Core Insights - The unexpected surge in the prices of non-ferrous metals, including gold, silver, copper, and aluminum, is attributed to a paradigm shift in pricing dynamics, moving away from traditional macroeconomic indicators to global demand driven by central banks, particularly China's [2][3][5] Group 1: Precious Metals - International gold prices have increased by over 60% within the year, building on a 50% rise over the previous two years, while silver prices have also risen by more than 50% [3] - The current gold reserves of the People's Bank of China account for approximately 6-7% of its foreign exchange reserves, which is below the global average of 13-14%, indicating potential for further price increases [3][5] - A-shares in gold stocks have lagged behind gold price increases, suggesting a potential for valuation recovery as market expectations shift [4] Group 2: Industrial Metals - Prices for industrial metals such as copper, aluminum, and tin have risen by 27%, 12%, and 35% respectively as of November 30, with tungsten prices increasing over 100% [3] - The demand for industrial metals is increasingly linked to emerging industries like AI and renewable energy, which is counterbalancing the decline in traditional manufacturing demand [5][6] - The supply constraints in the cobalt market, due to export restrictions from the Democratic Republic of Congo, which supplies about 70% of the world's cobalt, have led to significant price increases [5][6] Group 3: Market Dynamics - The weakening of the US dollar and the reassessment of the strategic importance of upstream resources amid global de-globalization trends are contributing to the price increases in non-ferrous metals [3][5] - The traditional sensitivity of copper and aluminum prices to Chinese real estate data has diminished, as demand from new energy and AI sectors has become more significant [6] - The investment paradigm in the non-ferrous metals sector has shifted, necessitating a reevaluation of traditional analytical frameworks [6] Group 4: Investment Management Principles - In managing investment portfolios, controlling maximum drawdown is crucial, as significant volatility can negatively impact investor experience [7] - The importance of maintaining a safety margin in investment decisions is emphasized, which involves assessing the intrinsic value of companies while considering potential downside risks [8] - Establishing a disciplined approach to profit-taking and loss-cutting is essential, with decisions based on fundamental changes rather than fixed percentage thresholds [8]