Group 1: Dollar Weakness and Market Impact - The weakening of the dollar is reshaping global market dynamics, leading to a shift in asset allocation driven by "devaluation trades" across various sectors including precious metals and emerging market currencies [1][2] - The Bloomberg Dollar Spot Index fell nearly 3% over four trading days, reaching a four-year low, primarily due to market concerns over the unpredictable policies of the Trump administration and ongoing criticism of the Federal Reserve [2] - The dollar index showed a slight rebound of 0.2%, currently at 96.4, but remains in a weak range [5][16] Group 2: Precious Metals Performance - Gold prices surged past $5200 per ounce, marking a historical high and a cumulative increase of approximately 20% this year, while silver prices have skyrocketed over 50% [1][11] - The current bull market in precious metals is attracting investors away from currencies and sovereign bonds towards hard assets, amid concerns over fiscal deficits [11][15] Group 3: Industrial Metals Strength - Industrial metals are experiencing a strong start in 2026, with aluminum prices rising 1.2% to $3246.50 per ton, reaching the highest level since April 2022, while copper and zinc also saw increases of 1.4% and 1.7% respectively [12][15] - Goldman Sachs has raised its aluminum price forecast, citing strong price performance and sustained bullish sentiment among investors [15] Group 4: Asian Currency Market - Emerging Asian currencies reached their highest levels since July last year, driven by the "dollar devaluation trade," with the MSCI Emerging Market Currency Index hitting a record high [16] - The Korean won and Malaysian ringgit led the gains, benefiting from the dollar's weakness and a recovery in growth, particularly in the technology sector [1][16]

Precious Metals Futures - Spot gold and New York futures have shown significant volatility, with spot gold rising 3.52% to a record high of $5187.37 per ounce, fluctuating between $5013.93 and $5100 during the Asia-Pacific session [1][12] - COMEX gold futures increased by 1.82%, closing at $5175.10 per ounce, and reached a historical high of $5187.20 during electronic trading [1][12] - Spot silver and New York silver futures experienced even more volatility, with New York silver surpassing $113 per ounce, gaining 6.66% before falling back below $111 [1][12] Basic Metals Futures - COMEX copper prices fell by 3.4% to $5.82 per pound [4][15] - Goldman Sachs raised its Q4 2026 aluminum price forecast from $2350 per ton to $2500, while maintaining a 2027 forecast of $2400 per ton [5][16] Energy and Shipping Futures - U.S. natural gas futures saw large fluctuations, initially dropping over 15% due to recovering production and declining demand, then rebounding over 7% before falling again [7][18] - WTI crude oil surpassed $62 per barrel, increasing by 2.28%, while Brent crude oil exceeded $66 per barrel, rising by 1.92% [8][19] Macro and Market Impact - U.S. President Trump indicated a weaker dollar, stating he is "not worried about the dollar falling," which led to a 0.95% drop in the DXY index, nearing a four-year low [10][21] - The market anticipates a potential reduction in interest rates, with news of the U.S. government planning to lift some sanctions on Venezuela's oil industry [10][21]

Group 1: Gold Market Insights - Citi's commodity research team highlights a structural shift in gold pricing, indicating that gold prices are no longer driven by marginal mining costs but by global nominal spending on gold and rigid supply capabilities [1] - The report suggests that in a bullish scenario, gold prices could rise to $6,000 per ounce, driven by a significant increase in global wealth allocation towards gold [20][21] - The analysis indicates that the current gold price is at a historical extreme, and future movements will depend heavily on capital flows and risk variables [22] Group 2: Mining Profitability and Hedging Risks - Gold prices have significantly decoupled from marginal mining costs, leading to the highest profit margins for mining companies in decades, exceeding those seen during the 1980 oil crisis [4] - The report warns that companies locking in profits through hedging may expose themselves to risks if they sell too much of the upside, especially in times of cost inflation and production shortfalls [4][9] - Historical data shows that effective hedging strategies, like those used by Mexico, can reduce income volatility without sacrificing upside potential [7][9] Group 3: Supply and Demand Dynamics - The report emphasizes that the current gold supply is only about 0.1% of global household wealth, indicating that even a small shift in wealth allocation towards gold could necessitate a doubling of mining supply to meet demand [20] - Various scenarios presented in the report illustrate how changes in gross buying and stock sales can significantly impact gold prices, with potential price levels ranging from $4,677 to $5,847 per ounce depending on stockholder behavior [16][17] - The analysis of basic metals suggests that the demand from the robotics industry could be underestimated, potentially leading to a significant increase in demand for metals like copper and aluminum [25] Group 4: Price Projections for Base Metals - For copper, Citi projects a baseline price of $13,000 per ton by 2026, with a bullish scenario potentially reaching $15,000 per ton due to factors like supply constraints and increased demand from AI data centers [29][26] - The report identifies aluminum as a structurally bullish commodity, with supply constraints from China and increasing demand from energy system restructuring [26] - Nickel is viewed as a market sentiment recovery, while zinc is expected to enter a phase of oversupply, and tin may experience scarcity pricing under bullish conditions [38][34]

Group 1 - The rising silver prices have led consumers to seek alternatives, with "investment copper bars" gaining popularity as a substitute for gold and silver [2][6] - The price of copper bars in Shenzhen's Shui Bei market ranges from 180 to 288 yuan per kilogram, despite a ban on their sale [3][4] - Some merchants express skepticism about the investment potential of copper bars, suggesting that serious investors should consider purchasing copper in bulk rather than in small quantities [4][10] Group 2 - The demand for copper is increasing due to structural growth in various sectors, including artificial intelligence, electric vehicles, and renewable energy [6][8] - The international copper price is significantly influenced by supply and demand fundamentals, making it more suitable for professional investors familiar with commodity cycles [9][10] - Investment in physical copper bars is deemed inadequate due to weak financial attributes, lack of a mature recycling system, and potential compliance risks associated with the sale of copper [10]

Core Viewpoint - The surge in global metal prices has propelled BHP Group Ltd. to reclaim its title as Australia's largest listed company, surpassing Commonwealth Bank of Australia (CBA) [1][4][9] Group 1: Company Performance - BHP's stock price rose by 3.4%, increasing its market capitalization to over AUD 253 billion (approximately USD 175 billion) [1] - Since the second half of 2025, BHP's stock has surged by 50%, with its market value increasing by over AUD 20 billion since the beginning of 2026 [4] - Copper accounted for nearly half of BHP's total revenue at the fiscal year-end, significantly boosting its financial performance [10] Group 2: Market Trends - The LME copper futures price has increased by approximately 40% since the second half of 2025, contributing to the rise in mining stocks globally [4][6] - The mining sector index in Australia has risen by 42% over the past 12 months, while the financial sector index has only increased by 2% [4] - Gold prices surged by 70% in 2025, marking the largest annual increase since 1979, while silver prices rose by 150% during the same period [5] Group 3: Investment Sentiment - Global mining stocks, including BHP and Rio Tinto, have become top investment targets for fund managers due to increased demand for industrial metals driven by AI and supply constraints [5][6] - The MSCI metals and mining index has risen nearly 90% since 2025, outperforming major tech and banking indices [6] - Fund managers in Europe have increased their net holdings in the mining sector to 26%, the highest level in four years [7] Group 4: Future Outlook - Analysts predict that the demand for copper will grow by about 50% by 2040 due to new applications in AI and defense, leading to potential supply shortages [10][11] - The current market dynamics suggest a fundamental shift in commodity investment logic, with mining stocks transitioning from defensive plays to essential portfolio anchors [7][11] - The ongoing geopolitical uncertainties and inflationary pressures are expected to further drive the demand for precious metals like gold and silver [9][10]

Citi Research January 26, 2026 January 2026 Update Metals Outlook Global Commodities Maximilian LaytonAC Global Head | Commodities max.layton@citi.com +44 20 7986 4556 1. Gold and silver outlook and corporate hedging considerations – insurance recommended in precious metals 2 Gold and silver prices and miner margins are astonishingly high Tom MulqueenAC Metals Strategy tom.mulqueen@citi.com +44 20 7986 4559 Wenyu YaoAC Metals Strategy wenyu.yao@citi.com +44 20 7986 4551 Kenny Hu, CFAAC Commodities Strategy ...

Market Overview - On January 26, the A-share market saw a collective decline, with the Shanghai Composite Index down 0.09% to 4132 points, the Shenzhen Component Index down 0.85%, and the ChiNext Index down 0.91% [1]. High-Performance Stocks - Notable high-performing stocks included: - Jinding New Materials with 5 consecutive trading limits in 9 days - Silver Industry with 5 consecutive trading limits - Sichuan Gold with 4 trading limits in 8 days - Other stocks like Tian Di Online and Zhao Jin Gold also showed strong performance with multiple trading limits [3]. Top Net Purchases - The top three net purchases on the day were: - Wangsu Technology with a net purchase of 614 million - Zhongtung High-tech with 300 million - World with 217 million [3]. Institutional Purchases - Among stocks with institutional special seats, the top three net purchases were: - Wangsu Technology with 218 million - World with 183 million - Zhongchao Holdings with 120 million [5][6]. Price Movements - Significant price movements included: - Maiwei Co. with a 45.47% increase to 342.11 - Wangsu Technology up 20.04% to 13.78 - Qianzhao Optoelectronics up 8.55% to 42.52 [4][6]. Precious Metals Market - Recent trends show spot gold and silver prices breaking historical highs, driven by geopolitical tensions and expectations of interest rate cuts by the Federal Reserve, which has increased market risk aversion [11]. - Companies involved in gold and silver production are expected to benefit significantly from rising product prices [11]. AI and Cloud Services - Reports indicate that Amazon's AI computing service has increased prices by 15%, prompting domestic cloud service providers to evaluate potential price adjustments. This is expected to lead to increased capital expenditures among major internet firms like Alibaba and Tencent, indicating strong demand for computing power [13]. Rare Metals Market - The rare metals market is showing strong performance, with prices for strategic resources like rare earths, lithium, tungsten, and nickel continuing to rise due to macroeconomic factors, supply-demand dynamics, and policy influences [17]. Stock Highlights - Notable stock movements included: - Xinke Mobile down 18.15% with a trading volume of 50.94 billion - Jinlong Automobile hitting the limit down with a trading volume of 3.86 billion - Aerospace Engineering also hitting the limit down with a trading volume of 11.11 billion [17]. Trading Dynamics - The trading dynamics showed significant net purchases from various investment groups, with notable net purchases in stocks like Wangsu Technology and Youke De, indicating active trading strategies [20][23].

Core Viewpoint - The metal lead sector has seen a significant increase of 6.22%, ranking second among concept sectors, with 32 stocks rising, including notable gains from Baiyin Youshi, Jinhui Co., and Hunan Gold, which hit the daily limit [1] Group 1: Sector Performance - The metal lead concept sector experienced a 6.22% increase, with 32 stocks rising, while the top gainers included Zhejiang Mining Co. (15.36%), Chifeng Jilong Gold Mining (9.97%), and Shanjin International (9.93%) [1] - The sector's performance was contrasted by declines in stocks such as Hebang Biotechnology (-4.46%), Dazhong Mining (-2.20%), and Yuehongyuan A (-1.99%) [1] Group 2: Capital Flow - The metal lead sector saw a net outflow of 2.382 billion yuan, with 20 stocks receiving net inflows, and 10 stocks attracting over 50 million yuan in net inflows [2] - Leading the net inflow was Hengbang Co. with 252 million yuan, followed by Xibu Mining (174 million yuan), Hunan Gold (152 million yuan), and Zhongse Co. (115 million yuan) [2] Group 3: Capital Inflow Ratios - Hunan Gold, Yuguang Gold Lead, and Jinhui Co. had the highest net inflow ratios at 75.32%, 28.78%, and 26.30% respectively [3] - The top stocks by net inflow included Hengbang Co. (10.00% increase, 9.07% turnover rate), Xibu Mining (9.99% increase, 5.51% turnover rate), and Hunan Gold (10.01% increase, 0.51% turnover rate) [3][4]

Group 1 - The core focus of the merger talks between Rio Tinto and Glencore is on copper resources, driven by increasing demand from energy transition, electric vehicles, renewable energy, and data centers [1] - If the merger is successful, it will create a mining giant with a market value of approximately $260 billion, marking one of the largest transactions in the industry [1] - The copper market is facing supply constraints due to years of underinvestment, declining ore grades, and rising development costs, which could impact the chemical industry that relies on copper as a key raw material [1] Group 2 - The trend of mining consolidation is accelerating, with other companies like Anglo American and Teck Resources also exploring mergers, indicating increased competition for global resources [2] - The potential merger between Rio Tinto and Glencore could strengthen their leading position in the industry and enhance project financing capabilities [2] - Chemical companies should focus on strengthening partnerships with mining firms, signing long-term supply agreements, and increasing technological innovation to reduce dependency on single raw materials [2]

Report Industry Investment Ratings Not provided in the document. Core Views - Gold is hitting new highs, and silver is aiming for 100. Copper prices are strengthening due to increased disruptions in copper mines. Zinc is running strongly, and lead prices are supported by the decrease in LME inventory. Tin is trending strongly with fluctuations. Aluminum is oscillating strongly, alumina is consolidating at the bottom, and cast aluminum alloy is following the trend of electrolytic aluminum. Platinum is rising sharply, and there is a need to be vigilant about the catch - up momentum of palladium. The situation of the Indonesian nickel event is undetermined, with a game between hedging and speculative positions. The concerns about nickel mines in Indonesia are intensifying, and the rise in ferronickel supports the center of gravity of stainless steel [2]. Summaries by Related Catalogs Gold - **Price and Trading Volume**: The closing price of Shanghai Gold 2602 was 1,083.56, with a daily decline of 0.49%. The trading volume was 92,211, a decrease of 11,720 from the previous day, and the open interest was 55,638, a decrease of 8,542. Comex Gold 2602 closed at 4938.40, with a daily increase of 2.11%. The trading volume was 260,253, a decrease of 130,011, and the open interest was 224,850, a decrease of 17,878 [4]. - **Inventory**: The inventory of Shanghai Gold was 102,009 kg, an increase of 2,019 kg. The inventory of Comex Gold (in troy ounces from the day before) was 36,142,880, an increase of 6,979 [4]. - **Spread**: The spread between Gold T + D and AU2602 was 0.36, unchanged from the previous day. The cost of the inter - period arbitrage of buying December Shanghai Gold and selling June was 4.77, a decrease of 0.87 from the previous day [4]. Silver - **Price and Trading Volume**: The closing price of Shanghai Silver 2602 was 23370, with a daily increase of 0.82%. The trading volume was 50,752, a decrease of 10,158, and the open interest was 43,227, a decrease of 3,587. Comex Silver 2602 closed at 96.215, with a daily increase of 3.51%. The trading volume was 104,613, a decrease of 21,772, and the open interest was 100,935, unchanged [4]. - **Inventory**: The inventory of Shanghai Silver was 589,052 kg, a decrease of 11727 kg. The inventory of Comex Silver (in troy ounces from the day before) was 422,313,658, a decrease of 4,162,840 [4]. - **Spread**: The spread between Silver T + D and AG2602 was - 48, a decrease of 11 from the previous day. The cost of the inter - period arbitrage of buying December Shanghai Silver and selling June was 73.41, a decrease of 11.3 from the previous day [4]. Copper - **Price and Trading Volume**: The closing price of the Shanghai Copper main contract was 101,340, with a daily increase of 0.64%, and the night - session closing price was 102830, with a night - session increase of 1.47%. The trading volume of the Shanghai Copper index was 443,867, an increase of 122,137, and the open interest was 658,243, an increase of 10,968. The closing price of LME Copper 3M electronic disk was 13,129, with a daily increase of 2.25%. The trading volume was 30,247, an increase of 2,046, and the open interest was 326,000, an increase of 9,606 [8]. - **Inventory and Spread**: The inventory of Shanghai Copper was 146,793, an increase of 3,620. The inventory of LME Copper was 171,700, an increase of 3,450, and the注销仓单 ratio was 26.95%, a decrease of 1.04%. The LME copper premium was - 66.06, an increase of 16.78 from the previous day [8]. - **News**: The US January S&P Global manufacturing and service PMI both expanded but were slightly lower than expected. The euro - zone January manufacturing PMI unexpectedly rose to 49.4. The union of the Mantoverde copper - gold mine in Chile condemned the company for illegally replacing workers during the 15 - day strike. China's December 2025 imports of copper ore and concentrates increased by 7.05% month - on - month and 7.32% year - on - year [8][10]. Zinc - **Price and Trading Volume**: The closing price of the Shanghai Zinc main contract was 24585, with a daily increase of 0.76%. The trading volume was 173287, an increase of 42014, and the open interest was 120175, an increase of 1617. The closing price of LME Zinc 3M electronic disk was 3269, with a daily increase of 1.11%. The trading volume was 9463, a decrease of 475, and the open interest was 230166, an increase of 1359 [11]. - **Spread and Inventory**: The Shanghai 0 zinc premium was 40, a decrease of 15. The LME CASH - 3M premium was - 32.62, an increase of 4.04. The inventory of Shanghai Zinc futures was 29994, a decrease of 306, and the LME zinc inventory was 111500, a decrease of 200 [11]. - **News**: The EU announced a six - month suspension of retaliatory tariffs against the US. Trump said the US would obtain "sovereignty" over the area where the US military base on Greenland is located [12]. Lead - **Price and Trading Volume**: The closing price of the Shanghai Lead main contract was 17095, with a daily decrease of 0.26%. The trading volume was 37429, an increase of 1418, and the open interest was 65194, a decrease of 549. The closing price of LME Lead 3M electronic disk was 2035, with a daily increase of 0.07%. The trading volume was 5194, a decrease of 2276, and the open interest was 171446, an increase of 4221 [14]. - **Spread and Inventory**: The Shanghai 1 lead premium was 25, an increase of 25. The LME CASH - 3M premium was - 44.56, an increase of 0.46. The inventory of Shanghai Lead futures was 27966, an increase of 201, and the LME lead inventory was 215175, a decrease of 3250 [14]. - **News**: The US January S&P Global manufacturing and service PMI both expanded but were slightly lower than expected. The euro - zone January manufacturing PMI unexpectedly rose to 49.4. The EU announced a six - month suspension of retaliatory tariffs against the US [14]. Tin - **Price and Trading Volume**: The closing price of the Shanghai Tin main contract was 429,570, with a daily increase of 5.03%, and the night - session closing price was 447,140, with a night - session increase of 4.09%. The trading volume was 378,618, an increase of 102,997, and the open interest was 56,254, an increase of 33,940. The closing price of LME Tin 3M electronic disk was 56,605, with a daily increase of 7.49%. The trading volume was 890, an increase of 361, and the open interest was 23,931, an increase of 202 [17]. - **Inventory and Spread**: The inventory of Shanghai Tin was 8,582, a decrease of 34. The inventory of LME Tin was 7,195, and the注销仓单 ratio was 6.57%, a decrease of 0.38%. The SMM 1 tin ingot price was 420,300, an increase of 17,050 from the previous day [17]. - **News**: The negotiation among Ukraine, the US, and Russia in Abu Dhabi, UAE, has ended. Huang Renxun, the founder of NVIDIA, visited China again [19]. Aluminum, Alumina, and Cast Aluminum Alloy - **Price and Trading Volume**: The closing price of the Shanghai Aluminum main contract was 24290, an increase of 235 from the previous day. The trading volume was 428066, an increase of 72264, and the open interest was 340575, an increase of 2615. The closing price of the Shanghai Alumina main contract was 2724, an increase of 7 from the previous day. The trading volume was 455997, a decrease of 108160, and the open interest was 494765, an increase of 5627. The closing price of the aluminum alloy main contract was 22995, an increase of 140 from the previous day. The trading volume was 9779, an increase of 1393, and the open interest was 16595, a decrease of 1319 [20]. - **Inventory and Spread**: The domestic aluminum ingot social inventory was 76.80 million tons, unchanged from the previous day. The LME aluminum ingot inventory was 50.73 million tons, a decrease of 0.20 million tons. The domestic alumina average price was 2657, unchanged from the previous day [20]. - **News**: The US January S&P Global manufacturing and service PMI both expanded but were slightly lower than expected. The Bank of Japan maintained the interest rate, and the yen rose above 158 [21]. Platinum and Palladium - **Price and Trading Volume**: The closing price of Platinum Futures 2606 was 685.90, with a daily increase of 8.21%. The trading volume of Shanghai Platinum was 26,609 kg, an increase of 8,403, and the open interest was 34,822, a decrease of 1,530. The closing price of Palladium Futures 2606 was 497.95, with a daily increase of 2.94%. The trading volume of Shanghai Palladium was 11.409 kg, an increase of 13,665, and the open interest was - 253, a decrease of 4.861 [22]. - **Inventory and Spread**: The inventory of NYMEX Platinum (in troy ounces from the day before) was 665,888, unchanged. The inventory of NYMEX Palladium (in troy ounces from the day before) was 0, an increase of 216,266. The spread between PT9995 and PT2606 was - 4.40, an increase of 5.05 from the previous day [22]. - **News**: Trump said the US would obtain "sovereignty" over the area where the US military base on Greenland is located. The US Treasury took the initial step of intervening in the foreign exchange market [25]. Nickel and Stainless Steel - **Price and Trading Volume**: The closing price of the Shanghai Nickel main contract was 148,010, an increase of 5,510 from the previous day. The trading volume was 752,840, an increase of 164,142. The closing price of the stainless - steel main contract was 14,725, an increase of 75 from the previous day. The trading volume was 488,280, a decrease of 21,328 [26]. - **Industry Chain Data**: The price of 1 imported nickel was 144,800, an increase of 3,100 from the previous day. The price of 8 - 12% high - nickel pig iron (ex - factory price) was 1,043, an increase of 9 from the previous day [26]. - **News**: The Indonesian government suspended the issuance of new smelting licenses through the OSS platform. The Chinese government implemented export license management for some steel products. The Indonesian government planned to significantly reduce the 2026 nickel ore production target [26][27][29].