Core Viewpoint - The recent U.S. government shutdown, occurring after seven years, reflects deeper issues of political polarization and fiscal challenges rather than just procedural problems [1][2][5] Group 1: Government Shutdown Implications - The shutdown is seen as a precursor to more significant fiscal battles ahead, particularly as the midterm elections approach, with ongoing tensions between the two parties regarding fiscal expansion and debt issues [2][5] - Historical data suggests that government shutdowns typically last around two weeks, but current predictions indicate a less than 50% chance of resolution by October 14, down from nearly 70% [5] - The Biden administration is expected to apply pressure on Democrats during the shutdown, including potential layoffs of federal employees and freezing significant federal funds [5] Group 2: Economic Impact - The immediate economic impact of the shutdown is expected to be limited, with a historical reference indicating that each week of shutdown may reduce GDP by approximately 0.1 percentage points, likely to be recovered later [8] - Employment risks are more concerning, particularly if layoffs of federal employees occur, which could lead to a temporary rise in unemployment rates [8] - The shutdown has disrupted the Federal Reserve's ability to make decisions, with private employment data becoming increasingly important; recent ADP employment figures showed a decline, influencing market expectations for interest rate cuts [8][9] Group 3: Fiscal Sustainability Concerns - The deepening divide between the two parties raises concerns about the sustainability of U.S. fiscal policies, with potential difficulties in implementing key spending cuts in future legislation [1][2][11] - The ongoing political struggle over healthcare spending reflects the heightened tensions and may complicate future fiscal negotiations [9][11] - The U.S. faces increasing debt pressures, with current debt interest rates at around 3.4%, which are significantly lower than the Federal Reserve's policy rates, complicating the economic landscape [11][13] Group 4: Investment Outlook - In the context of a declining debt cycle, the U.S. dollar is expected to remain weak, while the value of gold as an investment continues to rise, particularly as Western Hemisphere investors are under-allocated in gold [1][2][13] - The yield curve for U.S. Treasuries is anticipated to widen further, and the performance of U.S. equities will depend on the sustainability of narratives surrounding AI and other factors [13]

Summary of Key Points from the Conference Call Industry or Company Involved - The discussion primarily revolves around the **U.S. fiscal situation** and the implications of **tariff policies** introduced by the Trump administration. Core Points and Arguments 1. **Unsustainable U.S. Fiscal Situation**: The total public debt held by the U.S. is nearing **$30 trillion**, accounting for **98%** of GDP, which is close to historical highs, raising concerns about the sustainability of U.S. debt assets and increasing global asset price volatility [1][2][3] 2. **Federal Spending Structure**: Mandatory spending constitutes about **60%** of federal expenditures, with net interest payments growing rapidly, surpassing defense spending and reaching **13%** of the budget. This rigid spending structure complicates efforts to reduce the fiscal deficit [1][3] 3. **Impact of Tariff Policies**: The Trump administration's tariff policies were intended to address fiscal issues, but the uncertainty surrounding these policies has accelerated the de-dollarization process, raising concerns about the demand for U.S. debt, particularly long-term bonds [1][4] 4. **Short-term Debt Renewal Pressure**: Although there is a significant amount of U.S. debt maturing in **2025**, the monthly maturity amounts are relatively dispersed, with **80%** being short-term debt, which alleviates immediate renewal pressures [4][5] 5. **Credit Rating Downgrade**: Moody's downgraded the U.S. sovereign credit rating from **3** to **21**, reflecting growing concerns about fiscal sustainability and market confidence in U.S. debt [2][6] 6. **Ineffectiveness of Tariff Increases**: Even with potential increases in tariffs, the projected revenue gains fall significantly short of the Trump administration's targets, with estimates suggesting only **$300-400 billion** annually, compared to the claimed **$6 trillion** over ten years [8][15] 7. **Historical Context of Tariff Policies**: The Smoot-Hawley Tariff Act of the 1930s serves as a historical example of how high tariffs can lead to retaliatory measures and a collapse in international trade, which could be a risk with current policies [9][12] Other Important but Possibly Overlooked Content 1. **Long-term Risks**: There are concerns about potential technical defaults or supply shocks, but these risks are considered limited due to historical political negotiations that have typically avoided defaults [2][5] 2. **Economic Implications**: The rising debt burden could crowd out private investment and consumption, limiting monetary and fiscal policy flexibility and exacerbating uncertainty around U.S. dollar assets [3][4] 3. **Political Dynamics**: The current political landscape, with the Republican Party controlling both houses of Congress, may reduce the likelihood of budgetary conflicts that could lead to technical defaults [5][6] 4. **Trade Volume Considerations**: The potential for reduced trade volumes and retaliatory actions from trading partners could undermine the effectiveness of tariff increases in generating revenue [15]

Group 1 - The core issue is the alarming level of U.S. national debt, which has surpassed $37 trillion, with a daily increase of $22 billion, raising concerns about market confidence [3][5][9] - The 30-year Treasury yield has surged to nearly 5%, the highest since October of the previous year, indicating heightened market anxiety [3][5] - The fiscal deficit reached nearly $2 trillion last year, exacerbated by tax cuts and increased spending, leading to questions about how to address this financial gap [5][9] Group 2 - Political factors are complicating the situation, with potential interference in the Federal Reserve's independence, which could further destabilize market confidence [5][9] - September has historically been a challenging month for the bond market, with average negative performance over the past decade, and this year is compounded by political uncertainties [7][9] - Foreign investment confidence in U.S. debt is waning, as evidenced by rising yields not translating into a stronger dollar, indicating concerns about fiscal sustainability [9][11] Group 3 - Upcoming economic data releases, such as non-farm payroll and inflation figures, could significantly impact market stability, with potential for volatility in the coming weeks [11] - The current market dynamics reflect a complex interplay of fiscal and political uncertainties, with fears that the Federal Reserve may be influenced by political pressures rather than economic indicators [9][11]

Group 1 - The latest report from the U.S. Treasury indicates that the top three foreign holders of U.S. Treasury securities increased their holdings in June, reflecting a subtle shift in allocation strategies amid global economic uncertainty [1] - Japan, the largest foreign holder of U.S. Treasuries, increased its holdings by $12.6 billion in June, bringing its total to $1.1476 trillion, continuing a trend of increasing confidence in U.S. debt [2] - The UK significantly increased its holdings by $48.7 billion, raising its total to $858.1 billion, surpassing China to become the second-largest foreign holder of U.S. Treasuries [2] Group 2 - In June, total foreign holdings of U.S. Treasuries reached $9.1277 trillion, an increase of $80.2 billion from the previous month, primarily driven by official funds [3] - Foreign investors net purchased $192.3 billion in long-term U.S. securities in June, with private foreign investment accounting for $154.6 billion, indicating a renewed preference for U.S. long-term assets [3] - The expectation of interest rate cuts has supported the U.S. Treasury market, contributing to a downward trend in Treasury yields, which has created favorable conditions for foreign investors to increase their holdings [3]

Core Viewpoint - The U.S. Treasury Department's TIC report indicates an increase in U.S. Treasury holdings by major foreign creditors, with China increasing its holdings for the first time since March, while Japan and the UK also raised their positions significantly [1][2]. Group 1: U.S. Treasury Holdings - As of June, China holds $756.4 billion in U.S. Treasury securities, a slight increase of $1 billion from the previous month, continuing a trend of holding below $1 trillion since April 2022 [1]. - Japan's holdings increased by $12.6 billion to $1.1476 trillion, maintaining its position as the largest foreign holder of U.S. debt [1]. - The UK saw a substantial increase of $48.7 billion, bringing its total to $858.1 billion, surpassing China to become the second-largest holder of U.S. debt since March [1]. Group 2: Foreign Investment in U.S. Debt - Total foreign holdings of U.S. Treasury securities reached $9.1277 trillion, an increase of $80.2 billion from the previous month [1]. - The report highlights a general trend of increasing foreign investment in U.S. debt, despite fluctuations in individual country holdings [1]. Group 3: U.S. Treasury Yield Trends - Following expectations of interest rate cuts, U.S. Treasury yields have been declining, with the 10-year yield fluctuating between 4.3% and 4.45% in July [2]. - The market's response to strong labor market data and renewed tariff tensions initially pushed yields up to 4.5%, but subsequent Fed comments and economic data led to a downward trend [2]. Group 4: U.S. Fiscal Sustainability Concerns - The U.S. federal government debt has surpassed $37 trillion, raising concerns about fiscal sustainability as the government continues to borrow at record levels [2]. - The Congressional Budget Office estimates that tax and spending policies promoted by the Trump administration could increase the fiscal deficit by approximately $4.1 trillion over the next decade, further exacerbating the debt situation [2]. Group 5: Future Market Volatility Factors - Potential factors that may cause volatility in the U.S. Treasury market include the impact of rising short-term debt post-debt ceiling resolution, uncertainties surrounding tax and fiscal policies, and the increasing sensitivity of non-bank financial institutions to liquidity and risk expectations [3].

Group 1 - The core argument is that the U.S. government's use of tariffs as leverage in negotiations has significant implications for global markets, particularly in terms of volatility and the reassessment of trade dynamics [3][4][5] - The impact of tariffs has led to a milestone change in global financial markets, with U.S. Treasury yields rising to 4.6%, surpassing the growth rate of nominal GDP, raising concerns about the sustainability of U.S. debt [4][5] - The political landscape in the U.S. is increasingly polarized, with conflicts among various factions affecting the perception of U.S. global standing and potentially influencing capital flows [5][6] Group 2 - The tariffs have notably affected inflation levels and the cost of living for the middle and lower classes in the U.S., which is a critical issue for upcoming midterm elections [6][7] - Changes in supply chain structures have become evident since the initiation of the tariff war, with reports of shortages of Chinese goods in U.S. retail and price adjustments in everyday products [6][7] - The urgency for the U.S. to restart negotiations with China is driven by concerns over rare earth exports, which are crucial for the automotive industry and could significantly impact the U.S. economy [7][8] Group 3 - Internal divisions within the U.S. government and among different social classes are emerging as a fourth influential factor in trade negotiations, potentially overshadowing the previously identified key factors [9][10] - The analysis suggests that China should adopt a cautious approach in future negotiations, focusing on domestic economic stability and strategic planning rather than merely reacting to trade volume changes [10][11] - Confidence in the resilience of the Chinese economy and its manufacturing sector is emphasized, indicating a belief in the ability to navigate through tariff conflicts successfully [11]

Group 1 - The current trajectory of U.S. fiscal policy is unsustainable, with warnings from former Treasury Secretaries Henry Paulson and Timothy Geithner highlighting deeper issues such as federal fiscal unsustainability and political dysfunction in Washington [1][3] - Paulson emphasized that if political gridlock continues and fiscal deficits worsen, market patience will eventually run out, indicating a potential systemic shock to the bond market [3] - Geithner noted that while current bond yields are reasonable, market confidence is conditional on the independence of the Federal Reserve, the rule of law, and fiscal discipline [3][4] Group 2 - The passive safety of U.S. Treasuries relies heavily on the dollar's status as the global reserve currency and the liquidity of U.S. debt, but this advantage is not guaranteed [3] - The trend of de-dollarization and diversification of reserve assets by major economies could lead to a more rapid and direct impact on U.S. fiscal conditions, potentially undermining the market position of U.S. Treasuries [3] - The independence of the Federal Reserve's monetary policy is under scrutiny, as political and inflationary pressures may force the central bank to prioritize short-term fiscal needs, which could lead to a reassessment of U.S. debt's credit premium [4][5] Group 3 - Long-term market confidence in U.S. Treasuries will depend on the governance system's ability to restore rationality and self-correct under pressure, rather than on isolated events like interest rate hikes or budget negotiations [5] - If the U.S. government fails to re-establish a balance between fiscal and policy measures at the institutional level, trust in the U.S. financial system may undergo significant reevaluation [5]

Group 1 - The US dollar index has experienced a significant decline of 10.79% in the first half of the year, marking its worst performance in nearly 52 years, with a low of 96.37 reached on July 1, 2023 [1] - The Federal Reserve is currently in a rate-cutting cycle, which is expected to continue to exert downward pressure on the dollar index, with market expectations for further rate cuts in September 2023 [2] - The US economy is showing signs of weakness due to high interest rates and trade policy uncertainties, which may narrow the economic gap between the US and non-US countries, contributing to a weaker dollar index [2][3] Group 2 - The dollar's creditworthiness is under scrutiny due to persistent fiscal deficits and debt expansion, leading to a downgrade of the US sovereign credit rating from AAA to AA1 by Moody's, reflecting a decline in the credit quality of dollar assets [4] - The rise of "de-dollarization" rhetoric is weakening the dollar's status as a safe-haven asset, which may exert long-term downward pressure on the dollar index [4]

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Views of the Report - Last week, precious metal prices showed a volatile and slightly stronger trend. The "Great Beauty Act" was passed, and the approaching tariff negotiation deadline on July 9 increased market uncertainty. After the better - than - expected non - farm payroll data, the market's expectation of a Fed rate cut weakened [3]. - On July 3, the "Great Beauty Act" was passed in the House, and Trump signed it into law. It provides greater fiscal flexibility but raises concerns about fiscal sustainability and debt risks. The approaching tariff suspension deadline on July 9 intensifies concerns about global trade prospects [3]. - The US June non - farm data was 147,000, far exceeding expectations, and the unemployment rate unexpectedly dropped to 4.1%. After the report, the probability of a Fed rate cut in September in the interest rate futures market dropped from 98% to about 80% [3]. - Although the market's expectation of a Fed rate cut decreased, the tax - cut bill and the approaching tariff suspension deadline add new uncertainties, and short - term precious metal price fluctuations may increase [3]. Group 3: Summary by Related Catalogs 1. Last Week's Trading Data - SHFE Gold closed at 777.06 yuan/gram, up 8.42 yuan (1.10%), with a total trading volume of 175,040 lots and a total open interest of 178,255 lots [4]. - Shanghai Gold T + D closed at 771.57 yuan/gram, up 7.42 yuan (0.97%), with a total trading volume of 39,244 lots and a total open interest of 220,656 lots [4]. - COMEX Gold closed at 3336.00 dollars/ounce, up 49.90 dollars (1.52%) [4]. - SHFE Silver closed at 8919 yuan/kilogram, up 127 yuan (1.44%), with a total trading volume of 522,479 lots and a total open interest of 634,627 lots [4]. - Shanghai Silver T + D closed at 8885 yuan/kilogram, up 157 yuan (1.80%), with a total trading volume of 415,618 lots and a total open interest of 3,258,756 lots [4]. - COMEX Silver closed at 37.04 dollars/ounce, up 0.88 dollars (2.42%) [4]. 2. Market Analysis and Outlook - The "Great Beauty Act" became law, and the approaching tariff negotiation deadline on July 9 increases uncertainties. The better - than - expected non - farm data weakened the market's expectation of a Fed rate cut [3][6]. - The EU is trying to reach a "principled" trade agreement with the US before the deadline, and Japan plans to send its chief trade negotiator to the US again this weekend [7]. - This week, focus on the end of the US "reciprocal tariff" suspension period on July 9, the 17th BRICS Leaders' Summit, the release of the Fed's monetary policy meeting minutes, and Fed officials' speeches [7]. 3. Important Data Information - US June non - farm employment increased by 147,000, far exceeding the expected 110,000, and the unemployment rate dropped to 4.1%. After the data release, the probability of a September Fed rate cut dropped to about 80% [9]. - US June ADP employment decreased by 33,000, the first negative growth since March 2023, and service - sector employment decreased by 66,000 [9]. - US May job openings increased from 7.4 million to 7.769 million, exceeding expectations, and lay - offs decreased [9]. - US June ISM manufacturing PMI rose to 49, still in the contraction range, with new orders decreasing for five consecutive months and inflation showing signs of acceleration [9]. - US June ISM non - manufacturing index was 50.8, slightly higher than expected, with business activities and orders rebounding but the employment index contracting [10]. - US May factory orders increased by 8.2% month - on - month, the largest increase since 2014 [10]. - US May trade deficit increased by 18.7% month - on - month to 71.5 billion dollars, with imports down 0.1% and exports down 4% [10]. - Eurozone June CPI rose 2% year - on - year, reaching the ECB's target, and ECB officials said the rate - cut cycle is in the final stage [10]. - Eurozone June manufacturing PMI reached 49.5, the highest since August 2022, with new orders stabilizing and export orders stopping falling [10]. 4. Related Data Charts - Gold ETF total holdings were 947.66 tons on July 4, 2025, down 7.16 tons from last week [11]. - Ishares Silver ETF holdings were 14,868.74 tons on July 4, 2025, up 2.55 tons from last week [11]. - The report also includes various charts showing the price trends, inventory changes, non - commercial positions, and correlations of precious metals and related economic indicators [14][16][18][21][25][26][30][32][35][37][42]

Core Viewpoint - The "Big and Beautiful" bill has made significant progress with its passage in the procedural vote in the House of Representatives, indicating a shift in support among previously opposing Republican members towards President Trump's agenda [1][4]. Legislative Progress - A group of Republican opponents in the House has changed their stance to support Trump, allowing his agenda to move forward after initially threatening to block the bill [4]. - The House cleared a key procedural hurdle and voted to pass the bill, with Republican leaders working to win over dissenting votes by delaying the vote on the bill's debate rules [6]. - Republican leaders are optimistic about securing enough votes for the bill's passage in the full voting stage, although the outcome remains uncertain [7]. Financial Implications - The bill is expected to implement most of Trump's policy agenda, which could have profound effects on the U.S. capital markets and global investors if successfully enacted [13]. - Estimates suggest that the Senate version of the bill could increase the U.S. fiscal deficit by $3.9 trillion over the next decade, compared to $3 trillion for the House version, raising concerns about fiscal sustainability [14]. - If the "Big and Beautiful" bill is passed, it may support U.S. economic growth but could also heighten doubts about fiscal sustainability and balance of payments, impacting the risk premium and valuation of U.S. debt in the long term [14]. Market Reactions - Following the news of the bill's passage in the procedural vote, the U.S. dollar index experienced a significant drop, indicating market anticipation of the bill's final approval [11].