Core Viewpoint - The recent increase in gold prices is primarily driven by concerns over a weakening U.S. labor market, expectations of Federal Reserve rate cuts and balance sheet expansion, global fiscal expansion, and continued central bank gold purchases [1][2][3][4]. Group 1: Federal Reserve Actions - The Federal Reserve plans to purchase $40 billion in Treasury bonds monthly starting December 12, indicating a significant liquidity injection into the financial system [2] - Predictions suggest that the Fed will buy approximately $500 billion in short-term Treasury bonds by 2026, signaling aggressive liquidity measures [2] Group 2: Global Fiscal Expansion - The U.S. government has increased its debt ceiling by $5 trillion, with projected fiscal deficits rising by $3.4 trillion over the next decade [3] - Japan has approved a ¥21.3 trillion (approximately $135.4 billion) economic stimulus package, reflecting a trend of fiscal expansion [3] - The UK's fiscal buffer has expanded to £22 billion, with net public sector borrowing projected to be £138.3 billion for the 2025-2026 fiscal year, higher than previous estimates [3] Group 3: Japanese Monetary Policy - The Bank of Japan is expected to announce a 25 basis point interest rate hike on December 19, which may lead to a reversal of the "carry trade" that has historically benefited from low interest rates [4] - As Japanese institutions begin to repatriate funds from U.S. and overseas bonds, demand for U.S. Treasuries may decrease, conflicting with the U.S. Treasury's need to issue new debt [4] Group 4: Market Implications - The ongoing central bank gold purchases, geopolitical risks, and expectations of Federal Reserve rate cuts and global fiscal policy easing are likely to support gold prices in the medium to long term [4] - However, short-term risks include potential reversals in Japanese "carry trades" and technical sell-offs in gold and silver markets due to rebalancing in the Bloomberg Commodity Index [4]

1. Report Industry Investment Rating - No specific investment rating for the industry is provided in the report. 2. Core View - Due to the expectations of the Fed's interest - rate cut and balance sheet expansion, production disturbances in multiple overseas copper mines, and the expectations of loose domestic fiscal and monetary policies, the price of Shanghai copper may be cautiously bullish [3]. 3. Summary by Relevant Catalogs 3.1 Shanghai Copper Futures - On December 12, 2025, the closing price of the active Shanghai copper futures contract was 92,210, up 360 from the previous day; the trading volume was 138,584 lots, down 7,482; the open interest was 190,380 lots, down 9,993; the inventory was 31,461 tons, up 2,530; the Shanghai copper spread was 455, up 605; the average price of SMM 1 electrolytic copper was 92,665, up 965 [3]. 3.2 London Copper - On December 11, 2025, the closing price of the LME 3 - month copper futures (electronic trading) was 11,833.5, up 274 from the previous day; the total inventory of registered and cancelled warrants was not available; the spread of the LME copper futures 0 - 3 month contract was 0, down 11.69; the spread of the LME copper futures 3 - 15 month contract was 0, down 243.5; the ratio of Shanghai - London copper prices was 7.7923, down 0.15 [3]. 3.3 COMEX Copper - On December 11, 2025, the closing price of the active COMEX copper futures contract was 5.488, up 0.16 from the previous day; the total inventory weight was 447,298, up 4,251 [3]. 3.4 Supply - Demand Analysis - Supply side: There are production disturbances in multiple domestic and foreign copper mines, leading to a negative China copper concentrate import index and a tight domestic copper concentrate supply - demand expectation. The supply of scrap copper has increased, and the processing fees for domestic crude copper or anode plates have risen. The maintenance capacity of copper smelters in December has decreased month - on - month. - Demand side: The capacity utilization rates of refined copper rods and recycled copper rods have decreased compared to last week, while those of copper wires and cables, copper enameled wires, copper strips, copper tubes, and brass rods have increased. High copper prices have led to downstream rigid - demand purchases. - Inventory side: The social inventory of electrolytic copper in China, the inventory of electrolytic copper in the LME, and the inventory of COMEX copper have all increased compared to last week [3]. 3.5 Trading Strategy - The main strategy is to lay out long positions when the price drops. Pay attention to the support level around 85,000 - 90,000 and the resistance level around 97,000 - 107,000 for Shanghai copper; the support level around 10,600 - 11,000 and the resistance level around 12,300 - 13,500 for London copper; and the support level around 5.0 - 5.2 and the resistance level around 5.6 - 6.0 for US copper [3].

1. Report Title - The report is titled "Shanghai Copper Daily Report 20251211: High Prices Suppress Downstream Demand and Pressure Copper Prices" [2] 2. Key Data of Shanghai Copper Futures Active Contracts 2.1 Trading Volume - On December 10, 2025, the trading volume was 143,313 hands, compared with 146,066 hands on December 9, 2025, a decrease of 44,343 hands [3] 2.2 Open Interest - On December 10, 2025, the open interest was 200,373 hands, compared with 210,572 hands on December 9, 2025, a decrease of 10,199 hands [3] 2.3 Inventory - On December 10, 2025, the inventory was 28,931 tons, compared with 29,531 tons on December 9, 2025, a decrease of 600 tons [3] 3. Other Copper - Related Data 3.1 Copper Spot Premium and Discount - SMM 1 electrolytic copper - semi - average price on December 10, 2025, was 92,215, a decrease of 515 compared with the previous day [3] - SMM flat - water copper open - premium/discount - average price on December 10, 2025, was - 55, a decrease of 10 compared with the previous day [3] 3.2 Copper Price Spreads - Shanghai - London copper price ratio on December 10, 2025, was 7.9458 [3] - LME 3 - month copper futures closing price (electronic trading) on December 10, 2025, was 11,559.5 [3] 4. Supply - Demand - Inventory Analysis 4.1 Supply - There are disturbances in the production of multiple copper mines at home and abroad, making the Chinese copper concentrate import index continuously negative, leading to a tight domestic copper concentrate supply - demand expectation. The scrap copper supply has increased, and the domestic processing fees for blister copper or anode plates have risen. The maintenance capacity of copper smelters in December has decreased compared with the previous month [3] 4.2 Demand - The capacity utilization rates of refined copper rods and recycled copper rods have decreased compared with the previous week, while those of copper wires and cables, copper enameled wires, copper strips, copper tubes, and brass rods have increased. High copper prices have led to downstream rigid - demand procurement [3] 4.3 Inventory - The social inventory of Chinese electrolytic copper, the inventory of LME electrolytic copper, and the COMEX copper inventory have all increased compared with the previous week [3] 5. Core Viewpoint - The expectation of the Fed's interest - rate cut and balance - sheet expansion, and production disturbances in multiple overseas copper mines exist. However, high copper prices suppress downstream demand and lead to the expectation of inventory accumulation, which may cause the Shanghai copper price to adjust [3] 6. Trading Strategy - Wait for the price to fall and then layout long positions. Pay attention to the support level of 85,000 - 90,000 and the resistance level of 97,000 - 107,000 for Shanghai copper; the support level of 10,600 - 11,000 and the resistance level of 12,300 - 13,500 for London copper; the support level of 5.0 - 5.2 and the resistance level of 5.6 - 6.0 for US copper [3]