1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - This week, precious metal prices showed a trend of rising first and then falling. The main contract of Shanghai Gold fell 0.8% to 773.8 yuan/gram, and the main contract of Shanghai Silver fell 1.26% to 9169 yuan/kilogram. COMEX gold fell 0.51% to $3338.50 per ounce, and COMEX silver fell 0.26% to $38.33 per ounce. The 10-year U.S. Treasury yield was reported at 4.40%, and the U.S. dollar index fell 0.80% to 97.67 [11]. - Trump's visit to the Federal Reserve building seriously interfered with the independence of the Fed's monetary policy. The trading driver of the precious metal market has shifted from economic data to the interference with the independence of the Fed's monetary policy [11]. - Next week, the Fed will hold its July interest rate meeting, and its monetary policy stance is expected to turn dovish. The Fed's interest rate cut this year will exceed market expectations. Even if Powell completes his remaining term, under Trump's strong intervention, the Fed's monetary policy will gradually turn loose, and there is a possibility that the subsequent interest rate cut will exceed market expectations. It is recommended to maintain a long - term thinking in precious metal strategies, and focus on the opportunity to go long on silver. The reference operating range of the main contract of Shanghai Gold is 760 - 794 yuan/gram, and that of the main contract of Shanghai Silver is 9075 - 10000 yuan/kilogram [11]. 3. Summary According to the Directory 3.1. Weekly Evaluation and Market Outlook - **Market Performance**: This week, precious metal prices fluctuated. Shanghai Gold and Shanghai Silver futures, as well as COMEX gold and silver, all declined to varying degrees. The U.S. dollar index also fell, while the 10 - year U.S. Treasury yield was reported at 4.40% [11]. - **Policy Interference**: Trump's visit to the Fed and his public call for interest rate cuts challenged the independence of the Fed's monetary policy. The Fed's response was not strong. The market's trading driver has shifted to the interference with the Fed's policy independence [11]. - **Interest Rate Expectation**: The market expects the Fed to keep interest rates unchanged in this meeting with a probability of 95.9%, and the probability of a 25 - basis - point interest rate cut is only 4.1%. However, it is believed that the Fed will make a dovish statement in this meeting, and there is a possibility of an unexpected interest rate cut [11]. - **Investment Strategy**: It is recommended to maintain a long - term thinking in precious metal strategies, focusing on the opportunity to go long on silver [11]. 3.2. Market Review - **Price Movement**: Shanghai Gold and COMEX gold prices declined, while Shanghai Silver and COMEX silver also showed a downward trend to a certain extent [29]. - **Position Change**: The positions of both domestic and foreign gold increased. The total position of Shanghai Gold increased by 0.49% to 422,700 lots, and the total position of COMEX gold increased by 9.12% to 489,400 lots. The position of COMEX silver increased by 1.29% to 173,700 lots, while the total position of Shanghai Silver decreased by 4.45% to 952,000 lots [31][34]. - **ETF Position**: As of July 25, the total position of gold ETFs within the Reuters statistical scope was 2170 tons, and the total position of foreign silver ETFs was 27,534 tons [39]. 3.3. Interest Rates and Liquidity - **Yield Curve**: The spread between the 10 - year and 2 - year U.S. Treasury bonds, as well as the yields of short - term U.S. Treasury bonds, are presented in the report [51]. - **Interest Rates and Inflation Expectations**: The Federal Funds Rate, overnight reverse repurchase rate, 10 - year nominal interest rate, real interest rate, and inflation expectations are analyzed [54]. - **Fed's Balance Sheet**: This week, the balance of the U.S. Treasury General Account on the liability side of the Fed's balance sheet replenished $21.5 billion in funds, and the scale of deposit reserves decreased slightly to $3.36 trillion [60]. 3.4. Macroeconomic Data - **CPI and PCE**: In June, the U.S. CPI was 2.7% year - on - year, in line with expectations and higher than the previous value; the core CPI was 2.9% year - on - year, lower than expected [65]. - **Employment Situation**: The number of initial jobless claims in the week ending July 19 was 217,000, lower than expected and the previous value [68]. - **PMI and PPI**: In June, the U.S. ISM manufacturing PMI was 49, higher than expected but still below the boom - bust line; the non - manufacturing PMI was 50.8, rising above the boom - bust line and higher than expected [71]. - **New Housing Data**: In June, the annualized total number of new housing starts in the U.S. was 1.321 million, higher than expected and the previous value; the annualized total number of building permits was 1.397 million, higher than expected and the previous value [74]. 3.5. Precious Metal Spreads - **Gold Basis**: The gold basis is presented through the chart of Gold TD - SHFE [77]. - **Silver Basis**: The silver basis is presented through the chart of Silver TD - SHFE [79]. - **Internal and External Spreads**: The internal and external spreads of gold and silver are also analyzed [82]. 3.6. Precious Metal Inventory - **Silver Inventory**: The inventory data of silver in Shanghai Gold Exchange, Shanghai Futures Exchange, and COMEX are presented through relevant charts [90]. - **Gold Inventory**: The inventory data of gold in COMEX and LBMA are presented through relevant charts [95].

Core Viewpoint - The visit of President Trump to the Federal Reserve headquarters is seen as politically motivated, focusing on both the ongoing renovation costs and expressing dissatisfaction with current interest rates [1][3]. Group 1: Federal Reserve Renovation - The renovation costs of the Federal Reserve have escalated from an initial estimate of $1.9 billion to $3.1 billion, with Trump criticizing the budget overruns [3][5]. - The renovation project has faced scrutiny from Republican lawmakers, questioning the transparency and reasonableness of the expenditures [5]. Group 2: Political Implications - Trump's visit marks the first time a sitting president has visited the Federal Reserve since 2006, highlighting a potential shift in the political dynamics surrounding the Fed's independence [2]. - The visit symbolizes Trump's attempt to reassert influence over interest rate discussions, despite the Fed's policy independence [3]. Group 3: Market Reaction - Following the visit, the S&P 500 and Nasdaq indices saw slight increases, reaching historical closing highs, indicating a stable market response to the Fed's current stance [4].

Core Viewpoint - The U.S. Treasury Secretary, Becerra, expressed concerns that the Federal Reserve's operations, aside from the renovation project mentioned by the Trump administration, may impact the independence of FOMC's monetary policy [1] Group 1 - The influence of the Federal Reserve has become excessively large [1] - There is a call for the Federal Reserve to return to its core functions [1] - A desire for the Federal Reserve to internally address its own issues was expressed [1]

Group 1 - The U.S. Treasury Secretary, Mnuchin, stated that there is no urgency in determining the successor to Federal Reserve Chairman Powell, with potential candidates possibly coming from the current Board of Governors or regional Fed presidents [1] - Mnuchin mentioned a long list of excellent candidates, including himself, NEC Director Kevin Hassett, former Fed Governor Kevin Warsh, and current Governor Christopher Waller [1] - Powell's term as Fed Chairman will end in May next year, while his term as a Board member will last until January 2028 [1] Group 2 - Mnuchin criticized the Fed officials' interpretation of the impact of Trump's tariffs, claiming their analysis is somewhat flawed [2] - He noted that manufacturers and many retailers have absorbed a significant portion of the tariff costs, and many retailers' profit margins became very robust during the pandemic [2] - Mnuchin expressed surprise at Mohamed El-Erian's call for Powell to resign, emphasizing that an internal review of the Fed's activities could benefit both Powell and the institution [2]

Group 1 - The U.S. Treasury Secretary Scott Bessent stated that it is uncertain whether the EU can achieve a trade agreement similar to Japan's, emphasizing that Japan's success was due to its "innovative financing arrangement" [1] - Japan managed to reduce its tariffs from 25% to 15% through negotiations, which included a $550 billion fund for investment in the U.S. [1] - Bessent downplayed reports of the EU planning to impose a 30% retaliatory tariff on approximately €100 billion (about $117 billion) of U.S. goods, suggesting it is a negotiation strategy [1] Group 2 - Bessent mentioned that the EU's trade surplus with the U.S. means that any escalation in trade issues would have a more severe impact on the EU [2] - He indicated that there is no rush to determine the successor to Federal Reserve Chairman Jerome Powell, with potential candidates including current board members and regional Fed presidents [2] - Bessent confirmed that the process for selecting Powell's successor is underway, but emphasized that it will ultimately be President Trump's decision [2] Group 3 - Bessent expressed surprise at Mohamed El-Erian's call for Powell to resign, stating that an internal review of the Fed's activities could benefit both Powell and the institution [3] - He noted that the expansion of the Fed's functions is jeopardizing its monetary policy independence and suggested that an internal review could be a good starting point [3] - Regular meetings and ongoing communication between Bessent and the Federal Reserve Chairman are still taking place [3]

Core Viewpoint - The potential removal of Federal Reserve Chairman Jerome Powell by President Donald Trump could significantly impact the independence of the Federal Reserve, leading to an increase in long-term U.S. Treasury yields, particularly the 30-year yield, by over 50 basis points, while the 10-year yield may also begin to rise [1][9]. Group 1: Market Reactions and Predictions - Recent discussions around the Federal Reserve's monetary policy and the possibility of leadership changes have heightened market uncertainty, which may result in long-term U.S. Treasury bonds trading at a discount [2][3]. - The expectation for interest rate cuts by the Federal Reserve has decreased significantly, from a projected 75 basis points to less than 50 basis points, due to resilient macroeconomic data and inflationary pressures from tariff policies [2][11]. - The yield spread between 5-year and 30-year U.S. Treasury bonds has reached its steepest level since 2021, indicating that the market is pricing in the risk of Powell's potential dismissal [3][8]. Group 2: Political and Economic Context - Allegations against Powell, including claims of perjury related to the Federal Reserve's renovation costs, have been made by Republican lawmakers, which could further complicate the political landscape surrounding the Federal Reserve [4][8]. - The Trump administration's push for a more accommodative monetary policy could lead to increased inflation expectations and market risk premiums, thereby affecting long-term Treasury yields [8][11]. - The ongoing concerns regarding the U.S. government's borrowing needs and budget deficits are reflected in the elevated term premium for 10-year Treasury bonds, which is at its highest level since 2014 [11].

Core Viewpoint - President Donald Trump has intensified his personal attacks on Federal Reserve Chairman Jerome Powell, suggesting that Powell should resign if allegations of misleading Congress are proven true, and he advocates for a replacement who would lower interest rates [1][2]. Group 1: Trump's Criticism of Powell - Trump labeled Powell as "terrible" during a cabinet meeting and stated that if the allegations regarding misleading Congress are confirmed, Powell should resign immediately [1]. - Trump has repeatedly criticized Powell for maintaining unchanged interest rates, arguing that it is unsuitable for the current U.S. economy [1][2]. - Following Trump's comments, several government officials, including Federal Housing Finance Agency Director Bill Pulte, echoed calls for Powell's resignation, citing deceptive testimony regarding the Fed's headquarters renovation [2]. Group 2: Federal Reserve's Response - The Federal Reserve spokesperson declined to comment on Trump's remarks, maintaining a stance of non-engagement with political criticism [2]. - Powell has denied certain media reports about the renovation project, asserting that they are misleading and clarifying that no extravagant features are included in the renovation [3][4]. Group 3: Future of Powell's Tenure - Powell's term as Fed Chairman is set to expire in May 2026, and Trump has indicated he would prefer a successor who is willing to implement rate cuts [2][5]. - Trade advisor Peter Navarro suggested that if Powell does not support rate cuts in the upcoming Federal Open Market Committee meeting, other Fed governors should intervene [5][6]. - Trump has expressed conflicting signals regarding Powell's potential dismissal, indicating both a desire for a new chairman and a temporary reluctance to fire him [6]. Group 4: Potential Successors - Christopher Waller, a current Fed governor, is viewed as a strong candidate to succeed Powell, as he is seen as data-driven and capable of balancing market trust with Trump's desire for lower interest rates [7]. - Waller's previous support for rate cuts aligns with Trump's economic policies, making him a favorable choice for the administration [7].

Group 1 - The next Federal Reserve Chairman candidate announcement is imminent, with former Fed Governor Kevin Walsh being a popular choice according to President Trump [1] - Jerome Powell was nominated as Fed Chairman during Trump's first term and has been reappointed under President Biden, serving until May 2026 [6] - Trump has criticized Powell multiple times this year and has threatened to dismiss him, although Powell asserts that Trump lacks the legal authority to do so [6] Group 2 - Trump's early release of information regarding the next Fed Chairman is seen as a pressure tactic rather than a formal announcement [6] - The Federal Reserve operates independently from the government, and historically, presidents have not intervened in its monetary policy [6] - Trump's interference in Fed policy could undermine the accuracy and credibility of monetary policy and the dollar, as it may weaken the Fed's goals of price stability and employment [7]

Core Viewpoint - Federal Reserve Chairman Jerome Powell emphasized the importance of American higher education as a "critical national asset" during his speech at Princeton University, urging students to protect democracy amidst increasing tensions with the Trump administration [1][2][4]. Group 1: Importance of Higher Education - Powell defended U.S. higher education, stating that American universities are admired worldwide and play a crucial role in scientific innovation and economic vitality [3]. - He warned graduates not to take these institutions for granted and called for active defense of democratic values [4]. Group 2: Tensions with the Trump Administration - The Trump administration has recently attacked higher education by banning Harvard University from enrolling international students and cutting billions in funding for higher education [5][6]. - This conflict has escalated as Powell, appointed during Trump's first term, faces criticism for not lowering interest rates quickly enough, with Trump labeling him as a "big loser" [8]. Group 3: Independence of the Federal Reserve - Powell intends to serve his full term despite suggestions from Trump's economic team about potentially dismissing him before his term ends [8]. - The Supreme Court has indicated that the White House does not have the authority to interfere with the Federal Reserve's monetary policy independence through the dismissal of its members [8].