Report Industry Investment Rating No relevant content provided. Core Viewpoints - The capital market continues to advance, with risk appetite being optimistic and exuberant. Interest rate cut trading dominates the market, most risk assets close higher, and the VIX volatility index falls to a historical low [5]. - Overseas, the resilience of inflation and the weakening of employment data strengthen investors' expectations of an interest rate cut. A rate cut in September is almost certain, and the market is divided on whether it will be 25 or 50 basis points, as well as the subsequent magnitude and speed of rate cuts [5]. - In China, export data begins to weaken, inflation indicators show a more severe decline, and the "anti - involution" market continues [5]. - The domestic bond market mostly declines with a near - strong and far - weak pattern, the stock index generally rises, and the commodity sectors show mixed performance with most closing lower [6]. - Amid the dominance of interest rate cut trading, the loosening of liquidity supports the macro - level of the capital market. Risk assets perform well, and gold, as a safe - haven asset, makes a comeback. There are rotations in strength among different commodity sectors [7]. - Although the economic data in China is weak, the expectations are not bad. Liquidity loosening becomes a hotbed for risk assets, and RMB assets are attracting funds [7]. - The US stock market at a historical high will face the test of the September interest rate cut, and the risk of shifting from interest rate cut trading to recession trading is worth alerting [7]. Summary by Directory 1. Big - Category Assets - In the global market, major stock markets mostly close higher, the BDI index rises significantly, US Treasury yields and the US dollar index decline together, non - US currencies generally benefit, and commodity trends are divergent, with the CRB index rising weekly [5]. - In China, the export data weakens, inflation indicators decline, the bond market mostly declines with a near - strong and far - weak pattern, the stock index generally rises, and the commodity sectors show mixed performance with the Wind commodity index having a weekly change of 2.3%. Among the 10 commodity sector indices, 3 close higher and 7 close lower [5][6]. 2. Sector Express - The domestic bond market mostly declines with a near - strong and far - weak pattern, the stock index generally rises, and the commodity sectors show mixed performance with most closing lower. The growth - style stocks are more dominant, and the market risk appetite increases [14]. - The domestic commodity sectors show an internal - weak and external - strong style. Precious metals and non - ferrous metals rise together, driving the overall commodity market to close higher. The coal - coking - steel - ore sector closes slightly higher, while the chemical sector leads the decline with a fall of - 2.71%, followed by the oilseeds and grains sectors with a decline of over - 1% [6][14]. 3. Fund Flows - Last week, the commodity futures market saw a small overall inflow of funds. The energy, precious metals, and agricultural and sideline products sectors had obvious inflows, while the grains, non - ferrous metals, and chemical sectors had significant outflows [16]. 4. Variety Performance - In the past week, most domestic major commodity futures closed lower. The top - rising commodity futures varieties were Shanghai gold, Shanghai silver, and Shanghai aluminum, while the top - falling varieties were rubber, lithium carbonate, and low - sulfur fuel oil [21]. 5. Volatility Characteristics - Last week, the volatility of the international CRB commodity index dropped significantly, the volatility of the domestic Wind commodity index slightly decreased, and the Nanhua commodity index dropped significantly. Most commodity futures sectors saw a decline in volatility, with the energy, oilseeds, and agricultural and sideline products sectors having a large decline in volatility, while the non - ferrous metals, soft commodities, and grains sectors had a significant increase [25]. 6. Data Tracking - Internationally, most major commodities close higher, the BDI soars, copper and oil prices rise, soybeans close lower, gold and silver rise significantly together, the gold - silver ratio fluctuates under pressure, and the gold - oil ratio rises sharply [27]. - Domestically, the asphalt production rate rebounds rapidly, real estate sales continue to decline, freight rates continue to fall, and short - term capital interest rates fluctuate at a low level [42]. 7. Macro Logic - The stock index regains its upward momentum and closes significantly higher, the valuation fluctuates upwards, and the risk premium ERP falls under pressure [31][35]. - The commodity price index fluctuates upwards, inflation expectations decline, and there is a divergence between expectations and reality [36]. - The US Treasury yield shows a divergent pattern with a near - strong and far - weak trend, the term structure flattens, the term spread narrows, the real interest rate drops sharply, and the gold price rises strongly to a new high [45]. - The US high - frequency "recession indicator" weakens, the impact of tariffs on the economy becomes more obvious, and the 10Y - 3M Treasury yield spread turns negative again [49]. 8. Fed Interest Rate Cut Expectations - The Fed is expected to start an interest rate cut in September, and may continue to cut rates in October or December. There is a high probability of a 75 - basis - point rate cut within the year [53]. 9. US Economic Data - US employment data falls short of expectations, and the labor market begins to weaken. In August, the number of new non - farm jobs was 22,000, and the unemployment rate was 4.3%, rising for the second consecutive month [57][58]. - US CPI data rebounds further, generally in line with market expectations. In August, the CPI rose 2.9% year - on - year and 0.4% month - on - month, and the core CPI rose 3.1% year - on - year and 0.3% month - on - month [63][64]. 10. China's August Macroeconomic Data - Industrial added value in August increased by 5.2% year - on - year and 0.37% month - on - month. From January to August, it increased by 6.2% year - on - year [70]. - The average urban survey unemployment rate from January to August was 5.2%. In August, it was 5.3%, up 0.1 percentage point from the previous month [71]. - In August, the CPI decreased by 0.4% year - on - year and remained flat month - on - month, and the PPI decreased by 2.9% year - on - year with the decline narrowing [72]. - In August, total retail sales of consumer goods were 3,966.8 billion yuan, a year - on - year increase of 3.4%. From January to August, the total was 32,390.6 billion yuan, a year - on - year increase of 4.6% [81]. - From January to August, national fixed - asset investment (excluding rural households) was 32,611.1 billion yuan, a year - on - year increase of 0.5%. Real estate development investment decreased by 12.9% [82]. - In August, the total value of goods imports and exports was 3,874.4 billion yuan, a year - on - year increase of 3.5%. From January to August, the total was 29,569.6 billion yuan, a year - on - year increase of 3.5% [83]. 11. This Week's Focus - Monday (September 15): China releases a series of August economic data, and the US releases the September New York Fed Manufacturing Index. - Tuesday (September 16): The eurozone releases the September ZEW Economic Sentiment Index, and the US releases August retail sales data. - Wednesday (September 17): The US releases August new housing starts and building permit totals, and the Bank of Canada announces its interest rate decision. - Thursday (September 18): The Fed FOMC announces its interest rate decision and economic outlook summary, Fed Chairman Powell holds a monetary policy press conference, the Central Bank of Brazil announces its interest rate decision, the Bank of England announces its interest rate decision, and Meta holds the Connect conference. - Friday (September 19): The Bank of Japan announces its interest rate decision [93].

Investment Rating - The industry investment rating is "Outperform the Market" and is maintained [2] Core Views - The report emphasizes the strong performance of precious metals, particularly gold, which has reached a historical high. The expectation is for a shift from recession trading to stagflation trading, suggesting a potential slow bull market for gold [5] - Copper prices are expected to rise if interest rate cuts lead to a soft landing for the economy. The current market sentiment is pricing in stagflation or soft landing scenarios, with domestic consumption expected to increase as the peak season approaches [6] - Aluminum prices are also projected to rise due to increased downstream operating rates during the traditional peak season, despite ongoing challenges in the real estate sector [6] - Cobalt prices are on the rise, driven by strong demand and supply constraints, particularly with upcoming policy changes in the Democratic Republic of Congo [7] - Tin prices have increased due to supply shortages, with production rates in key provinces remaining low [7] - Lithium prices are under pressure due to the announcement of a resumption plan for a key mining area, although long-term demand remains strong [8] Summary by Sections Industry Overview - The closing index for the industry is at 6795.38, with a weekly high of 6795.38 and a low of 3725.17 [2] Price Movements - Basic metals saw price increases: Copper up 1.49%, Aluminum up 2.80%, Zinc up 3.10%, Lead up 2.07%, and Tin up 2.70%. Precious metals also saw gains, with Gold up 0.46% and Silver up 3.20% [22] Inventory Levels - Global visible inventory changes: Copper increased by 7945 tons, Zinc increased by 2724 tons, while Lead decreased by 4085 tons [30]

Core Viewpoint - The likelihood of a rate cut cycle restarting in September is high following the release of the US August CPI and employment data, with a total of 100 basis points cut since the cycle began in September 2024, and the Federal Reserve has paused rate cuts four times since March this year [1][2]. Market Performance Post Rate Cut - After the restart of the rate cut cycle, the Hong Kong stock market is expected to perform strongly, similar to the US stock market. In non-recession scenarios (1995, 2020, 1998), indices tend to rise, while in recession scenarios (2002, 2008), there may be a further decline for about three months before a recovery [1][4]. - Over the 12 months following a rate cut restart, the best-performing sectors are healthcare (+106.7%), technology (+88.0%), consumer staples (+55.2%), and consumer discretionary (+52.6%). The worst-performing sectors are utilities (+2.3%) and telecommunications (+13.3%) [1][4]. Asset Class Performance - In the 12 months following a rate cut restart, equity markets show significant performance. In non-recession scenarios, the S&P 500 averages a gain of 22.5%, while the Hang Seng Index averages a gain of 35.4%. Commodities like oil and copper also see substantial increases, reflecting pricing in of economic recovery [5][6]. Sector Performance in US Markets - In the US market, the sectors that perform best in the 12 months following a rate cut restart are technology (+47.8%), industrials (+22.9%), consumer discretionary (+22.0%), and materials (+20.2%). In non-recession scenarios, technology's average gain reaches +60.2%. The sectors that perform poorly include utilities (-0.5%), real estate (+3.7%), consumer staples (+5.4%), and telecommunications (+8.6%) [9][11]. Index Style Performance - In the US market, small-cap indices (Russell 2000) tend to outperform large-cap indices (Russell 1000) and the Nasdaq outperforms the Dow Jones Industrial Average, indicating a shift towards smaller-cap stocks following the restart of the rate cut cycle [13][15]. Hong Kong Market Performance - The Hong Kong market is expected to show stronger performance post rate cut restart, with healthcare, technology, consumer staples, and consumer discretionary sectors leading the gains, while utilities and telecommunications lag behind [1][4][19].

Investment Rating - The report maintains a "Positive" investment rating for the industry [9] Core Insights - The report emphasizes the recovery of the silver-gold ratio and the simultaneous rise in copper and aluminum prices due to both domestic and international factors [5][6] - Weak employment data in the U.S. has led to increased expectations for a 50 basis point rate cut in September, which is expected to boost precious metals [5][6] - The report suggests that while gold remains a focus for investment, the recovery of the silver-gold ratio indicates potential for silver as well [5][6] Summary by Sections Precious Metals - The report highlights the weak performance of the U.S. labor market and its implications for precious metals, particularly gold and silver [5][6] - It suggests that gold stocks may experience a quarterly-level resonance in terms of price, valuation, and style due to anticipated rate cuts [5][6] - For silver, the report advises attention to its potential to converge with gold as inflation expectations rise [5][6] Industrial Metals - Industrial metals have seen a broad increase, with LME copper rising by 1.7% and aluminum by 3.8% [6][27] - The report notes that domestic policies aimed at stabilizing growth are expected to enhance demand outlook [6] - It indicates that while demand for copper and aluminum may decline in the second half of the year, supply constraints will limit the extent of this decline [6] Strategic and Minor Metals - The report discusses the strategic reassessment of rare earths and tungsten, with a focus on their long-term value due to government policies and market dynamics [7] - It highlights the upward price trend for cobalt and nickel, driven by supply constraints and increasing demand in the battery sector [7] - The report also mentions the bottoming out of lithium prices, with a cautious outlook on future price movements [7]

Group 1: Deep Dive on "14th Five-Year Plan" - The article discusses the ongoing signals from the central government regarding industrial structure adjustments, emphasizing the path taken in the previous five-year plan and how the "14th Five-Year Plan" will advance these adjustments [8]. Group 2: Hot Topics - The U.S. non-farm payroll data for August showed a cooling trend, leading the market to shift from "rate cut trades" to "recession trades," raising questions about the extent of potential rate cuts by the Federal Reserve [12]. - A mini-storm in sovereign debt markets has emerged due to a significant rise in overseas risk-free interest rates, prompting a risk-off sentiment in global financial markets [11][12]. - The article highlights that the decline in exports in August is not due to a "export rush" tapering off, but rather other underlying factors [16]. Group 3: High-Frequency Tracking - The analysis of the August CPI indicates that core CPI structure shows two main characteristics: limited transmission of tariffs on goods inflation and a weakening in super-core service inflation [21]. - The commentary on the recent U.S. employment data indicates a weakening trend, which has contributed to the continued rise in gold and silver prices [23].

Core Viewpoint - The article emphasizes that the pricing logic of gold fundamentally returns to one point: demand, highlighting the complexity of gold's pricing framework due to its diverse demand composition across different economic cycles [5][6]. Group 1: Gold Price Trends - Since late April, the gold price has broken a prolonged stagnation, with spot gold reaching a historical high of $3,674.78 on September 9, marking an increase of over $1,000 per ounce and a year-to-date rise of 40% [3][5]. - The surge in gold prices since 2022 is attributed to geopolitical factors, particularly the Russia-Ukraine conflict, which initiated a unique central bank gold purchasing trend [5][6]. Group 2: Future Gold Demand - The trend of central banks purchasing gold is expected to continue into 2023 and 2024, with emerging market investors from countries like China and India contributing significantly to physical gold demand [5][6]. - The marginal pricing of gold in 2024 will be influenced by factors such as deflation in China and the reshaping of Asian supply chains, which will have economic spillover effects [5][6]. Group 3: Investment Strategy and Risk-Return Profile - Gold's unique risk-return characteristics allow it to optimize the risk-adjusted returns of investment portfolios, making it a strategic asset in various macroeconomic scenarios [17][20]. - A quantitative framework is proposed to determine the optimal allocation of gold in multi-asset portfolios, with a suggested minimum allocation of 6% and a maximum of 7.7% to maintain a balance between risk and return [22][23]. Group 4: Economic and Financial Factors - Gold's long-term price dynamics are influenced by both economic factors (like GDP growth) and financial factors (global investment portfolios), reflecting its dual nature as both a consumption and investment asset [19][20]. - Historical data shows that gold has a lower correlation with major asset classes, which aids in diversifying investment portfolio risks [20][21]. Group 5: Geopolitical and Market Dynamics - Recent geopolitical tensions, such as the Israel-Iran conflict, have not significantly impacted gold prices, indicating that gold's pricing is not solely driven by geopolitical events [27][28]. - The article suggests that the market's focus may shift towards "recession trades" and liquidity easing as key drivers for gold prices in the latter half of the year [29].

Group 1: Report Overview - The report is the Non - ferrous Metals Daily Report on September 11, 2025, from Wukuang Futures [1] Group 2: Copper - **Market Performance**: LME copper rose 0.96% to $10012/ton, and SHFE copper main contract closed at 80190 yuan/ton. The US PPI data was weaker than expected, and the US bond yield declined, leading to the rise of copper prices [2] - **Industry Situation**: LME copper inventory decreased by 225 to 155050 tons, with a cancellation warrant ratio of 14.0% and a Cash/3M discount of $56/ton. In China, SHFE copper warehouse receipts slightly increased to 19,000 tons. The spot premium in Shanghai decreased, while the inventory in Guangdong decreased and the procurement volume increased. The import of SHFE copper was slightly in the red, and the Yangshan copper premium increased. The refined - scrap copper price difference was 1620 yuan/ton, and the supply - demand of recycled copper was affected by policy adjustments [2] - **Price Outlook**: The market is hesitating between recession and interest - rate cut trading. If recession trading comes first, the attitude at the actual interest - rate meeting is expected to be dovish. Overseas copper mine supply is disturbed, and domestic copper production declines marginally. Although current consumption is weak, copper prices are expected to remain strong. The operating range of SHFE copper main contract is 79500 - 80800 yuan/ton, and that of LME copper 3M is 9900 - 10100 dollars/ton [2] Group 3: Aluminum - **Market Performance**: Aluminum prices fluctuated. LME aluminum fell 0.21% to $2622/ton, and SHFE aluminum main contract closed at 20830 yuan/ton. The position of SHFE aluminum weighted contract increased by 0.7 to 542,000 lots, and the futures warehouse receipts slightly increased to 65,000 tons [4] - **Industry Situation**: Domestic three - place aluminum ingot inventory decreased by 0.2 to 473,000 tons, and the aluminum bar inventory in Foshan and Wuxi decreased by 0.2 to 85,500 tons. The aluminum bar processing fee rebounded, but the market trading was average. The spot in East China was at a discount of 30 yuan/ton to the futures, and the discount widened. LME aluminum inventory remained unchanged, and the cancellation warrant ratio was 22.7%, with a Cash/3M premium of $2.92/ton [4] - **Price Outlook**: Aluminum prices are in a game between macro - expectations and fundamental realities. Overseas interest - rate cut expectations and the resilience of aluminum product exports provide support, but the weak improvement in domestic terminal demand restricts the upside. The key is to focus on the fulfillment of peak - season demand and inventory trends. If inventory turns, aluminum prices may rise further. The operating range of SHFE aluminum main contract is 20700 - 20960 yuan/ton, and that of LME aluminum 3M is 2600 - 2650 dollars/ton [4] Group 4: Lead - **Market Performance**: The SHFE lead index fell 0.74% to 16804 yuan/ton, and LME lead 3S fell $15 to $1977/ton [5] - **Industry Situation**: The lead industry shows a pattern of weak supply and demand. The supply of lead concentrates and waste lead - acid batteries is tight, restricting the smelter's production. The continuous losses of secondary lead have led to production cuts in Anhui. Downstream consumption is weaker than in previous years, and dealers' finished - product inventory is at a historical high [5] - **Price Outlook**: The supply of lead ingots is marginally narrowing, providing some support. However, if the commodity sentiment weakens and secondary smelting recovers, lead prices still face significant downside risks [5] Group 5: Zinc - **Market Performance**: The SHFE zinc index rose 0.34% to 22211 yuan/ton, and LME zinc 3S rose $13.5 to $2871/ton [7] - **Industry Situation**: Zinc ore and zinc ingots remain in surplus, with inventory accumulation. The TC of zinc concentrates is rising, and the domestic supply is loose. The downstream enterprise's operating rate has not improved significantly. After long - term destocking in the LME market, the LME zinc warrant is at a low level, and the LME zinc monthly spread has increased. The pattern of weak domestic and strong overseas markets is intensifying, and the SHFE - LME ratio is accelerating downward [7] - **Price Outlook**: Some institutional and foreign - capital seats regard zinc as a short - allocation variety in non - ferrous metals, with high consensus on shorting. It is expected to show a low - level oscillating pattern with limited short - term downside [7] Group 6: Tin - **Supply**: The resumption of tin mines in Wa State, Myanmar, is slow. Yunnan is still facing a severe shortage of tin mines, with smelters' raw - material inventory generally less than 30 days and a low operating rate. Some smelters plan to conduct maintenance in September, and the refined tin production in September is expected to decline by 29.89% month - on - month [8] - **Demand**: The downstream is in the off - season, with weak traditional consumption areas. Although AI computing power has increased some tin demand, it has limited impact on overall demand [8] - **Price Outlook**: The off - season demand is weak, but the short - term supply decline is significant. Tin prices are expected to oscillate in the short term [8] Group 7: Nickel - **Market Performance**: Nickel prices oscillated. The US PPI data cooled unexpectedly, and the US dollar index initially fell and then recovered [10] - **Industry Situation**: The profit of nickel - iron plants has improved but is still low. The stainless - steel plants' production in August and September is expected to increase, supporting the nickel - iron price. The supply of intermediate products is short, and the demand from some electric - nickel and nickel - sulfate producers provides price support [10] - **Price Outlook**: The short - term macro - environment is positive, and the expectation of interest - rate cuts may drive non - ferrous metals, including nickel, to strengthen. In the long - term, the US easing expectation and China's anti - involution policy will support nickel prices. It is recommended to go long on dips. The operating range of SHFE nickel main contract this week is 115000 - 128000 yuan/ton, and that of LME nickel 3M is 14500 - 16500 dollars/ton [10] Group 8: Lithium Carbonate - **Market Performance**: The Wukuang Steel Union's lithium carbonate spot index (MMLC) fell 2.73% to 71,237 yuan. The LC2511 contract closed at 70,720 yuan, down 2.99% [12] - **Industry Situation**: The resumption of the Jiaxiaowo mine may reverse the supply - demand repair expectation, suppressing lithium prices. In September, the domestic lithium carbonate is expected to continue destocking [12] - **Price Outlook**: The spot strength may support the bottom. The reference operating range of the Guangzhou Futures Exchange's lithium carbonate 2511 contract is 68,600 - 72,500 yuan/ton [12] Group 9: Alumina - **Market Performance**: On September 10, 2025, the alumina index rose 0.14% to 2934 yuan/ton, and the position decreased by 0.4 to 391,000 lots [14] - **Industry Situation**: The spot price in Shandong decreased by 10 to 3020 yuan/ton, with a premium of 105 yuan/ton over the 10 - contract. The overseas MYSTEEL Australia FOB price remained at $337/ton, and the import window is open. The futures warehouse receipts decreased by 0.78 to 121,900 tons [14] - **Price Outlook**: Overseas ore supply is improving, and the over - capacity in the smelting segment is difficult to change in the short term. The expectation of the Fed's interest - rate cut may drive the non - ferrous sector to strengthen. It is recommended to wait and see in the short term. The reference operating range of the domestic main contract AO2601 is 2850 - 3250 yuan/ton [14] Group 10: Stainless Steel - **Market Performance**: The stainless - steel main contract closed at 12915 yuan/ton, down 0.27%. The position decreased by 2037 to 285,900 lots [17] - **Industry Situation**: The spot prices in Foshan and Wuxi remained stable. The raw - material prices also remained unchanged. The social inventory decreased by 2.71%, and the 300 - series inventory decreased by 2.09% [17] - **Market Outlook**: The stainless - steel spot market is oscillating narrowly, with price differentiation. The 304 cold - rolled price is stable with light trading, while the 304 hot - rolled price has increased slightly due to tight supply [17] Group 11: Cast Aluminum Alloy - **Market Performance**: The AD2511 contract rose 0.22% to 20350 yuan/ton, and the weighted contract position increased by 0.23 to 11,700 lots [19] - **Industry Situation**: The downstream is gradually transitioning from the off - season to the peak season. The cost is strongly supported by the increased supply disturbance of domestic and overseas scrap aluminum. The exchange has lowered the margin ratio, increasing market activity [19] - **Price Outlook**: Cast aluminum alloy prices are expected to remain high in the short term [19] Group 12: Data Summary - The report also provides daily data on non - ferrous metals, including LME and SHFE inventory, inventory changes, warrant cancellation ratio, cash - 3M spread, SHFE position, position changes, spot premium, and import - export data [22]

Group 1 - The core viewpoint of the article highlights the weakening U.S. employment data, which has led to an increase in expectations for interest rate cuts by the Federal Reserve [2][54][62] - The S&P 500 index rose by 0.3%, while the Hang Seng Index increased by 1.4% during the week [2][3] - The U.S. 10-year Treasury yield fell by 13.0 basis points to 4.1%, and the dollar index decreased by 0.1% to 97.74 [2][3] Group 2 - The article notes that the U.S. added only 22,000 jobs in August, significantly below the expected 75,000, with the unemployment rate rising to 4.3% [62][73] - The ADP reported an increase of 54,000 jobs in August, also below the expected 68,000 [62] - Job openings in July were reported at 7.181 million, lower than the expected 7.382 million, indicating a weakening demand in the labor market [62] Group 3 - The article discusses the performance of various sectors, with communication services, consumer discretionary, and healthcare sectors showing increases of 5.1%, 1.6%, and 0.3% respectively in the S&P 500 [7] - In the Hang Seng Index, healthcare, materials, and consumer discretionary sectors rose by 7.1%, 6.6%, and 3.6% respectively [10] - Conversely, energy, financials, and utilities sectors in the S&P 500 saw declines of 3.5%, 1.7%, and 1.1% respectively [7] Group 4 - The article highlights that the market is now shifting from rate cut expectations to recession trading due to the disappointing employment data [72] - The Federal Reserve's expectation for a 50 basis point rate cut in September has increased following the weak employment figures [54][62] - The article emphasizes the importance of upcoming CPI data and the potential for further adjustments in employment figures [54][62]

Group 1 - The core viewpoint of the article highlights that the U.S. non-farm payroll data for August significantly underperformed expectations, with only 22,000 jobs added compared to the forecast of 75,000, and the unemployment rate rising to a new high of 4.3% [1][6][8] - Employment conditions weakened across most industries, particularly in cyclical sectors, which saw a reduction of 48,000 jobs, a decline that expanded by 26,000 from the previous month [1][6][10] - The private sector added only 38,000 jobs in August, which is below the expected 75,000, indicating a broader trend of employment deterioration [1][6][10] Group 2 - The labor market is currently characterized by a fragile balance of supply and demand, with both sides showing weakness, leading to a potential upward trend in the unemployment rate [2][14][23] - The credibility of the August non-farm data is questioned due to a low response rate of 56.7%, the lowest in recent years, suggesting that future revisions may significantly alter the current figures [2][14][20] - The expected equilibrium level of job creation in the U.S. for the second half of the year is projected to be between 30,000 and 80,000 jobs, with the unemployment rate likely to continue rising if job creation remains stagnant [2][23][32] Group 3 - Following the release of the non-farm data, market sentiment shifted from "rate cut trading" to "recession trading," with expectations for a 50 basis point rate cut in September increasing to 11% [3][6][10] - The market anticipates two rate cuts by the end of the year, although this is contingent on the unemployment rate rising to 4.6% or higher, which is considered a low probability scenario [3][6][10] - The bond market reacted with a decline in the 10-year Treasury yield from approximately 4.16% to 4.06%, indicating a shift in investor sentiment towards a more cautious outlook [3][6][10]

Investment Rating - The report maintains a "Positive" investment rating for the industry [9]. Core Insights - The report highlights a continued decline in non-farm payrolls, leading to a resurgence in recession trading, emphasizing the importance of gold as a strategic investment opportunity. The market is increasingly concerned about demand falling below expectations, which may signal a return to relative gains for precious metals [5][6]. Summary by Sections Precious Metals - The report notes that the recent decline in non-farm payrolls has led to a renewed focus on the gold sector, with gold outperforming copper. This shift indicates growing market concerns about demand [5]. - Three catalysts are identified for the recent rise in gold prices: 1. Strengthened expectations for interest rate cuts, with nearly 90% probability for a September rate cut following dovish signals from Powell [5]. 2. Increased geopolitical risks, particularly from the Russia-Ukraine situation and trade tensions with India [5]. 3. Continued central bank purchases of gold, with global central banks increasing their gold holdings for ten consecutive months [5]. - The report suggests a shift towards increasing allocations in gold stocks, highlighting companies such as Zhaojin Mining, Chifeng Jilong Gold Mining, and Shandong Gold Mining as potential beneficiaries [5]. Industrial Metals - The report indicates that expectations for interest rate cuts are driving stability in copper and aluminum prices. Copper prices have shown a slight increase, while aluminum prices have declined [6]. - Inventory levels for copper and aluminum have increased, with copper stocks rising by 5.79% week-on-week and aluminum stocks increasing by 0.87% [6]. - The report anticipates that while demand for copper and aluminum may decline in the second half of the year, the supply constraints will limit the extent of this decline [6]. - Key companies to watch in the copper sector include Luoyang Molybdenum, Zijin Mining, and Jinchuan Group, while in aluminum, companies like Zhongfu Industrial and Hong Kong China Aluminum are highlighted [6]. Strategic and Energy Metals - The report emphasizes the strategic value of rare earths and tungsten, noting that recent regulatory measures in China are likely to enhance the market for these metals [7]. - The report also highlights cobalt and nickel as metals with high supply concentration, with cobalt prices expected to rise due to strategic purchases by the U.S. government [7]. - Lithium is noted to be in a bottoming phase, with expectations for increased demand in energy storage applications [7]. Key companies in this sector include Ganfeng Lithium and Tianqi Lithium [7].