, Australia Q2 GDP YoY, RBNZ Interest Rate Decision through September 2, US August ADP Employment Change, Bank of Canada Interest Rate Decision through September 2, US July Factory Orders MoM, China August RatingDog Services PMI, Switzerland August CPI MoM, France August Final Services PMI, Germany August Final Services PMI, Eurozone August Final Services PMI, UK August Final Services PMI, Eurozone July PPI MoM, US August Challenger Job Cuts, US Initial Jobless Claims for the week ending August 29, US July Trade Balance, US August Final S&P Global Services PMI, US August ISM Non-Manufacturing PMI, Eurozone July Retail Sales MoM, Canada August Employment Change, US August Unemployment Rate, US August Seasonally Adjusted Nonfarm Payrolls, US August Average Hourly Earnings YoY, US August Average Hourly Earnings MoM, and US August Global Supply Chain Pressure Index, among other data.

In addition, the following events are worth watching next week: the G20 Finance Ministers and Central Bank Governors Meeting, through September 1; the 2026 SCO Heads of State Council Meeting; the RBNZ interest rate decision and monetary policy statement; the Bank of Canada interest rate decision; a monetary policy press conference with Bank of Canada Governor Macklem and Senior Deputy Governor Rogers; the release of the US Fed’s Beige Book on economic conditions; an interview with US Fed Governor Waller; opening remarks by 2026 FOMC voting member and Cleveland Fed President Hammack at a “Fed Communities” event; and a speech by Bank of England Governor Bailey.

Notably, due to the UK Summer Bank Holiday, the LME and the London Stock Exchange will be closed next Monday.

In crude oil:

Overnight, both crude oil futures fell, with WTI crude down 0.11% and Brent crude down 0.26%. For the week, WTI futures fell 4.16%, while Brent futures fell 4.73%. The market weighed guidance from Warsh’s Jackson Hole remarks on the US Fed’s rate path and the outlook for shipping through the Strait of Hormuz.

On August 28, local time, Iran’s Islamic Revolutionary Guard Corps Navy said in a statement that US officials’ claims that the Strait of Hormuz was open were lies, aimed only at controlling oil prices and covering up their failure. The statement stressed that the IRGC’s control over this strategic waterway is absolutely firm. Iran has ordered that all vessels attempting to transit the Strait of Hormuz without Iranian coordination be denied passage. The Islamic Revolutionary Guard Corps Navy said the operation will continue until the US military action against Iran is completely ended and the US fulfills its due obligations. (CCTV) (Jin10 Data App)

On August 28 local time, Iranian President Pezeshkian, speaking about the ongoing negotiations with Oman over the Strait of Hormuz, said that the Omani side initially supported Iran but later became more reserved; however, in recent meetings the two sides reached consensus again and agreed to reopen the strait's shipping lane under a coordinated plan. He stressed that Iran is currently working to ensure that if the shipping lane is reopened under a specific framework, the US must also fulfill its obligations. These obligations include lifting blockades and sanctions, unfreezing Iranian funds, and ending Israel's hostile actions in Lebanon, among others. He also said Iran will open the Strait of Hormuz in accordance with its own national policy. "Opening the Strait of Hormuz is consistent with the framework set out in the Islamabad Memorandum of Understanding, has been accepted by all parties, and must be implemented." In addition, Pezeshkian said Iran is reaching consensus on how to interact with its neighbors and forming a common vision. (CCTV)

In addition, according to Turkish media reports, the foreign ministers of the UK, Germany, France, Egypt, Saudi Arabia, Pakistan, and Turkey will hold a meeting in Istanbul on Sunday. The meeting was initiated by Germany and Turkey, and its agenda includes ways to ensure freedom of navigation in the Strait of Hormuz and the regional security situation. The participating countries hope the meeting can send a signal to the US, emphasizing the need to continue negotiations with Iran. (Jin10 Data App)

The US Energy Information Administration (EIA): US oil production is expected to average 13.83 million barrels per day in August, a slight increase from 13.82 million barrels per day in July; in September it is expected to average 13.77 million barrels per day. (Jin10 Data App)

According to people familiar with the matter, the US government is seeking to acquire a significant interest in Venezuela's oil reserves, and the Pentagon is in talks with energy investor Alejandro Betancourt about potential cooperation involving as many as 17 oil fields across Venezuela's major oil-producing areas, including the Junín area of the Orinoco heavy oil belt and oil fields around Lake Maracaibo. The options under discussion include having the Pentagon's Office of Strategic Capital (OSC) oversee investments, and possibly even the US obtaining a lease of up to 100 years. Washington currently effectively controls Venezuelan oil sales and has eased sanctions to allow US enterprises to enter. As the war between the US and Iran disrupts Middle East supplies and pushes up global energy prices, the US hopes to accelerate the recovery of Venezuelan oil production. However, OSC has no clear authority to directly hold equity in the project, and the related plan is expected to trigger legal and political disputes in both the US and Venezuela. (Jin10 Data APP)

US President Trump announced in a social media post on the 28th that the US had reached an agreement with Venezuela to obtain “majority control” of more than 65 billion barrels of Venezuela's proven oil reserves. Trump said that the US and Venezuela worked together and, through cooperation with private enterprises, obtained “majority control” of more than 65 billion barrels of Venezuela's proven oil reserves, at no cost to US taxpayers. Trump said the deal “will more than double US oil reserves, significantly increase oil supply, and substantially lower US gasoline prices for a long time to come.” However, Trump did not disclose the specific details of the agreement, and the White House has not yet issued any official information on the matter. (Jin10 Data APP)