Platinum and palladium fell while Shanghai silver surged! Did precious metals stage a 'roller-coaster' rally?

3. Options: Sell out-of-the-money put options. (Guo Chao, Investment Consultant Qualification No.: Z0022905; the above views are for reference only and should not serve as entry criteria.) Gold and Silver: Market sentiment shocks combined with technical adjustments triggered a 'roller-coaster' price action in gold and silver. 【Market Recap】 1. Gold & Silver Markets: Yesterday, London gold briefly breached USD 5,100/oz during Asian trading, then declined sharply in U.S. session—slipping below the USD 5,000 threshold—before closing up 0.45% at USD 5,009.90/oz. London silver spiked to USD 117/oz intraday—a surge of nearly 14%—but subsequently plunged from its highs, erasing all gains and turning negative; it ultimately closed up 0.52% at USD 103.874/oz. Driven by overseas markets, SHFE gold futures rose 1.49% to RMB 1,148.14/gram, while SHFE silver futures surged 9.93% to RMB 29,005/kilogram. 2. U.S. Dollar Index: The index gapped lower at open and briefly dipped below 97, closing down 0.57% at 97.04. 3. U.S. Treasury Yields: The 10-year Treasury yield continued retreating from recent highs, settling at 4.2128%. 4. USD/CNY Exchange Rate: The RMB appreciated against the U.S. dollar, closing at 6.954—a gain of 0.13%. 【Key News】 1. U.S. Government: (i) Trump stated that South Korea’s National Assembly has yet to ratify the bilateral trade agreement, prompting an increase in the U.S. reciprocal tariff rate on South Korean goods from 15% to 25%. (ii) Prediction platforms estimate an ~80% probability of a U.S. government shutdown before end-January. 2. Geopolitics: U.S. media reported Trump believes Iran seeks a deal. 3. Central Bank Developments: Kitila Mkumbo, Tanzanian State Minister for Planning and Investment at the President’s Office, announced Monday that Tanzania expects to sign the USD 42-billion LNG project by June and anticipates first production within eight years. Mkumbo added that the President has instructed the central bank to sell part of its gold reserves: “We need funds. Numerous infrastructure projects are underway—and all require financing—so we’ve directed relevant authorities to liquidate some assets to raise capital for these initiatives.” 4. Fed Watch: Probability of a 25-basis-point Fed rate cut in January stands at 2.8%, with a 97.2% chance of holding rates steady. By March, cumulative odds of a 25-bp cut reach 15.5%, while odds of no change stand at 84.1%; cumulative odds of a 50-bp cut are just 0.4%. 【Logic Analysis】 Last night, gold and silver markets delivered a textbook 'roller-coaster' performance—with silver exhibiting especially violent swings. Intraday gains were primarily driven by heightened geopolitical tensions stoking safe-haven demand. However, around 2:00 a.m., news broke that Tanzania’s central bank plans to sell part of its gold reserves to finance infrastructure development—immediately weighing on gold prices. Silver followed suit due to its strong correlation with gold. Moreover, silver had already posted massive gains earlier in the day—and accumulated substantial short-term speculative positions—making its correction significantly sharper than gold’s. Looking ahead, gold is expected to remain relatively resilient amid long-term macro trends of 'de-trustification' and global order restructuring. Silver, however, has re-entered a sensitive 'high-price, high-volatility' phase—requiring extreme caution in trading. Priority must be placed on profit protection and risk control.

Re-evaluation of the USD 42-billion LNG project: Can Tanzania absorb this investment—worth several times its GDP?

Put simply, natural gas–fired power generation costs are just one-third those of diesel. That’s the crux: the government’s 2030 target of 8,000 MW installed capacity is fundamentally about supplying low-cost energy to fertilizer plants and cement factories (e.g., Dangote Cement—the African counterpart to China’s Conch Cement). For Chinese manufacturing firms operating in Tanzania, this signals a structural decline in the long-standing 'electricity shortage' and exorbitant energy expenses. Compared to China’s mature natural gas industrial scale, Tanzania remains a 'greenfield' infrastructure market—its pipeline network still underdeveloped. This technological and infrastructural gap precisely creates premium pricing opportunities for Chinese equipment suppliers. Rule-making in Practice: From the 'Negotiation Table' to the 'Construction Site' Although Equinor has recently conducted intensive site visits, this mega-project has yet to receive Final Investment Decision (FID). In 2024, the Tanzanian government unilaterally demanded revisions to the Host Government Agreement (HGA)—a 'start-from-scratch' approach that has left international oil companies wary. In essence, everyone wants a slice of this pie—but no one wants to be 'scalped' repeatedly via escalating taxes over the next 30 years. Tanzania’s demands—including a 3% domestic supply obligation at below-market pricing and mandatory local content procurement—appear to inflate upfront investment costs. Yet they also serve as filters to identify truly capable, long-term partners. With competing LNG projects in Mozambique and Senegal nearing commissioning, Tanzania’s 'late-mover disadvantage' is pressuring President Hassan’s administration to accelerate negotiations. Latest signals indicate mid-2026 as the definitive deadline for agreement signing. Once finalized, Mtwara Port will instantly transform from a quiet fishing harbor into East Africa’s busiest industrial hub. Tanzania LNG Project: Key Metrics & Timeline Key Metric Data Details Commercial Impact / Assessment Total Project Investment Approx. USD 42 billion Size exceeds Tanzania’s GDP several-fold—will spur massive demand for supporting infrastructure Proven Gas Reserves ~57 trillion cubic feet Potential long-term supply source for Asian and European markets Energy Target (2030) 8,000 MW installed capacity Industrial electricity costs projected to fall by >60% Export Allocation ~60% of reserves earmarked for export Tanzania poised to become a foreign-exchange–earning energy exporter Expected Signing Date Mid-2026 2026

Tanzania Close to Finalising $42 Billion LNG Deal, Finance Minister Says

17 hours ago

Tanzania nears finalizing a $42 billion LNG deal led by Equinor and Shell to unlock gas reserves for industrialization. The project aims to establish East Africa as an energy hub while attracting critical mineral investments.

reuters

2026-08-25

Iran War Makes Tanzania LNG Project More Attractive, Equinor Says

2026-10-13

Tanzania Close to Finalising $42 Billion LNG Deal, Finance Minister Says

Tanzania Close to Finalising $42 Billion LNG Deal, Finance Minister Says

FAQ