Institution: If the situation between the US and Iran gradually moves toward a peaceful conclusion, precious metal prices are expected to rebound sharply

　　Source: FINANCE NEWS

　　As of June 12, the closing price of COMEX gold was $4,239.90/oz, down 2.62% week-on-week, and the closing price of SHFE gold was 911.62 yuan/gram, down 6.41% week-on-week. The US May CPI rose 4.2% year-on-year, in line with market expectations and reaching the highest level in nearly three years. Energy prices were a core factor. In addition, the core CPI rose 2.9% year-on-year, matching market expectations; the US May PPI rose 6.5% year-on-year, marking the largest increase since November 2022 and exceeding market expectations of 6.4%. Excluding food and energy, the core PPI rose 4.9% year-on-year, lower than the market expectation of 5.4%. Overall, US energy prices rose sharply by 10.7% year-on-year in May, becoming the core driver of the overall PPI's higher-than-expected growth. At the beginning of last week, when the US and Iran returned to mutual strikes, the market fully priced in rate hike trades, and precious metal prices dropped sharply, hitting new lows for the year.

　　With both the US and Iran reportedly close to signing a memorandum of understanding last Friday, the market's previous expectation of aggressive rate hikes by the Federal Reserve has somewhat retreated, leading to a rebound in precious metal prices. Dongwu Securities believes the current core headwinds for gold include: 1. Some oil purchasing countries choose to sell part of their gold to stabilize their national currency; 2. Rising energy prices boost long-term rate hike expectations. If the US-Iran situation gradually reaches a peaceful conclusion, precious metal prices are expected to rebound sharply.

Editor: Zhu Henan