PBoC Extends Gold Buying to 9 Months While Imports Crash 62% in H1 2025

CME Group’s micro metals futures showed mixed performance in July amid tariff uncertainty and Fed policy concerns. Gold prices briefly surged above $3,450/oz after President Trump threatened to fire Fed Chair Powell, but ended July flat at just under $3,300/oz following a hawkish Fed meeting. Silver gained 1.5% to close at $36.710/oz, benefiting from initial tariff fears before bullion was exempted. Copper experienced extreme volatility, jumping 13% on July 8 after Trump announced potential 50% import tariffs, only to crash 14.3% by month-end to $4.3545/lb when copper cathodes were excluded. Trading volumes surged, with Micro Copper futures ADV up 89%

Stock markets initially rallied to record highs on Tuesday after July’s consumer inflation data came in slightly better than expected at 2.7% annually, matching June’s level. However, the celebration was short-lived as Thursday’s Producer Price Index shocked investors with a 0.9% monthly surge – the biggest jump since June 2022 and far above the 0.2% forecast. The dramatic wholesale inflation spike caused stocks to reverse course, with major indexes falling as traders scaled back expectations for multiple Fed rate cuts. The PPI surge suggests tariff-related costs are finally hitting the production pipeline, potentially foreshadowing higher consumer prices ahead and complicating

Japan’s economy grew stronger than expected in the second quarter, expanding 1.0% on an annualized basis versus forecasts of just 0.4%. This marks the fifth consecutive quarter of growth after previous data was revised from contraction to expansion. Export volumes held up surprisingly well despite new US tariffs, while capital spending rose 1.3% and private consumption edged up 0.2%. However, economists warn the positive data may be temporary, driven by last-minute demand from Asian tech manufacturers and automakers rushing shipments before tariffs took full effect, suggesting challenges ahead for the world’s fourth-largest economy.

US wholesale inflation surged unexpectedly in July, with the Producer Price Index jumping 0.9% – the biggest monthly increase in over three years. The sharp rise pushed annual wholesale inflation to 3.3%, well above the Fed’s 2% target. The surge was driven by both services (up 1.1%) and goods (up 0.7%), with fresh vegetables soaring 38.9% and widespread increases across sectors including machinery, hotels, and freight transport. This wholesale price spike raises concerns that consumer inflation will accelerate in coming months as businesses pass along higher costs from Trump’s tariffs, potentially complicating the Federal Reserve’s plans for a September rate

Physical gold demand in India showed modest improvement this week as prices retreated from recent record highs, encouraging some retail buyers to return to the market. Gold prices in India fell to 99,838 rupees ($1,139.61) per 10 grams on Thursday after hitting an all-time high of 102,250 rupees last week. The pullback prompted Indian dealers to offer smaller discounts of up to $6 per ounce compared to $9 last week. However, demand remained sluggish in other major Asian markets including China, Hong Kong, Singapore, and Japan, where activity was described as “lacklustre” despite the price correction.