Market Overview - On Thursday, the Shanghai Composite Index fell by 0.7%, the CSI 300 decreased by 0.8%, the STAR Market 50 dropped by 1.9%, the CSI 1000 declined by 1.1%, the ChiNext Index fell by 1.8%, and the Hang Seng Index decreased by 0.2% [4] - The best-performing sectors on Thursday were steel (+0.9%), non-ferrous metals (+0.8%), utilities (+0.1%), transportation (+0.1%), and banking (+0.1%). The worst-performing sectors were telecommunications (-2.8%), electronics (-2.2%), defense and military (-2.0%), media (-1.9%), and comprehensive (-1.8%) [4] - The total trading volume of the Shanghai and Shenzhen markets on Thursday was 24,217 billion yuan, with a net inflow of southbound funds amounting to 13.64 billion Hong Kong dollars [4] Important Insights Fixed Income Credit Bonds - The report defines exiting the low-interest rate environment as the 10-year government bond yield rising trend-wise above 2%. It notes that overseas economies typically exit low rates due to a combination of improving fundamentals and tightening monetary policy. In contrast, while China's economy is in a mild recovery phase, there is a lack of fundamental and policy support for a significant rise in interest rates in the short term, suggesting that the low-interest rate environment may persist for a longer duration. Based on overseas experiences, the median duration for major economies to exit low rates is 4.77 years, implying that China may require an additional 4 years to exit this phase [5] Macroeconomic Research - The report discusses the hawkish guidance from Powell regarding a potential rate cut in December, stating that there is "no conclusion yet." Market expectations for rate cuts may narrow, with no change in viewpoints. The driving factors include data releases, and there is a focus on the potential for the Federal Reserve to restart normalizing balance sheet expansion in 2026 [7][8]

Core Viewpoint - The Federal Reserve has lowered interest rates by 25 basis points, from a range of 4%-4.25% to 3.75%-4%, which was below market expectations of a 50 basis point cut [1][2][4]. Group 1: Federal Reserve Actions - The Fed's decision to stop balance sheet reduction is seen as a positive development, as it will enhance market liquidity [5][7]. - The cessation of balance sheet reduction means the Fed will no longer sell assets, preventing a contraction of market liquidity [7][8]. - The true easing of monetary policy is perceived to be more about halting balance sheet reduction rather than the interest rate cut itself [8]. Group 2: Market Reactions - Following the interest rate cut, the Nasdaq index experienced a decline, indicating market disappointment with the smaller-than-expected rate reduction [3][4]. - The market is expected to see increased capital outflows from the U.S., potentially benefiting assets in other countries [8]. Group 3: Company Insights - Nvidia has reached a market capitalization of over $5 trillion, becoming the first company to achieve this milestone, and is positioned to dominate the AI hardware market [10]. - The performance of various liquor companies has been disappointing, with Wuliangye facing significant challenges, suggesting a need for a recovery period similar to the real estate market [12]. Group 4: Investment Strategies - The Nasdaq index is currently at a high valuation, and historical patterns suggest a potential adjustment, with recommendations to start investing during a 15% pullback and to buy heavily during a 30% drop [13]. - The Shanghai Ningquan Asset Management Company has paused new investor subscriptions, a move typically aimed at protecting investors during high market valuations [14][15].

Core Viewpoint - The recent Federal Reserve meeting revealed significant monetary policy changes, including a 25 basis point rate cut and the potential for no further cuts in December, alongside the announcement of balance sheet reduction starting December 1, which may lead to greater liquidity in the market [1][2]. Summary by Sections Federal Reserve Meeting Outcomes - The Federal Reserve confirmed a 25 basis point rate cut, bringing the benchmark rate to a range of 3.75%-4% [1]. - There is a reduced likelihood of further rate cuts by year-end, with market expectations for a December cut dropping from over 90% to 60% [1][2]. - The announcement of balance sheet reduction starting December 1 indicates a shift towards larger-scale monetary easing, which is viewed positively for the market [1][2]. Market Reactions and Implications - The potential for no rate cut in December is seen as a negative signal for the market, but the balance sheet reduction is expected to provide significant liquidity support [2]. - The market is currently pricing in a greater than 50% chance of a December rate cut, suggesting that the Fed's communication aims to manage expectations and prevent overheating [2]. - The difference in impact between rate cuts and balance sheet adjustments is highlighted, with balance sheet expansion expected to have a more substantial effect on liquidity [2]. Global Economic Context - Recent agreements between the U.S. and China regarding tariffs are seen as a major positive for global capital markets, reducing uncertainty [3]. - Both countries are motivated to stimulate their capital markets, leading to synchronized stock market gains [4]. - The current global monetary easing environment is expected to drive both U.S. and Chinese stock markets to new highs [4]. Strategic Considerations - While the recent agreements are beneficial, there are concerns about the sustainability of U.S.-China relations, with potential for future conflicts [4][5]. - Investors are advised to prepare for both short-term opportunities and long-term risk management strategies to mitigate potential losses from geopolitical tensions [5].

Core Viewpoint - The recent rapid decline in gold prices is attributed to a typical technical correction after a significant increase of over 30% in the past month, with prices dropping from a high of $4300/oz to a low of $3900/oz [3][4][5]. Market Analysis - The sell-off in gold is primarily driven by speculative funds that entered the market during the recent price surge. These funds are taking profits due to overbought conditions and a reduction in geopolitical tensions, particularly regarding tariff issues between major countries [6][7][8]. - Despite the recent price drop, the holdings in gold ETFs remain stable, indicating a long-term positive outlook on gold fundamentals by most market participants [10][11]. - Central banks and private purchases of physical gold have not significantly decreased, suggesting that the purchasing power support for gold remains intact [12][13]. Future Outlook - The current price drop is likely a temporary correction, setting the stage for a potential future increase in gold prices [15]. - The direction of gold prices will largely depend on the Federal Reserve's actions regarding the dollar, particularly the likelihood of interest rate cuts and potential balance sheet expansion [16][17][19]. - Market expectations indicate a high probability of interest rate cuts this month, with a 100% bet on a cut by December, but the immediate impact on gold prices may be limited [18]. - A potential expansion of the Fed's balance sheet could have a more substantial impact on the dollar and, consequently, on gold prices [20][21]. Price Range Expectations - The price of gold is expected to fluctuate between $3800 and $4200/oz in the near term, with $3800 likely serving as a relative low point during this technical correction [22][25]. - Current observations show that gold prices have rebounded to $4000/oz, but the momentum for further increases to $4300/oz appears limited until significant positive developments occur [23][24].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - After Powell's hawkish statement, the prices of gold and silver dropped in the short term. The release of the Fed's loose monetary policy expectations still requires a certain period. However, the Fed Chairman has made a statement on balance sheet expansion. This FOMC meeting sent a signal that the December interest rate cut is still uncertain while strengthening the subsequent monetary policy idea of "rate cut + balance sheet expansion." In the loose monetary policy cycle, it is recommended to buy on dips for silver, which will benefit more. The reference operating range for the main contract of Shanghai Gold is 880 - 966 yuan/gram, and that for the main contract of Shanghai Silver is 10937 - 11690 yuan/kilogram [2]. Summary According to Related Catalogs Market Quotes - Shanghai Gold rose 0.69% to 910.92 yuan/gram, and Shanghai Silver rose 0.64% to 11265.00 yuan/kilogram. COMEX Gold was reported at 3949.30 US dollars/ounce, and COMEX Silver was reported at 47.54 US dollars/ounce. The yield of the 10 - year US Treasury bond was reported at 4.08%, and the US dollar index was reported at 99.13 [1]. - The Fed held an FOMC meeting early today. The tone of this meeting was a "hawkish rate cut." Powell's monetary policy statement was hawkish, and he also made a statement on the final balance sheet expansion [1]. Key Focus Directions of the FOMC Meeting - The statement on the subsequent interest rate path was more hawkish than market expectations. Powell stated that "a rate cut in December is not a certainty," and the lack of economic data could be a reason to pause interest rate adjustments [1]. - The discussion on the balance sheet was more dovish than market expectations in the medium term. Although the FOMC decided to end the balance sheet reduction on December 1st, which was later than market expectations, Powell clearly stated that the Fed would expand the balance sheet again. This was his first key statement on balance sheet expansion in this rate - cut cycle [1]. - The voting was more hawkish than market expectations. Fed Governor Milan voted against as expected and supported a 50 - basis - point rate cut. Governors Bowman and Waller did not support aggressive rate cuts. Hawkish voting member Schmidt voted against and supported keeping the interest rate unchanged at this FOMC meeting [2]. Gold and Silver Data Comparison (2025 - 10 - 29 vs. 2025 - 10 - 28) - **Gold**: COMEX gold's closing price (active contract) decreased by 0.67% to 3941.70 US dollars/ounce, trading volume decreased by 14.96% to 28.11 million lots, and open interest increased by 2.43% to 52.88 million lots. LBMA gold's closing price increased by 1.47% to 4006.70 US dollars/ounce. Shanghai Gold's closing price (active contract) increased by 1.05% to 910.88 yuan/gram, trading volume decreased by 25.73% to 47.79 million lots, and open interest decreased by 1.93% to 34.27 million lots. The closing price of AuT + D increased by 1.75% to 912.42 yuan/gram, trading volume decreased by 23.05% to 52.13 tons, and open interest decreased by 1.19% to 255.69 tons [5]. - **Silver**: COMEX silver's closing price (active contract) increased by 0.29% to 47.28 US dollars/ounce, and open interest increased by 1.75% to 16.58 million lots. LBMA silver's closing price increased by 3.74% to 48.18 US dollars/ounce. Shanghai Silver's closing price (active contract) increased by 2.62% to 11338.00 yuan/kilogram, trading volume decreased by 28.93% to 125.13 million lots, and open interest decreased by 1.93% to 68.89 million lots. The closing price of AgT + D increased by 3.23% to 11351.00 yuan/kilogram, trading volume decreased by 20.90% to 605.45 tons, and open interest decreased by 2.92% to 3609.146 tons [5].

Group 1 - The Federal Reserve has lowered interest rates by 25 basis points as expected, but maintains a hawkish stance regarding future rate cuts, indicating no consensus on a December rate cut due to the stable employment market [1][3] - The Fed has officially decided to end its balance sheet reduction on December 1, ceasing the monthly liquidity contraction of $40 billion, and will adjust the structure of maturing asset reinvestments to focus on Treasury securities instead of MBS [2][6] - Powell highlighted that the government shutdown could negatively impact the economy, with previous estimates suggesting a $18 billion loss, but current employment and inflation trends remain stable [3][5] Group 2 - The Fed's description of inflation and employment remains largely unchanged, but the economic outlook has become more optimistic, indicating moderate economic expansion [2][3] - The current level of bank reserves is approaching a liquidity threshold of 9% of GDP, which is critical for maintaining financial stability, as a drop below this level could lead to liquidity risks [6][7] - The potential for the Fed to restart normal balance sheet expansion is contingent on the increase of non-reserve liabilities, which currently represent 53% of the Fed's total liabilities, still below the 60.6% observed in September 2019 [8] Group 3 - The average tariff level in the U.S. is projected to rise from 2.4% to 17.9% by 2025, contributing to higher CPI for imported goods, with current consumer exposure to tariffs at approximately 35% [4][5] - The transmission of tariffs to inflation may increase, potentially invalidating the notion of "transitory inflation" as the burden shifts more towards consumers [4][5] - The dollar index is expected to remain stable around 100, supported by resilient corporate capital expenditures, while the stock market outlook remains positive due to the synergy between AI investments and economic growth [9][10]

Core Viewpoint - Chongqing Rural Commercial Bank (Yunong Bank) reported its Q3 2025 financial results, showing a slight increase in revenue but a significant decline in non-interest income, raising concerns about its financial health and market position [1][3]. Financial Performance - For the first nine months of 2025, the bank achieved an operating income of 21.658 billion yuan, a year-on-year increase of 0.67%, and a net profit attributable to shareholders of 10.694 billion yuan, up 3.74% year-on-year [1]. - The bank's non-interest income fell by 20.9% year-on-year, with a quarterly decline that worsened each quarter, indicating a significant drag on overall revenue growth [1][6]. - The total assets of the bank reached approximately 1.66 trillion yuan by the end of September, marking a 9.3% increase from the beginning of the year, the highest growth rate for the same period in nearly four years [3]. Loan and Capital Management - Customer loans and advances totaled nearly 778 billion yuan, reflecting an 8.92% increase year-to-date, also the highest growth rate in four years, primarily driven by corporate loans [3]. - The bank's core Tier 1 capital adequacy ratio decreased to 12.98%, and the total capital adequacy ratio fell to 14.77%, both down by over 1 percentage point since the beginning of the year, indicating a decline in capital strength [3]. Strategic Initiatives - The bank aims to increase its asset scale by an average of 100 billion yuan annually over the next three years, with a focus on agricultural loans and inclusive small and micro loans [3][4]. - The bank plans to enhance its loan issuance capabilities by leveraging digital tools and industry chain dynamics, targeting significant strategic projects and improving inclusive finance [4]. Management Changes - The bank appointed Liu Xiaojun as the new chairman and executive director, marking a significant leadership change since its establishment in 2008 [8]. - Recent management changes include the retirement of several vice presidents and the appointment of new executives, resulting in a restructured leadership team [9].

1. Report Industry Investment Rating - Not provided in the report 2. Core Viewpoints of the Report - The current Fed's monetary policy is at the beginning of an easing cycle, and the most important driver - the selection of the new Fed Chair - has not been announced. It is recommended to maintain a long - position mindset in precious metals strategies. After a short - term rapid price correction and stabilization, it will form a good window for buying on dips. The reference operating range for the main contract of Shanghai Gold is 934 - 1050 yuan/gram, and for the main contract of Shanghai Silver is 10937 - 12500 yuan/kilogram [4] 3. Summary According to Relevant Catalogs 3.1 Market Quotes - On October 20, 2025, Shanghai Gold fell 1.27% to 973.88 yuan/gram, Shanghai Silver fell 3.94% to 11748.00 yuan/kilogram; COMEX Gold fell 0.85% to 4267.90 US dollars/ounce, COMEX Silver fell 5.01% to 50.63 US dollars/ounce. The US 10 - year Treasury yield was reported at 4.02%, and the US dollar index was reported at 98.56 [2] - The Fed's monetary policy has entered a critical turning point. Fed Chairman Powell said that the US economic data during the government shutdown was better than expected, the downside risk in the labor market has increased, and commodity price increases are mainly due to tariff policies. He announced that the Fed will soon end the quantitative tightening (QT) operation. Recently, loan risk events occurred in some small US banks, which, combined with Powell's speech, provides a reason for the Fed to end balance - sheet contraction and move towards expansion [2] - On October 17, the silver spot leasing rate dropped significantly from 25.8% to 15.9%. From October 1 to the present, COMEX silver inventory decreased by 663.3 tons to 15845 tons. The silver price difference between New York and London has recovered. Overseas silver spot shortages are not a short - term event, and the tight supply of overseas silver spot will continue to support the silver price [3] 3.2 Strategy Views - It is recommended to maintain a long - position mindset in precious metals strategies. After a short - term rapid price correction and stabilization, it will form a good window for buying on dips. The reference operating range for the main contract of Shanghai Gold is 934 - 1050 yuan/gram, and for the main contract of Shanghai Silver is 10937 - 12500 yuan/kilogram [4] 3.3 Data Summary - For COMEX Gold on October 17, 2025, the closing price of the active contract was 4267.90 US dollars/ounce, a decrease of 1.76% from the previous day; the trading volume was 55.89 million lots, an increase of 52.37%; the open interest was 52.88 million lots, an increase of 2.43% [7] - For COMEX Silver on October 17, 2025, the closing price of the active contract was 50.63 US dollars/ounce, a decrease of 5.25% from the previous day; the open interest was 16.58 million lots, an increase of 1.75%; the inventory was 15846 tons, a decrease of 0.53% [7]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - The current Fed's monetary policy is at the beginning of an easing cycle, and the most important factor - the new Fed chairperson has not been announced. It is recommended to maintain a long - term view on precious metals. After a short - term price correction and stabilization, it will form a good buying opportunity. The reference operating range for the Shanghai Gold main contract is 934 - 1050 yuan/gram, and for the Shanghai Silver main contract is 10937 - 12500 yuan/kilogram [11]. Summary by Directory 1. Week - to - Week Assessment and Market Outlook - **Weekly Market Review**: This week, gold and silver prices were strong. By the close of the Friday daytime session, Shanghai Gold rose 10.90% to 999.80 yuan/gram, Shanghai Silver rose 10.53% to 12249.00 yuan/kilogram; COMEX gold rose 5.76% to 4267.90 US dollars/ounce, COMEX silver rose 6.55% to 50.63 US dollars/ounce; the 10 - year US Treasury yield was 4.02%, and the US dollar index fell 0.27% to 98.56 [11]. - **Fed's Policy Shift**: Fed Chair Powell indicated that the Fed will soon end quantitative tightening (QT). The US small - bank loan risk event this week provides a reason for the Fed to end balance - sheet reduction and move towards expansion. The market has fully priced in a 25 - basis - point interest rate cut at the Fed's meeting this month and expects a 93% probability of another 25 - basis - point cut in December [11]. - **Silver Spot Situation**: On October 17, the silver spot lease rate dropped from 25.8% to 15.9%. From October 1 to now, COMEX silver inventory has decreased by 663.3 tons to 15845 tons. Overseas silver spot shortages will continue to support silver prices [11]. 2. Market Review - **Price Performance**: Gold and silver prices were strong this week. Shanghai Gold rose 10.90%, Shanghai Silver rose 10.53%, COMEX gold rose 5.76%, and COMEX silver rose 6.55% [29]. - **Position Changes**: Shanghai Gold's total position decreased by 5.49% to 395,900 lots, and COMEX gold's total position as of the latest report period increased by 2.43% to 528,800 lots. Shanghai Silver's total position slightly increased by 0.14% to 837,600 lots, and COMEX silver's total position as of the latest report period increased by 1.75% to 165,800 lots [31][33]. - **ETF Holdings**: As of October 17, the total gold ETF holdings in the Reuters statistical scope were 2315.5 tons, and the total foreign silver ETF holdings were 28259.31 tons [39]. 3. Interest Rates and Liquidity - **US Treasury Yields**: Relevant graphs show the spreads between the 10 - year and 2 - year US Treasury bonds and short - term Treasury yields [48][49]. - **Interest Rates and Inflation Expectations**: Graphs display the US federal funds rate, overnight reverse - repurchase rate, 10 - year nominal interest rate, real interest rate, and inflation expectations [51][52]. - **Fed's Balance Sheet**: The table shows the weekly changes in the Fed's balance sheet, including asset and liability sides [54]. 4. Macroeconomic Data - **CPI & PCE**: In August, the US CPI year - on - year was 2.9%, the seasonally adjusted CPI month - on - month was 0.4%. The un - seasonally adjusted core CPI year - on - year was 3.1%, and the seasonally adjusted core CPI month - on - month was 0.3% [65]. - **Employment**: Affected by the US government shutdown, the latest weekly US unemployment data is missing [68]. - **PMI & PPI**: In September, the US ISM manufacturing PMI was 49.1, and the ISM non - manufacturing PMI was 50 [71]. - **New Housing Data**: In August, the annualized number of new housing sales in the US was 800,000, the annualized value of building permits was 1.33 million, and the annualized value of new housing starts was 1.307 million [74]. 5. Precious Metal Spreads - **Gold Basis**: The graph shows the spread between gold TD and SHFE gold [77]. - **Silver Basis**: The graph shows the spread between silver TD and SHFE silver [80]. - **Domestic - Foreign Spreads**: Graphs show the domestic - foreign spreads of gold and silver [84][86]. 6. Precious Metal Inventories - **Silver Inventory**: Graphs show the silver inventories of Shanghai Gold Exchange, Shanghai Futures Exchange, COMEX, and LBMA [90][93]. - **Gold Inventory**: Graphs show the gold inventories of COMEX and LBMA [97].

Core Insights - Federal Reserve may end balance sheet reduction in the coming months, but the role of the U.S. Treasury was not mentioned by Powell [1] - The U.S. Treasury is increasing the supply of Treasury bills, necessitating a higher general account balance [1] - The general account balance has been targeted at approximately $850 billion, with expectations to reach at least $900 billion by the next quarterly report on November 3 [1] Group 1 - The Federal Reserve's balance sheet reduction will decrease bank reserves, which are currently around $3 trillion, nearing a "sufficient" level [1] - Barclays strategists indicate that the growth in the Treasury's general account balance consumes reserves, increasing pressure on the Fed to halt balance sheet reduction and eventually expand its balance sheet [1] - The report from October 14 suggests that the Fed will need to expand its balance sheet to address the growth in non-reserve liabilities [1] Group 2 - The U.S. Treasury is accelerating the weekly auction of Treasury bills, with a net supply of $146 billion this month, exceeding expectations by $80 billion [1] - The increase in Treasury bill supply requires the Treasury's general account balance to rise to keep pace with cash flow [1] - According to policy, the general account balance should cover total expenditures and maturing marketable debt over a week [1]