Hua Yuan Securities: Gold price breaks through all-time high, driving comprehensive rebound in non-ferrous metals.

Huayuan Securities released a research report stating that the probability of a 50 basis point rate cut by the Federal Reserve in September has increased, coupled with the US fiscal deficit exceeding expectations, leading to a record high gold price. In August, the US fiscal deficit exceeded expectations, and inflation expectations rose. The logic of US monetary policy and fiscal policy resonated, leading to a record high gold price. In the short term for the copper sector, macroeconomic factors may dominate copper price fluctuations; in terms of fundamental factors, downstream copper production has rebounded, and inventory continues to decrease. In the medium to long term, the issue of mineral scarcity on the copper supply side has not been alleviated, and it will take a long time for capital spending to materialize into production output. Supply rigidity still exists, and it is expected that there is significant room for copper price to rise in the medium to long term. For the aluminum sector, the demand for downstream aluminum storage has increased before the holiday, leading to a rebound in aluminum prices. Precious metals sector: The probability of a 50 basis point rate cut by the Federal Reserve in September has increased, coupled with the US fiscal deficit exceeding expectations, leading to a record high gold price. London spot gold rose by 2.75%, and Shanghai Futures Exchange gold rose by 1.73%. London spot silver rose by 3.90%, and Shanghai Futures Exchange silver rose by 2.47%. Palladium rose by 11.10%, and platinum rose by 6.64%. This week, both the August CPI and PPI in the US were lower than expected, and in the context of continuing inflation decline and weak employment data, the market expects an increased probability of a 50 basis point rate cut by the Federal Reserve in September. According to Fedwatch, the probability of a 50 basis point rate cut by the Federal Reserve in September is 50% (up from 25% previously). On the other hand, in the September presidential debate, Harris performed better, leading to an increase in the probability of winning, and the US fiscal deficit exceeding expectations in August raised concerns about the rapid growth of the US fiscal deficit, leading to an increase in inflation expectations. The logic of US monetary and fiscal policy resonated, resulting in a record high gold price, reaching $2586 per ounce in London on Friday evening. In the short term, the market is starting to gradually price in a 50 basis point rate cut by the Federal Reserve in September and waiting for the realization of next week's FOMC rate decision. In the long term, Huayuan Securities believes that in the context of dual loosening of US monetary and fiscal policies, US dollar credit contraction, and the intensification of geopolitical events, gold is expected to be in an uptrend in the medium to long term. Recommendations to watch: Zijin Mining Group, Zhongjin Gold Corp.,Chifeng Jilong Gold Mining, Shandong Gold Mining, Shanjin International Gold, Zhuzhou Smelter Group, Hunan Silver. Copper sector: Macro factors dominate short-term fluctuations, downstream production rebound, inventory continues to decrease, and copper price rebounds. This week, London copper rose by 0.77% and Shanghai copper rose by 1.25%; London copper inventories fell by 1.91% and Shanghai copper inventories decreased by 13.86%. The smelting fee is $4.6 per ton; sulfuric acid prices fell by 4.80%, and the gross profit of copper smelting was -1224 yuan per ton, leading to an expanded loss. In terms of macroeconomic factors, there is an increased probability of a 50 basis point rate cut by the Federal Reserve in September, leading to a rebound in copper prices. In terms of fundamentals, this week the operating rate of electrolytic copper rods was 81.72%, an increase of 3.57% from the previous period. This week, Shanghai copper inventories were 185,500 tons, a decrease of 13.86%, London copper inventories were 311,500 tons, a decrease of 1.91%, and SMM social inventories were 216,900 tons, a decrease of 15.17%. In the short term, macro factors may dominate copper price fluctuations, the weakening of US inflation and employment data, the increased probability of a 50 basis point rate cut by the Federal Reserve in September, leading to a rebound in copper prices. In terms of fundamentals, downstream copper production has rebounded, and inventory continues to decrease. In the medium to long term, the issue of mineral scarcity on the supply side of copper has not been alleviated, and it will take a long time for capital spending to materialize into production output. Supply rigidity still exists, and it is expected that there is significant room for copper price to rise in the medium to long term. Recommendations to watch: Zijin Mining Group, CMOC Group Limited, Jchx Mining Management, Tongling Nonferrous Metals Group, as well as the undervalued Hbis Resources. Aluminum sector: The demand for downstream storage before the holiday has increased, aluminum inventories are decreasing, and aluminum prices are rebounding. Tight supply of raw materials combined with production line maintenance leads to strong operation of alumina prices. This week, London aluminum rose by 1.38% and Shanghai aluminum rose by 2.46%; in terms of inventory, London aluminum inventories fell by 1.51%, Shanghai aluminum inventories fell by 0.76%, and spot inventories fell by 5.80%; in terms of raw materials, this week alumina prices rose by 0.89%, anode prices remained stable, and aluminum enterprise gross profit rose by 25.52% to 2471 yuan per ton. This week, domestic aluminum spot inventory decreased significantly, mainly benefiting from the increase in downstream storage demand before the holiday, with transactions improving and aluminum prices rising. Regarding electrolytic aluminum, there is a tight supply of domestic ore, and there is an expectation of reduced supply of imported ore due to the impact of the rainy season in Guinea. In many northern areas, reduced production is occurring due to ore issues and equipment maintenance, leading to high alumina prices operations, and it is necessary to continue to monitor the demand for the resumption of electrolytic aluminum production in southwestern China and the pace of releasing newly invested alumina production capacity. Recommendations to watch: Aluminum Corporation Of China, Sunstone Development, Inner Mongolia Dian Tou Energy Corporation, Tianshan Aluminum Group, Yunnan Aluminium, Henan Shenhuo Coal & Power.3. SZ), Jiaozuo Wanfang Aluminum Manufacturing (000612.SZ).Minor metal prices: Cadmium rose by 0.44%, while molybdenum concentrates/titanium concentrates/tungsten concentrates/silicomanganese/vanadium pentoxide/manganese ore fell by 0.79%/1.34%/1.42%/1.72%/1.97%/2.38%. This week, minor metal prices generally declined. Recommended to pay attention to: antimony: Hunan Gold Corporation (002155.SZ), Guangxi Huaxi Nonferrous Metal (600301.SH), Tibet Huayu Mining (601020.SH); tungsten: China Tungsten and Hightech Materials (000657.SZ), Chongyi Zhangyuan Tungsten (002378.SZ), Xiamen Tungsten (600549.SH), Guangdong Xianglu Tungsten (002842.SZ); indium: Yunnan Tin Co., Ltd. (000960.SZ), Zhuzhou Smelter Group (600961.SH), Huludao Zinc Industry (000751.SZ); manganese: Western Region Gold (601069.SH). Risk warning: Risk of downstream production recovery falling short of expectations; Risk of sluggish domestic real estate demand; Risk of US economic recession; Risk of new energy vehicle growth falling short of expectations; Risk of overseas geopolitical risks.