In April, the US–Israel–Iran conflict remained a key driver of global markets. After an initial ceasefire and inconclusive talks in Pakistan, the US imposed a comprehensive blockade of the Strait of Hormuz, forcing Iran back to negotiations while largely halting strikes on its territory and significantly reducing conflict intensity. With the Strait constrained, oil prices stayed high, and inflation expectations pushed the US 10‑year yield close to 4.5%, weighing on precious metals and confining gold to a 4,500–4,800 trading range.
The Federal Reserve kept rates unchanged at its April meeting, with more officials favoring a more neutral stance and viewing both rate cuts and a shift back to hikes as plausible. The current pause may last some time, contingent on Middle East developments and the policy direction under incoming Chair Warsh. We remain constructive on the long‑term outlook for gold and copper, while selectively adjusting weights within strategic metals.
A parallel theme was the AI‑driven rally across chips, memory, power, transmission, and the broader supply chain, with particularly strong performance in Japan, Korea, and Taiwan, and selective strength in related names in Hong Kong and A‑shares. AI‑linked IPOs were especially robust, and Korea’s equity market overtaking Canada to become the world’s seventh‑largest signaled a clear shift of capital toward AI‑related sectors versus traditional mining.
Domestically, the Politburo meeting signaled a “steady progress, structural optimization, confidence stabilization” stance. It acknowledged a solid start to the year but highlighted weaker external demand, softer domestic demand, and lingering risks, so policy remains more targeted and effective. Fiscal policy focuses on improving the spending mix and accelerating the early rollout of major projects such as water grids, power grids, and computing infrastructure, while monetary policy stays moderately accommodative with ample liquidity and room for further easing if needed.