Last week, Federal Reserve Chair Powell sent “dovish” signals in his remarks, stating that the current inflation outlook is manageable and that interest rate hikes are unnecessary at this stage. Subsequently, pessimistic expectations in the interest rate market began to reverse, and industrial metal prices continued to rebound. Regarding precious metals, as nominal interest rate expectations stabilize, rising inflation helps lower real interest rates, and the long-term cracks in the “petrodollar” system have weakened the credibility of the U.S. dollar, opening up upside potential for gold.

Gold: As pessimistic expectations in the interest rate market have reversed, precious metal prices have continued to rebound. As of April 3, COMEX gold closed at $1,702.70 per ounce, up 7.44% week-on-week, while SHFE gold closed at RMB 1,033.00 per gram, up 3.44% week-on-week. U.S. nonfarm payrolls for March came in at 178,000, exceeding the expected 65,000, while the unemployment rate fell to 4.3% in March, lower than the expected 4.4%. We believe this reversal in nonfarm payrolls primarily reflects a correction for the impact of strikes and weather-related factors that dragged down hiring in February, rather than a signal of rapid momentum in the labor market in the short term. Following the previous spike in oil prices, market expectations of a 25-basis-point rate hike this year had fully weighed on precious metal valuations. However, this week, Federal Reserve Chair Powell sent a “dovish” signal in his remarks, stating that the current inflation outlook is manageable and that a rate hike is unnecessary at this stage. Subsequently, pessimistic expectations in the interest rate market began to reverse, and precious metal prices continued to rebound. As mentioned in our previous report, during short-term spikes in oil prices, the market tends to prioritize trading changes in nominal interest rates. Combined with the fact that gold holdings and the GVZ were already at high levels, the resulting liquidity squeeze amplified the price weakness; However, as nominal interest rate expectations stabilize, rising inflation will push down real interest rates. Furthermore, Iran’s proposal to settle Strait of Hormuz transit fees in RMB has also undermined the “petrodollar” logic, further opening up long-term upside potential for gold.

Copper: The interest rate market has corrected its previous pessimistic expectations, and ongoing domestic inventory drawdowns have supported copper prices in bottoming out and rising. As of April 3, LME copper closed at $12,360 per ton, up 1.98% week-on-week; SHFE copper closed at RMB96,250 per ton, up 0.33% week-on-week. On the supply side, as of April 3, the TC for imported copper ore fell further to -$66/ton this week. The worsening shortage of domestic ore sources provided bottom support for ore prices. On the demand side, while cable orders from State Grid and China Southern Power Grid are gradually being released, consumption from the real estate market, home appliances, and new energy vehicles remains limited. Following “dovish remarks” from Federal Reserve Chair Powell this week, previously overly pessimistic interest rate market expectations have been revised. Combined with ongoing domestic inventory drawdowns, copper prices have halted their decline and rebounded. We believe that in the short term, copper prices are supported at the bottom by the continued decline in copper concentrate TCs, smelter production cuts, and ongoing domestic inventory drawdowns. However, high overseas inventories and expectations of U.S. ground operations in Iran are exerting upward pressure on copper prices. We expect copper prices to remain volatile in the short term. As an integrated internet platform providing benchmark prices,on April 9, the benchmark price for copper, as reported by SunSirs, stood at 97,785.00 yuan per ton—an increase of 2.21% compared to the beginning of the month (95,666.67 yuan per ton).

Aluminum: Global primary aluminum supply growth turned negative in 2026, amplifying upside risks for aluminum prices. As of April 3, LME aluminum closed at $3,470 per ton this week, up 6.61% week-on-week; SHFE aluminum closed at RMB24,660 per ton, up 3.03% week-on-week. On the supply side, Inner Mongolia continues to bring new capacity online, bringing China’s theoretical operating capacity for primary aluminum to 44.385 million metric tons, an increase of 40,000 metric tons from the previous week. On the demand side, capacity utilization rates for aluminum sheet, strip, and foil producers rose by 0.42 percentage points week-on-week, while those for aluminum rod producers increased by 0.88 percentage points. As a result, theoretical demand for primary aluminum saw a slight increase this week. Social inventories of primary aluminum rose 2.93% week-on-week to 1.3684 million metric tons. As aluminum prices surged significantly this week, trading activity for aluminum ingots gradually weakened. Following Iran’s further attacks on energy and primary aluminum facilities in the Middle East, EGA announced the complete shutdown of its 1.5-million-metric-ton-per-year primary aluminum plant in Abu Dhabi, with a restart period expected to exceed one year. Additionally, the Revolutionary Guards announced further attacks on the remaining infrastructure of Bahrain Aluminum. We estimate that currently, over 2.5 million metric tons of production capacity in the Middle East has been shut down, and global supply growth has officially turned negative. As overseas supply risks continue to escalate, the upside risk for aluminum prices is intensifying.

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