Influenced by the Fed's interest rate hike and expectation of falling inflation, US bond real yields had turned positive at the beginning of the month and kept moving upwards, putting gold prices under pressure. Silver price fell more than gold this month due to its own industrial attributes and the impact of weaker demand at the same time. Inflation in the US is expected to continue to fall in the second half of the year under the influence of high cardinality, with real interest rates on US bonds moving further up as the Fed raises rates. If there is no further escalation of geopolitical conflicts, it is unlikely for the precious metal prices to reach new highs during the year, and the average price of gold will gradually move down.

In terms of industrial products, the weakening of the US dollar index formed a certain positive support for non-ferrous metal prices. However, the domestic demand side was suppressed in the short term, and the peak season was not prosperous, making the prices of basic metals weaker. With China’s domestic epidemic control apparently improving, the situation for non-ferrous metals is expected to improve in June when terminal demand is expected to be stronger. The current inventory levels of the major non-ferrous metals are overall at absolute lows for the last 10 years or so, and prices are more resilient and expected to enter a recovery phase. In the medium term, the impact of the Fed's interest rate hike on global aggregate demand will become more apparent, limiting the extent of the non-ferrous metal price rebound.

Ferrous metals are relatively unaffected by the US dollar index. Steel rebar demand in May still has not seen a significant recovery. Coking coal prices have seen four rounds of reductions. Iron ore prices were relatively stable due to continued improvement in its own fundamentals and greater sensitivity to dollar liquidity. The company is expected to see a significant reduction in the inventory of finished products, and the entire ferrous metal sector is expected to see a rise in the overall prices.

Soybean prices continued their upward trend this month, but the rate of increase gradually reduced. The USDA's May report is neutral overall, and the current U.S. soybean is still in a tight supply-demand balance. Although the new crop sowing area is expected to increase, there will be weather disturbance after entering the growing season, prices can still maintain a high level in short-term. Oil and grease inventory levels are still low.