Core Viewpoint - The European Central Bank (ECB) maintains interest rates while monitoring the impact of the euro's appreciation on economic growth and inflation prospects [1] Group 1: ECB's Position - ECB President Christine Lagarde downplays the recent appreciation of the euro, stating that the bank does not set specific exchange rate targets but will closely watch euro movements [1] - The ECB has discussed the euro's appreciation against the US dollar but notes that the euro has recently retreated to levels consistent with its historical average since its inception [1]

Core Viewpoint - The ongoing transatlantic trade tensions are not expected to significantly impact the inflation outlook in Europe according to François Villeroy de Galhau, a member of the European Central Bank's governing council [1] Group 1 - Villeroy stated that the tariffs implemented so far have not had a major effect on European prices [1] - He mentioned that any potential new tariffs would likely have a "moderate" impact [1] - The direct inflation effects of additional tariffs may be limited, but the euro could appreciate, leading to opposite effects [1] Group 2 - Villeroy emphasized the need for the European Central Bank to remain flexible amid increasing global uncertainties [1]

1. Report Industry Investment Rating - No relevant information provided 2. Core Views of the Report - The overall macro - environment is still relatively loose, with a mild slowdown in the employment market and no obvious signs of strong inflation, which is favorable for precious metal pricing [4]. - Platinum and palladium are in a tight - balance pattern. The demand gap for platinum will remain, while the demand gap for palladium is gradually improving [4]. - The news that the EU is preparing to relax the rules on banning internal combustion engine vehicles has boosted the future demand prospects of platinum and palladium, releasing price elasticity [5]. - Platinum and palladium may operate in the context of a tight fundamental situation and a loose macro - environment. It is not recommended to chase high prices, and the strategy of buying on dips along the MA5 daily line is suggested. Also, consider the opportunity to go long on platinum and short on palladium, and keep an eye on options [5]. 3. Summary by Directory 3.1 Comprehensive Analysis and Trading Strategies - **Macro - aspect**: This week, multiple important economic data were released, showing a continuous game between economic data and the Fed's policy. The US November non - farm payrolls slightly rebounded, but the unemployment rate rose to 4.6%, reaching a four - year high. Weak PMI data on Wednesday strengthened the expectation of economic slowdown, boosting interest - rate cut trading. The unexpectedly slow CPI data on Thursday only brought a short - term market rally, and then officials questioned the data's authenticity due to the government shutdown. Fed "third - in - command" Williams' hawkish speech on Friday reversed the optimistic sentiment brought by the CPI data, pushing up the US dollar index. The uncertainty of the Fed chairperson's selection also affects the market. Overall, the employment market is cooling moderately, inflation shows no obvious signs of strengthening, and the macro - environment is still loose, which is beneficial for precious metal pricing [4]. - **Fundamental - aspect**: There is limited high - frequency fundamental data for platinum and palladium in the market. From a quarterly and annual perspective, platinum and palladium are in a tight - balance pattern. The demand gap for platinum will remain, while that for palladium is gradually improving [4]. - **News - aspect**: Bloomberg reported that the EU is preparing to relax the rules on banning internal combustion engine vehicles starting from 2035, which boosts the future demand prospects of platinum and palladium and releases price elasticity [5]. - **Futures market**: Due to the impact of news and capital allocation, the prices of non - ferrous metals in the overseas market fell on the evening of December 12, while the price of platinum soared. Affected by this, the domestic platinum price opened high and went higher on the 15th, and finally reached the first daily limit. Subsequently, the trading atmosphere in the market continued to heat up, and the trading volume increased significantly. It reached the daily limit again on the 17th, and the highest price on the 18th was close to the daily limit [5]. - **Trading strategies**: - **Single - side trading**: Platinum and palladium may operate in the context of a tight fundamental situation and a loose macro - environment. It is not recommended to chase high prices. The strategy of buying on dips along the MA5 daily line is suggested. Due to the large price fluctuations and high contract leverage, and the lack of night trading in the domestic market, there is a risk of gap - opening when the domestic market opens. It is recommended to manage positions well [5]. - **Arbitrage**: Consider the opportunity to go long on platinum and short on palladium [5]. - **Options**: Keep an eye on options [5]. 3.2 Trading and Arbitrage Data Tracking - **Weekly trading data of the Guangzhou Futures Exchange**: As of the close on Friday (December 19), the total positions of the PT contracts on the Guangzhou Futures Exchange were 33,474 lots, a net increase of 22,304 lots compared with the previous week, and the weekly trading volume was approximately 273.94 billion yuan. The total positions of the PD contracts were 14,011 lots, a net increase of 10,548 lots compared with the previous week, and the weekly trading volume was approximately 143.09 billion yuan [24]. - **Spot arbitrage**: - **Platinum**: There are conditions for arbitrage by buying Shanghai Gold Exchange platinum spot and selling long - term Guangzhou Futures Exchange contracts for delivery, with a theoretical profit of 10.76 yuan/gram (compared with - 0.77 yuan/gram last week). There are also conditions for arbitrage by buying London platinum spot and selling long - term Guangzhou Futures Exchange contracts for delivery, with a theoretical profit of 45.98 yuan/gram (compared with 5.09 yuan/gram last week) [27]. - **Palladium**: There are conditions for arbitrage by buying domestic palladium spot and selling long - term Guangzhou Futures Exchange contracts for delivery, with a theoretical profit of 47.93 yuan/gram (compared with 0.97 yuan/gram last week). There are also conditions for arbitrage by buying London palladium spot and selling long - term Guangzhou Futures Exchange contracts for delivery, with a theoretical profit of 58.72 yuan/gram (compared with 0.87 yuan/gram last week) [26][27]. 3.3 Fundamental Data Tracking - **Platinum supply and demand**: - **Supply**: It is expected that in 2025, both supply and demand for platinum will decline. However, due to the different bases and decline rates in 2024, there will still be a supply - demand gap of 26 tons in the platinum market, causing the above - ground inventory to continue to decline for the third year to 93 tons, equivalent to about 4.5 months of demand [30][32]. - **Demand**: The demand structure of platinum is relatively healthy. Although the demand for platinum has increased rapidly in some areas, the demand in the main areas such as the automotive, chemical, and jewelry industries remains relatively stable. In the future, platinum prices may break through further if there is a more severe structural shortage of spot or further digestion of the current above - ground inventory, and market investors believe that platinum will experience continuous high - speed growth in specific areas [32][33]. - **Palladium supply and demand**: - **Supply and demand situation**: It is expected that in 2025, both the supply and demand of palladium will decline. The decline in the demand side is greater than that in the supply side, and there will be a supply - demand gap of 0.5 tons, resulting in a tight - balance state. The demand tension is relatively better than that of platinum [35][36]. - **Inventory situation**: According to WPIC, the above - ground inventory of palladium is estimated to be about 350 tons by 2024, which is the lowest level in more than half a century but still equivalent to 14 months of demand. From the perspective of supply - demand balance, although the palladium price is near the cost line and at the bottom of the cycle, the fundamental factors may provide limited support for the palladium price in the short term. In the future, the palladium price may fluctuate significantly due to factors such as the macro - environment, the linkage with platinum prices, market sentiment, and structural spot shortages [36]. - **CFTC positions**: - **Platinum**: As of December 9, the long positions of platinum asset management institutions in CFTC were 37,401 lots, the short positions were 22,507 lots, and the net long positions were 14,894 lots (a net increase of 4,528 lots compared with the previous period). The long positions of platinum commercial institutions were 16,228 lots, the short positions were 41,547 lots, and the net short positions were 25,319 lots (a net increase of 2,033 lots compared with the previous period) [38][39]. - **Palladium**: As of December 9, the long positions of palladium asset management institutions in CFTC were 7,832 lots, the short positions were 7,851 lots, and the net long positions were - 19 lots (a net increase of 695 lots compared with the previous period). The long positions of palladium commercial institutions were 5,818 lots, the short positions were 7,538 lots, and the net short positions were 1,720 lots (a net increase of 229 lots compared with the previous period) [41][47]. - **Inventory situation**: - **Platinum**: As of December 19, 2025, the total CME platinum inventory was 624,733.09 troy ounces, an increase of 10,171.75 troy ounces compared with December 12. The registered inventory remained unchanged, and the unregistered inventory increased by 10,171.746 troy ounces [48]. - **Palladium**: As of December 19, 2025, the total CME palladium inventory was 189,090.40 troy ounces, a decrease of 139.30 troy ounces compared with December 12. The registered inventory increased by 2,676.286 troy ounces, and the unregistered inventory decreased by 2,815.59 troy ounces [52]. - **Lease rates**: - **Platinum**: The report provides the annualized lease rates for one - month, three - month, six - month, and one - year platinum leases [56][57]. - **Palladium**: The report provides the annualized lease rates for one - month, three - month, six - month, and one - year palladium leases [59][60].

Core Insights - Westpac Bank anticipates a significant enhancement in Australia's economic growth momentum in Q3, with GDP expected to increase by 0.8% quarter-on-quarter and an annualized growth rate rising to 2.3%, slightly above the Reserve Bank of Australia's latest forecast of 2.0% [1] Economic Performance - The standout feature of the data is the strong performance of domestic demand, which is projected to surge by 1.5% quarter-on-quarter in Q3, marking the strongest quarterly growth since early 2012 [1] - The economic recovery is becoming increasingly broad-based, supported by multiple sectors rather than relying on individual areas for growth [1] Future Outlook - As the impact of exceptionally large capital expenditure projects, particularly aircraft purchases, gradually diminishes, overall economic growth rates are expected to slow in the coming quarters [1] - However, excluding these one-off factors, the underlying growth rate for the quarter is still projected to remain at a healthy level of 0.6%, indicating inherent economic resilience [1] Productivity and Labor Costs - A significant rebound in productivity is anticipated, with an annual increase of 0.9%, which will help slow the growth rate of nominal unit labor costs to approximately 2.5% (on a six-month annualized basis) [1] - This development is seen as a positive signal for the Reserve Bank of Australia as it weighs inflation prospects [1]

Core Viewpoint - The South African Reserve Bank has lowered the benchmark interest rate by 25 basis points to 6.75%, driven by a more optimistic inflation outlook [1] Summary by Categories Monetary Policy - The decision to cut the interest rate reflects a shift in the central bank's stance towards a more favorable inflation forecast [1]

Group 1 - The core inflation indicator aligns with the 2% target, but the inflation outlook is more uncertain than before, with a stronger euro potentially further reducing inflation [1] - Wage growth is expected to slow down in the first half of 2026 according to wage tracking indicators [1] - Some downside risks to economic growth have eased, with the US trade agreement and ceasefire helping to mitigate these risks; however, the global trade policy environment remains unstable [1]

Group 1 - South Africa's retail sales growth has significantly weakened as of August 2024, indicating short-term pressure on domestic consumption [1] - Retail sales increased by 3.2% year-on-year over the three months leading to August 2024, but the monthly data shows a notable slowdown with a 2.3% increase in August compared to a revised 5.7% in July [1] - August's retail sales also saw a month-on-month decline of 1.2%, ending a previous trend of growth, highlighting a potential softening in consumer demand [1] Group 2 - The year-on-year data is adjusted for inflation, reflecting actual sales volume changes, indicating that the slowdown is not driven by price fluctuations but by a substantial reduction in consumer purchasing behavior [1] - Analysts suggest that the rapid decline in monthly data from July's strong growth to August's downturn may signal a weakening willingness for household spending, influenced by high interest rates, pressure on the job market, and sluggish growth in disposable income [1][2]

Core Viewpoint - Federal Reserve Chairman Jerome Powell discussed the U.S. economic outlook and monetary policy, emphasizing the Fed's ongoing efforts to maintain economic and financial stability while adapting policies based on economic conditions rather than preset paths [1][3]. Economic Outlook - Current data indicates that the employment and inflation outlook has not changed significantly since September, despite some delays in government data due to the shutdown [3][4]. - Economic activity growth may be more robust than previously expected, with the unemployment rate remaining low as of August, although non-farm employment growth has slowed [3][4]. - The labor market shows signs of weakness, with rising risks to employment, as evidenced by low levels of layoffs and hiring, alongside declining perceptions of job opportunities among residents and businesses [3][4]. Inflation and Monetary Policy - The core Personal Consumption Expenditures (PCE) inflation rate was 2.9% year-on-year as of August, slightly up from earlier in the year, primarily due to rising core goods prices [4]. - Short-term inflation expectations have increased this year, while most long-term inflation expectations remain aligned with the Fed's 2% target [4]. - The rising risks in the labor market have influenced the Fed's assessment of risk balance, leading to a more neutral policy stance being deemed appropriate [4]. Federal Reserve Operations - Powell indicated that the balance sheet reduction may conclude in the coming months, with the Fed aiming to ensure sufficient liquidity in the financial system to manage short-term interest rates and market volatility [1][3]. - The tightening liquidity conditions and rising repo rates have led to temporary liquidity pressures, highlighting the need for a flexible approach to the balance sheet based on experiences since 2020 [1][3].

Core Viewpoint - The European Central Bank (ECB) is experiencing internal disagreements regarding the inflation outlook, which is impacting the euro's exchange rate against the US dollar [1] Group 1: ECB's Monetary Policy - The ECB's July meeting minutes reveal a split among officials about the inflation outlook, with some believing risks are skewed to the downside due to weak growth prospects and US tariffs [1] - Other officials warn that risks may still lean towards the upside, particularly due to uncertainties related to energy and exchange rate fluctuations [1] - The ECB maintained interest rates unchanged in July, marking the end of a year-long easing cycle with the main refinancing rate at 2.15% and the deposit facility rate at 2.0% [1] Group 2: Euro to USD Exchange Rate - As of September 3, the euro is trading at approximately 1.1626 against the US dollar, reflecting a decline of 0.11% from the previous close of 1.1639 [1] - The euro's price action shows a convergence in volatility, with the Bollinger Bands indicating a middle band at 1.1625 and an upper band at 1.1782, suggesting a "gradual upward movement + high-level consolidation" structure [1] - The key resistance level for the euro is identified at the Bollinger upper band of 1.1782 and the previous high of 1.1829, with potential for repeated testing if a significant breakout does not occur [1]

Report Information - Report Name: Precious Metals Daily Review - Date: August 22, 2025 - Research Team: Macro Financial Research Team - Researchers: He Zhuoqiao, Huang Wenxin, Nie Jiayi [2] Investment Rating - The report does not mention the industry investment rating. Core View - Gold's safe - haven demand is boosted by Trump 2.0 new policies and concerns about US fiscal and financial discipline, with increased volatility but a good medium - term upward trend. London gold may trade in the range of $3120 - $3500 per ounce before rising again. Investors are advised to maintain a long - position mindset and participate in trading with medium - to - low positions. [4] - The restructuring of the international trade currency system and expectations of Fed rate cuts support the long - and medium - term bull markets of gold, but high price - to - earnings ratios increase price volatility. In the short term, London gold is expected to consolidate in the $3120 - $3500 per ounce range. Central bank easing expectations may support silver prices in the medium - to - short term. [5] Summary by Directory 1. Precious Metals Market Conditions and Outlook Intraday Market - Allegations of mortgage fraud against Fed Governor Lisa Cook by the head of the US Federal Housing Finance Agency and Trump's call for her resignation, along with concerns about US fiscal and financial discipline, drove up London gold prices to around $3340 per ounce. However, the Fed's July meeting minutes limited the price increase. Gold's safe - haven demand is boosted, and it is expected to trade in a wide range before rising again. [4] Medium - term Market - Since late April, London gold has been trading in the range of $3100 - $3500 per ounce. The decline in international trade uncertainty weakens gold's safe - haven demand, while the restructuring of the international trade currency system and Fed rate - cut expectations support the price. The ratio of London gold to silver has stabilized after a correction. Gold's long - and medium - term bull markets are supported, but price volatility is increasing. London gold is expected to continue to consolidate in the $3120 - $3500 per ounce range. Central bank easing expectations may support silver prices. [5] Domestic Precious Metals Market - The Shanghai Gold Index closed at 776.93, up 0.32%; the Shanghai Silver Index closed at 9182, up 1.31%; Gold T + D closed at 771.66, up 0.24%; Silver T + D closed at 9144, up 1.35%. [5] 2. Precious Metals Market - Related Charts - The report provides multiple charts, including Shanghai gold and silver futures indices, London gold and silver spot prices, the basis of Shanghai futures indices against Shanghai Gold T + D, gold and silver ETF holdings, the gold - to - silver ratio, and the correlation between London gold and other assets. [7][9][11] 3. Major Macroeconomic Events/Data - Trump called on Fed Governor Cook to resign, and Cook refused to resign under pressure. [17] - The Fed's July meeting minutes showed that almost all policymakers thought it appropriate to keep the federal funds rate target range at 4.25% - 4.50%. [17] - Russia expects to continue supplying oil to India, and hopes to hold a tripartite meeting with India and China soon. [17]