Following a period of consecutive declines, the precious metals sector has accelerated its rebound in recent days. On June 15th, the main contracts for Shanghai silver and Shanghai gold on the domestic futures market surged by 7.7% and 4.22%, respectively.

In international markets, the spot price of London gold began to recover after hitting a year-to-date low of $4023.1 per ounce on June 11th, and as of this report, it has climbed back above $4300 per ounce. The spot price of London silver has also rebounded above the $70 per ounce mark.

Key Factors Driving the Rebound

"While US-Iran negotiations have made key progress, significant differences remain, and uncertainty is still high. Former President Trump's announcement on social media to cancel a planned further military strike that evening released a signal of de-escalation, serving as the immediate catalyst for the sharp rebound in gold prices that day. However, Iran's foreign ministry expressed caution, denying that all parties had reached conclusions on core issues, indicating that the finalization of any agreement still carries considerable uncertainty and implementation risks," analyzed Zhan Dapeng, a precious metals analyst at Everbright Futures. On the macroeconomic front, US CPI for May rose 4.2% year-on-year, meeting expectations but marking the highest level since April 2023 and showing a significant increase from April's 3.8%. Core CPI also met expectations at 2.9% year-on-year. May PPI rose 6.5% year-on-year, exceeding the 6.4% forecast, with a month-on-month increase of 0.7%. Core PPI was 5.4% year-on-year, indicating persistent inflationary pressures from the production side.

Additionally, the preliminary University of Michigan Consumer Sentiment Index for June recovered to 48.9 from May's record low of 44.8, surpassing the market expectation of 46. However, one-year inflation expectations remain high at 4.6%, and households remain pessimistic about the economic outlook. Regarding global central banks, the European Central Bank announced a 25-basis-point interest rate hike on June 11th, forming a synchronized global tightening stance among major central banks to combat inflation.

Focus Shifts to the Federal Reserve

He believes that the core pricing focus for the precious metals market this week will shift entirely to the Federal Reserve's June FOMC decision—the debut of new Chair Warsh. The interest rate decision and quarterly economic projections will be released at 2:00 AM Beijing time on June 18th. The market consensus expects rates to remain unchanged at 3.50%–3.75%, but adjustments to the dot plot and the new Chair's commentary will be the true directional anchors. It is highly likely that the dot plot will shift towards signaling stable rates or even show a majority of officials expecting rate hikes. If the phrasing indicating a "bias towards the next move being a cut" is removed from the policy statement, it would mark a shift in the Fed's policy stance from the easing cycle that began in 2024.

Currently, the CME market has fully priced in no action for June, but the probability of rate cuts in July and September has been compressed to extremely low levels. For the gold market, it is in a phase where "rate hike expectations have begun to be priced in, but whether they are fully priced in remains unclear," leading to inevitable volatility. Therefore, at this critical juncture, it is advisable to wait for the "negative" event to pass, monitoring for potential "buy the rumor, sell the fact" reversals around the FOMC announcement, while also observing gold's support level around $4000 per ounce. Silver, platinum, and palladium continue to largely follow gold's movements. Recent trends show significant support in their bottoming areas after substantial declines, but it is important to note that gold's future performance will ultimately dictate the direction for these metals.

Market Outlook and Analyst Views

Changjiang Futures noted that concerns persist regarding the US fiscal situation and the Federal Reserve's independence, while central bank gold purchases and de-dollarization trends remain unchanged. Driven by industrial demand, physical silver supply remains tight, supporting a higher medium-term price center for both gold and silver. Platinum and palladium supply is relatively inelastic. Overall, the precious metals sector remains in a short-term adjustment phase. Market participants are advised to closely monitor the Federal Reserve's June policy decision and Chair Warsh's remarks.