The intriguing adventure of gold continues as it experiences a volatile journey on the international marketAfter a sudden drop in prices last Friday, the opening on Monday, April 15, witnessed a resurgence in the prices of gold and silver as well as notable increases in the prices of other non-ferrous metals like aluminum and nickelDespite the A-share market's sluggish performance in the precious metals and industrial metals sectors, trading activity remains surprisingly robust.

Following a period of significant price hikes, the precious metals market, alongside copper and aluminum prices, has become trapped in a fluctuating state of high pricingThis volatility is a clear indicator that market sentiments can amplify swiftly, especially given the lingering uncertainties surrounding the ongoing Middle Eastern conflicts

Many industry specialists maintain a cautiously optimistic outlook for the medium- to long-term pricing trends in both the precious and non-ferrous metals markets.

In the face of escalating geopolitical risks, gold saw a significant uptick at the market's openingOn April 15, the international spot gold opened with a slight correction before rallying, with prices once reaching over $2370 per ounce, although a retreat followedJust prior, gold prices had peaked at a historic high of $2431 per ounce on the previous FridaySilver mirrored this upward trend, initially surging nearly 1% before retreating but then quickly rebounding to surpass $28 per ounce.

Back in China, the main contract for gold opened at 570.42 yuan per gram on April 15. Notably, on April 12, domestic gold futures crossed 588 yuan per gram, setting a new record high and marking an impressive year-to-date gain of almost 20%. Current trading volumes for the Shanghai gold index are nearing 900,000 contracts daily

The main silver contract also saw a remarkable increase, with a kick-off rise of 1.33%, summing to over 23% for the year.

Contrasted with the fervency surrounding precious metal futures and spot markets, the A-share market saw the Tonghuashun precious metals concept stock open significantly lower on the same day, with prominent stocks like Zhongrun Resources hitting their down limitsFollowing this trend, shares in firms like Chifeng Gold, Sichuan Gold, and Shandong Gold also witnessed declinesSurprisingly, despite a vigorous rally from 1453.87 points on February 6 to a high of 2610 on April 12, which is an increase of nearly 80%, the slide was noticeable.

Currently, Chinese investors demonstrate heightened interest in gold, with substantial fund inflows into the gold market through ETFs, particularly the gold stocks ETF (159562) witnessing its fund shares rapidly surge from 39.13 million on April 1 to a remarkable 209 million on April 11, increasing over four times

Regardless of previous premiums exceeding 30%, this ETF saw a two-day adjustment, yet its price promptly escalated further, with recent average daily transaction values surpassing 160 million yuan.

This rise in gold's value coincided with the simultaneous increase in the US dollar index and US treasury yields, largely influenced by geopolitical risksAnalyst Zhou Hao from Guotai Junan noted the tumultuous journey of gold last Friday, detailing its fall from a peak of $2430 per ounce to a closing price of $2344 per ounceSuch market volatility inherently heightens emotions and uncertainties, particularly with the unclear trajectory of the Middle Eastern conflicts, which seem to extend the extraordinary adventure of gold.

Long-term perspectives have revealed ongoing risks associated with US sovereign debt, along with a continuous trend of de-globalization

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The volatility of geopolitical issues raises complexities in the global macro environmentAnalysts argue that the credibility of the dollar may face a sustained decline and that the global sovereign currency system may be undergoing a lengthy reconstructionA resurgence in gold's monetary attributes is anticipated as global diversification of reserve assets and a clamor for safety peak, thereby ensuring a gradual elevation of gold prices over time.

Moreover, not only gold and silver, but copper, aluminum, and various other non-ferrous metal prices have also surged dramatically on April 15. The LME (London Metal Exchange) reported a rise of over 9% in asian trading sessions for aluminum, marking its largest increase since at least 1987, while nickel surged more than 7% and copper rose nearly 2%.

In China’s futures market, on April 15, Shanghai aluminum opened with a climb of 3.3%, while copper surged nearly 1%. Earlier, on April 12, copper prices hit 77,940 yuan per ton, reaching levels unseen since May 2021. In view of these trading market dynamics, the Shanghai Futures Exchange has announced a trading limit for gold and copper futures starting April 12, 2024.

Similar to their precious metal counterparts, the industrial metal sector within China's A-share market also opened considerably lower on the same day; however, investor enthusiasm remained elevated

Specifically, the net capital infusion from northbound investments saw increases across 28 industries, with non-ferrous metals leading by a significant margin at a net investment amounting to 1.955 billion yuanNotably, on April 12, Tongling Nonferrous’s financing balance peaked at 1.797 billion yuan, reaching a near-year high.

The United States and the United Kingdom's imposition of sanctions on Russian metals over the weekend triggered additional price surges in non-ferrous metalsOn the evening of April 12, both the UK government and the US Treasury issued announcements specifying that, as of April 13, aluminum, copper, and nickel produced in Russia are banned from global metal exchanges and OTC derivatives markets, provided that existing stockpiles are exempt from these new regulationsUnder this directive, leading metal exchanges like LME and CME will not accept new production of aluminum, copper, and nickel from Russia post-April 13.

Notably, Russia holds a significant position in the global non-ferrous metals sector

An estimated copper production of around 1.02 million tons in 2023 contributes approximately 4% to global supply; aluminum production stands at around 3.8 million tons, also making up roughly 5%, while refined nickel production accounts for over 20% of the global market with an output of 154,000 tons.

It is critical to recognize that as of March 28, Russian-produced aluminum, copper, and nickel accounted for 91.14%, 62.13%, and 36.07% of LME registered inventory, respectivelyThe sanctions may severely limit the availability of new deliverable inventory on the LME.

A forecast report by a futures research entity in Guangzhou highlights that, in the short term, the impact of sanctions is poised to trigger a supply panic in the aluminum market, which is currently buoyed by strong upward momentum, with prices likely to climb further