Precious Metals Market Trends and Performance
- Retail investment activity remains quiet, with Dubai trading at a $100 (2%) discount to loco London and Shanghai premiums slipping toward neutral (p. 9).
- Silver demand in the solar cell market is expected to drop by 19% this year due to oversupply and substitution with copper paste (p. 9).
- Year-to-date asset performance shows the DXY up 3.1% while all listed precious metals declined, led by platinum (-25.4%) and palladium (-23.1%) (p. 38).
  - Gold prices in local currencies fell across the board, with the largest decline in US$ (-7.1%) and the smallest in Indonesian Rupiah (-0.6%) (p. 37).
- Gold's correlation with the VIX and MOVE indices remained negative, while its five-year correlation with the Misery Index turned positive (pp. 34-35).
Mining Production and Supply/Demand Balances
- Nornickel reported a year-over-year decline in first-half precious metals production, with platinum down 16% to 281,000 ounces and palladium down 14% to 1,199,000 ounces (p. 11).
  - The production drop was driven by restocking needs, though the company maintained its 2026 guidance and adjusted supply chains to counter self-sanctioning (p. 11).
- Gold's 2026 forecast projects a total supply of 5,230t and demand of 3,583t, leaving a balance of 1,647t (p. 44).
- Silver's 2027 forecast projects a total supply of 33,550t and demand of 29,376t (p. 45).
- Platinum is projected to have a physical surplus of 538k oz in 2027, while palladium is projected to face a physical deficit of 343k oz (pp. 46-47).
Investment Products and Vault Inventories
- CME Group launched 24/7 trading for its one-ounce gold futures contract on July 26, 2026, with initial volumes averaging 282,931 ounces daily in its first month (p. 10).
- Gold ETP holdings grew by 15t year-to-date to 4,044t, driven by Asia and Europe, while silver ETPs dropped by 2,408t to 24,413t (p. 39).
- LBMA vaulted inventories rose in June, with gold up 72t (358t YTD) and silver up 471t (264t YTD) (p. 42).
- Managed Money outright longs for gold and silver remained below their 12-month averages, while palladium net shorts reached their highest level since late August 2025 (p. 40).
Global Monetary Policy and Macroeconomic Forecasts
- The US FOMC is expected to keep interest rates on hold at its July 2026 meeting, while the ECB held rates steady due to volatile energy prices (pp. 14-15).
- The US GDP forecast for 2026 was raised to 2.1%, with private investment raised to 3.7% and the CPI forecast raised to 3.4% (p. 24).
- China's economic survey showed a recession probability drop to 15%, though forecasts for fixed asset investment, industrial production, and retail sales were revised downward (p. 25).
- European banks are becoming more selective with credit due to geopolitical and energy risks, though corporate credit demand remains resilient (p. 18).
Trade Tariffs and Regional Economic Policies
- The temporary 10% global Section 122 tariff expired on July 24, 2026, shifting focus to proposed Section 301 tariffs covering 60 economies (p. 16).
- China's State Council pledged to meet its 4.5% to 5.0% GDP growth target for 2026 by accelerating fiscal spending and infrastructure projects (p. 19).
- China released its 15th Five-Year Carbon Peaking Action Plan (2026–2030), targeting a 17% reduction in CO2 intensity and a 25% share for non-fossil energy by 2030 (p. 20).
  - The plan is expected to drive demand for copper for grids and EVs, and aluminium for solar panel frames (p. 20).
  - Binding renewable energy consumption rules for Chinese provinces and energy-intensive industries will take effect on August 1, 2026 (p. 21).

StoneX Precious Metals front desk deck 072926

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