Minmetals Futures: Geopolitical risks and macro policy uncertainties keep the precious metals market cautious

With geopolitical risk stacking on top of uncertainty along the macroeconomic policy path, the precious metals market has maintained a cautious sentiment. During the Qingming Festival holiday, tensions in the Middle East continued to escalate, and after Trump extended the final deadline to 8:00 p.m. Eastern Time on April 7, differences in negotiations between the two sides widened significantly. Trump recently issued another set of hardline remarks, further intensifying market concerns that oil prices will remain elevated and inflation will move upward. As for the U.S. economy’s underlying fundamentals, in March, the U.S. ISM Services PMI fell to 54, below both the prior reading and expectations; a sharp drop in the employment index highlights a slowdown in the labor market, but with the prices-paid index rising, inflation pressure is still building. Meanwhile, Federal Reserve officials Hammack and Goolsbee both said that current inflation risks are higher than employment pressures, suggesting a leaning toward keeping a tight monetary policy, which has put downward pressure on precious metals prices. (Wujiant Futures)