Precious metal prices have once again strengthened

The price of precious metal gold strengthened again on May 9th. According to the Commodity Market Analysis System of Shengyishe, as of May 10, 2024, the spot market price of gold was 549.41 yuan/gram, an increase of 0.93% compared to the average market price of 544.36 yuan/gram on the first day after the holiday (May 6).

The trend of precious metal silver is similar to that of gold, and it has also rebounded after the holiday, with a stronger increase. According to the Commodity Market Analysis System of Business Society, the average silver market price on May 10, 2024 was 7340.67 yuan/kg, an increase of 4.61% compared to the average silver market price of 7017 yuan/kg on the first day after the holiday (May 6).

Market driven logic once again

1. The geopolitical tension in both directions continues, with Israel’s advance into Rafah, the situation escalates, and the market’s risk aversion strengthens.

2. The direction of the interest rate reduction cycle remains unchanged. The US non farm payroll data in April fell short of expectations, while other economic data showed a weakening of US inflation expectations and the Federal Reserve’s biased stance, leading to a resurgence of interest rate reduction expectations in the market.

3. The net purchasing trend of central banks around the world remains unchanged, with the Bank of Korea announcing its purchase of gold in early May.

Short term precious metal prices may experience strong fluctuations

The previous game point was the contradiction between medium – and long-term trends and short-term super inflation. After a brief decline, the profit taking capital market weakened, and the market began to trade news of inflation and interest rate cuts with fluctuations. It is expected that precious metal prices may fluctuate strongly in the short term.