Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - In 2026, precious metals, especially industrial precious metals, will continue to perform strongly due to factors such as the restructuring of the international political and economic landscape, the Fed's loose monetary policy, and the improvement of the global economic growth outlook. However, the large influx of speculative funds has also increased the volatility of precious metal prices. Investors are advised to maintain a bullish stance but control their position sizes, and short hedgers should appropriately reduce their hedging ratios [4]. - In the medium term, geopolitical risks, safe - haven demand from the US mid - term elections, liquidity premiums from global central bank easing, and the weakening of the US dollar will drive London gold to 5500 - 6000 US dollars per ounce in 2026. Silver will outperform gold, with the gold - silver ratio expected to fall to 40 - 45, and London silver's target price at 120 - 150 US dollars per ounce. The performance ranking of precious metals in 2026 is silver > platinum > palladium > gold > 10%. Investors are recommended to take a bullish approach, and medium - to long - term investors can gradually build positions, with a focus on gold and a small amount of silver, platinum, and palladium. Stable investors can consider arbitrage opportunities by going long on silver and platinum and short on gold. Long hedgers should gradually establish hedging positions, and short hedgers should reduce their hedging ratios [6]. 3. Summary by Directory Precious Metal Market Conditions and Outlook - **Intraday Market**: Trump's tariff threats and the news of announcing the Fed chair nominee led to a rebound in the US dollar and some long - position profit - taking. The precious metal sector declined by over 5%, and London gold fell to around 5100 US dollars per ounce [4]. - **Domestic Precious Metal Market**: The closing prices of all domestic precious metal indices decreased. The decline of the Guangzhou Futures Palladium Index was the largest at - 12.02%, and the decline of the Shanghai Gold Index was - 7.07% [5]. - **Medium - term Market**: Due to Trump's policy shift, the Fed's and ECB's balance - sheet expansion, and other factors, the US dollar will be weak. Geopolitical risks, safe - haven demand, liquidity premiums, and the weak US dollar will drive precious metals higher. Silver will be stronger than gold, and the gold - silver ratio is expected to decline [6]. Main Macroeconomic Events/Data - Iran will hold a military exercise in the Strait of Hormuz from February 1st to 2nd, including live - fire shooting [18]. - South Africa is considering imposing a maximum 50% tariff on vehicle imports from China and India to protect its auto industry. In 2024, Chinese vehicles accounted for 53% of South Africa's total vehicle imports, and Indian vehicles accounted for 22% [18]. - Trump said Putin agreed to suspend air strikes on Ukraine for a week, plans to announce the next Fed chair nominee next week, and the US plans to reopen Venezuelan airspace for US oil companies to conduct surveys [18]. - The US Senate failed to advance a government funding bill, and the US federal government may face a partial shutdown as funds for several federal departments will run out on January 30th [18].

Core Viewpoint - The recent announcement by President Trump to increase tariffs on various products imported from South Korea from 15% to 25% has created significant turmoil in South Korean politics, highlighting the fragile nature of trade agreements and the pressure on South Korea to comply with U.S. demands [1][3][20]. Group 1: Tariff Increase and Immediate Reactions - President Trump announced a 10% increase in tariffs on products imported from South Korea, raising the rate from 15% to 25% [1]. - The South Korean government reacted swiftly, holding an emergency meeting and sending the industry minister to negotiate in the U.S. [1]. - The tariff increase was not entirely unexpected, as it followed a trade agreement signed in 2025 that many viewed as unfavorable to South Korea [3][20]. Group 2: Trade Agreement Context - The 2025 trade agreement required South Korea to increase investments in the U.S. and purchase more American energy products, while the U.S. would reduce tariffs on certain goods [3][5]. - The scale of the required investments has caused significant concern among South Korean financial officials [3][5]. - Internal political divisions in South Korea regarding the need for parliamentary approval of the agreement have stalled its implementation [5][7]. Group 3: Political and Economic Implications - The delay in executing the agreement has led to increased public dissent in South Korea, questioning the benefits of the deal and the rationale behind supporting the U.S. energy sector [7][14]. - The situation has been exacerbated by the perception that the U.S. is willing to impose tariffs on allies, as seen with Canada also facing threats of high tariffs [9][12]. - The U.S. has demonstrated a clear willingness to use tariffs as a diplomatic tool, which raises concerns for South Korea's economic stability and political autonomy [14][20]. Group 4: Future Considerations for South Korea - South Korea faces a critical decision: either push forward with the agreement despite domestic opposition or confront the U.S. to renegotiate terms [22][26]. - The current crisis serves as a wake-up call for South Korea regarding its reliance on the U.S. and the need for a more balanced foreign policy approach [22][26]. - The implications of this tariff increase extend beyond South Korea, potentially influencing how other nations reassess their relationships with the U.S. [24][26].

Group 1 - The United States announced a 10% tariff on goods imported from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland starting February 1, with a threat to increase it to 25% if an agreement on the "complete and thorough purchase of Greenland" is not reached by June 1 [1] - This action is characterized as an extreme manifestation of unilateralism and power politics, violating international law based on the principles of the United Nations Charter and undermining the current international order [1] - Greenland, as an autonomous territory of the Kingdom of Denmark, has clear legal and historical grounds for its sovereignty, and the U.S. perception of foreign territory as a commodity reflects a colonial mindset [1] Group 2 - European countries have united in condemnation of the U.S. tariff threats, with a joint statement from the eight affected nations expressing that such actions could lead to a dangerous cycle and damage transatlantic relations [2] - French President Macron and Swedish Prime Minister Kristersson have explicitly criticized the U.S. threats as unacceptable and tantamount to extortion, while the Netherlands labeled the behavior as improper [2] - The European Parliament has frozen the approval process of a previously agreed trade deal with the U.S., and several EU countries are considering imposing tariffs on U.S. goods worth €93 billion or restricting U.S. companies' access to the EU market as a countermeasure [2]

Core Viewpoint - The U.S. plans to impose a 10% tariff on goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland starting February 1, escalating to 25% on June 1, until an agreement on the "complete and total purchase of Greenland" is reached [2][3] Group 1: U.S. Tariff Announcement - The U.S. will impose a 10% tariff on imports from eight European countries, increasing to 25% later, as leverage for negotiations regarding Greenland [2] - The estimated cost for the U.S. to purchase Greenland could reach $700 billion, according to experts [3] Group 2: European Response - Danish Foreign Minister Rasmussen expressed surprise at the U.S. tariff announcement and stated that Denmark is in close contact with the EU and other partners regarding the issue [3] - Protests occurred in multiple cities in Denmark and Greenland against the U.S. plans, with demonstrators emphasizing that "Greenland belongs to the Greenlanders" [3] - Swedish Prime Minister Kristersson stated that Sweden will not allow itself to be "extorted" and emphasized that only Denmark and Greenland can decide their own affairs [6] - The UK Prime Minister criticized the U.S. tariff approach as "completely wrong," asserting that Greenland's future should be determined by its people [6] - French President Macron called the tariff threat "unacceptable" and expressed support for Denmark's sovereignty [6] - Norwegian Prime Minister Støre stated that such threats are unacceptable among allies and reaffirmed Norway's support for Denmark [6] Group 3: Broader Implications - The European Council President and the European Commission President issued a joint statement emphasizing the importance of respecting sovereignty and territorial integrity as fundamental principles of international law [7] - The European Parliament's International Trade Committee Chairman expressed disbelief at the use of tariffs as a political weapon and urged the EU to activate countermeasures [7]

Group 1 - The European Parliament members stated that the trade agreement reached between the US and Europe last July will not be approved due to US threats regarding Greenland [1] - US President Trump announced a 10% tariff on goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland starting February 1, which will increase to 25% on June 1 until an agreement on the "complete and total purchase of Greenland" is reached [1][5] - The EU has responded by suspending the trade agreement, leading to increased uncertainty in US-EU trade relations [1][10] Group 2 - French President Macron emphasized Europe's responsibility to protect Greenland, which is an EU territory, and announced participation in joint military exercises in the region [4][5] - The EU Parliament's largest party, the European People's Party, stated that the escalating tensions mean they cannot support the trade agreement, and they called for the suspension of zero tariffs on US products [10][11] - Analysts noted that Trump's use of tariffs as a negotiation tool reflects a significant internal adjustment within the US, as cracks between the US and its allies become more apparent [8][10] Group 3 - The EU's anti-coercion mechanism, which has never been used, is designed to deter and respond to coercive actions by third countries, potentially including tariffs and restrictions on market access [13] - Experts suggest that the upcoming weeks will be crucial for observing the EU's internal dynamics and responses to US actions, particularly regarding military exercises involving Nordic countries and other EU members [13]

Core Points - The meeting between Japanese Prime Minister Sanna Marin and U.S. President Trump in Tokyo has sparked significant public protests in Japan against the strengthening of the Japan-U.S. military alliance and military expansion [1][2] - Protesters argue that the U.S. is weaponizing tariffs, which undermines economic globalization and serves to maximize U.S. interests at the expense of Japan's independent foreign policy [1] - The Japanese government plans to accelerate its defense spending goals, aiming for defense expenditures to reach 2% of GDP earlier than previously scheduled, and to revise key security documents by the end of 2026 [2] Group 1 - Public protests against Trump's visit highlight widespread discontent regarding military alliances and regional stability [1] - The "Opposition to Trump's Visit Committee" criticizes U.S. tariff policies as violent and self-serving, calling for Japan to pursue an independent diplomatic path [1] - Local residents in Okinawa express concerns over the negative impacts of U.S. military presence, including safety incidents and noise pollution [1] Group 2 - The revision of Japan's security documents is seen as a departure from the country's pacifist constitution, with concerns that increased military spending will burden taxpayers amid rising living costs [2] - The U.S. and Japan reaffirmed their commitment to a stronger alliance and the "Free and Open Indo-Pacific" initiative during the summit [2] - Trump welcomed Japan's plans to increase procurement of U.S. defense equipment, indicating a deepening military cooperation [2]

Core Viewpoint - The recent announcement by Trump regarding a potential 100% tariff on Chinese goods is seen as a political maneuver rather than a genuine economic strategy, aimed at rallying support ahead of upcoming elections [1][4][33]. Group 1: Tariff Announcement and Political Context - Trump's call for a 100% tariff is not a spontaneous decision but a strategic move to elevate the rhetoric surrounding trade with China [3][5]. - The timing of this announcement is crucial, as it coincides with significant domestic elections, suggesting that it serves to create a confrontational atmosphere to garner votes [4][11]. - The use of tariffs as a political tool has become a standard practice within Trump's administration, aimed at pressuring China into concessions [7][11]. Group 2: Economic Implications and Global Impact - The proposed tariffs, while seemingly aggressive, are part of a familiar strategy that has not effectively reversed the trade deficit or brought manufacturing back to the U.S. [13][46]. - The uncertainty created by such tariff threats affects not only U.S.-China relations but also disrupts global supply chains, impacting economies that are closely tied to China [13][44]. - U.S. consumers and businesses are likely to bear the brunt of these tariffs, raising costs and complicating the economic landscape [9][26]. Group 3: U.S. Trade Representative's Response - The U.S. Trade Representative's statement downplaying the likelihood of a trade war indicates a strategic balancing act, where aggressive rhetoric is coupled with a softer stance to manage public perception [17][21]. - This dual approach of hard and soft messaging is designed to maintain pressure on China while also preparing for potential backlash from domestic industries [21][29]. - The lack of specific details regarding the implementation of the tariffs suggests that the U.S. is still gauging reactions from both the market and China before proceeding [23][24]. Group 4: China's Position and Strategic Response - China is unlikely to respond to tariff threats with immediate concessions, as the trade dynamics have evolved into a broader competition between the two nations [29][52]. - The Chinese government has been enhancing its own economic resilience while continuing to engage in global trade, indicating a strategic approach to withstand U.S. pressures [52][54]. - Observations from other countries suggest a growing discontent with U.S. unilateralism, which may shift the balance of power in international trade discussions [54][56].

Group 1: Technology and Innovation - China's technological innovation and industrial integration have accelerated, with the value added of high-tech manufacturing increasing by 42% compared to the end of the 13th Five-Year Plan [2] - The "Three New" economy's contribution to GDP reached 18%, and the number of high-tech enterprises exceeded 500,000, marking an 83% increase since 2020 [2] - The government aims to enhance the innovation environment and capabilities during the 14th Five-Year Plan period, focusing on the integration of education, technology, and talent development [2] Group 2: Market and Economic Policies - The Ministry of Commerce expressed hope that the European side would not weaponize tariffs and would work towards eliminating market barriers to foster fair competition [2] - The 138th Canton Fair introduced measures to support enterprises, including a 50% reduction in booth fees and free services for over 31,000 participating export companies [2] - The Beijing Housing Provident Fund Management Center announced adjustments to the contribution base for the 2025 housing provident fund, with the upper limit set at 35,811 yuan and the lower limit at 2,540 yuan [2] Group 3: Company Announcements - Tianpu Co., Ltd. has experienced significant stock price fluctuations, prompting the Shanghai Stock Exchange to issue warnings to investors regarding potential risks [2][7] - Ganfeng Lithium stated its ongoing development in the power battery sector, with solid-state batteries being tested in certain vehicle models and applications in well-known drone and eVTOL companies [2]

Group 1 - The core viewpoint of the trade agreement between the US and Japan is that Japan will impose a 15% tariff on goods exported to the US, which is lower than the previously threatened 25% tariff, and Japan will invest $550 billion in key sectors like pharmaceuticals and semiconductors [1][4] - Japan's acceptance of US passenger cars without additional testing is a significant aspect of the agreement, indicating a move towards easing trade barriers [1] - The agreement is seen as a compromise from Japan, which initially sought the removal of all tariffs, and the current tariff rates may hinder Japan's economic recovery amid inflation [3][4] Group 2 - The $550 billion investment from Japan is expected to support Japanese companies, but analysts warn that the US may benefit disproportionately, potentially leading to fiscal pressure on Japan [4] - The agreement may lead to increased competition for Japan's domestic agricultural sector due to the opening of markets to US agricultural products, which could widen the trade deficit [4] - Economic forecasts suggest that the new agreement could result in a 0.55% decline in Japan's GDP within a year, highlighting potential negative impacts on the Japanese economy [4]

Report Information - Report Type: Precious Metals Monthly Report - Date: May 30, 2025 - Research Team: Macro Financial Research Team [1][2] Report Industry Investment Rating - Not provided in the report Core Viewpoints - The long - and medium - term factors driving up the gold price will continue to exist, but the short - term surge in the gold price and its extremely high price - to - earnings ratio mean that the price volatility has increased significantly. Investors are advised to maintain a long - position mindset and participate in trading with medium - to - low positions. Traders with a bearish mindset can consider the "long gold, short silver" arbitrage trade [5][39] Summary by Directory 1. 2025 January - May Precious Metals Trend Review - After the bearish impact of the Fed's hawkish interest rate cut on December 18, 2024, the gold price started a new round of rise and returned to the medium - term upward channel since March 2024 at the end of January 2025. On April 3, 2025, London gold set a new record of $3,168 per ounce. Subsequently, due to various factors such as trade policies and market sentiment, the gold price fluctuated greatly, reaching a high of $3,500 per ounce and then adjusting to the range of $3,200 - $3,360 per ounce [7] - As of 2025, London gold and silver have risen by 25.8% and 15.1% respectively, and Shanghai gold and silver futures indices have risen by 24.9% and 10.1% respectively. Gold has a strong negative correlation with the US dollar exchange rate and crude oil, a weakened positive correlation with silver, and its correlation with the real yield of US Treasury bonds has changed from negative to positive [9] 2. Analysis of Influencing Factors 2.1 US Employment and Inflation Double Risks - Trump's radical domestic and foreign reforms have disrupted the normal economic and social order in the US. In the first quarter of 2025, the US real GDP contracted by 0.27% on a quarter - on - quarter annualized basis, while the GDP deflator increased by 3.74%. The Atlanta Fed's GDPNow model estimates that the US real GDP will grow by 2.2% on a quarter - on - quarter annualized basis in the second quarter of 2025 [11][13] - In May 2025, the 1 - year inflation expectation rose to 7.3%, the 5 - year inflation expectation rose to 4.6%, and consumer confidence fell to 50.8%. In April 2025, the US added 177,000 non - farm jobs. The inflation growth rate has been at a relatively low level recently, and the inflation pressure in the second half of 2025 is not expected to rise significantly [13][14][17] 2.2 Cooling of Sino - US Tense Trade Situation - On May 8, the US and the UK reached an economic prosperity agreement. The tariff measures include mutual tariff cuts on certain products. The US - China trade situation has cooled down, with both sides reducing tariff rates. The US International Trade Court ruled that Trump's tariff actions were illegal, and the Trump administration has decided to appeal [21][23][24] - The Fed decided to keep the policy rate and balance - sheet reduction unchanged in May 2025. The Fed's interest - rate policy this year depends on the overall economic situation, employment market, and inflation. The possibility of a rate cut is much higher than that of a rate hike [25] 2.4 Weak Operation of the US Dollar and US Treasury Bonds - The 10 - year US Treasury bond yield has fluctuated, and it is expected to trade in a high - level range with a core fluctuation range of 4 - 5%. The US dollar index is expected to first decline and then rise within the range of 95 - 107. The RMB exchange rate is generally bullish, with the RMB - US dollar exchange rate expected to first rise and then fall, with a core fluctuation range of 7.1 - 7.5 [28][31] 2.4 Gold Supply - Demand and Market Structure - As of the end of May 2025, the SPDR Gold ETF holdings increased by 12.2% compared with the low point in May 2024, while the SLV Silver ETF holdings decreased by 5% compared with the high point in October 2024. As of the week of May 20, 2025, the net long ratio of gold funds decreased to 20.9%, and that of silver funds rose to 28.6% [32][35] 3. Precious Metals Price Outlook - In the long - term, geopolitical risks and the restructuring of the global trade, currency system will continue to push up the gold price's volatility center. In the medium - term, the risks of US economic stagflation and global economic recession have increased, boosting the demand for gold as a hedge against inflation. In the short - term, the gold price has maintained a medium - term upward trend despite fluctuations [36]