Core Insights - The current gold-oil ratio is at a historically high level, second only to the negative pricing phase of crude oil during the COVID-19 pandemic in 2020, indicating a significant divergence in pricing factors between crude oil, which is fundamentally priced, and gold, which is macroeconomically priced [1] Group 1: Relationship Between Gold, Oil, and the Dollar Index - Gold prices have a long-term negative correlation with the dollar index, as shown in regression analyses from 1986-2000, 2000-2020, and 2021-2025 [2] - The relationship between oil prices and the dollar index changed post-2020, with historical data indicating a positive correlation from 1988-2000, a negative correlation from 2000-2020, and a return to positive correlation from 2021 onwards [2] Group 2: Historical Context of Gold-Oil Ratio - The dynamics of the gold-oil ratio have shifted since 2000, with a tendency for oil prices to be inversely related to gold prices, particularly when the dollar index is weak [4] - Historically, extreme high values of the gold-oil ratio have coincided with significant declines in oil prices, with subsequent recoveries marked by improvements in the real economy [4] - Following extreme value regressions, gold prices tend to peak 4-5 months later, as evidenced by past trends in 2016 and 2020, where oil price recoveries signaled economic rebounds [4] Group 3: Attributes of Gold and Oil - Gold possesses financial attributes, while oil is characterized by its strong physical attributes, influencing their respective market behaviors [5]

Group 1 - The current gold-oil price ratio is at its second-highest level in history, only behind the negative pricing phase during the 2020 pandemic, indicating significant divergence in pricing factors [1][2] - Oil pricing is fundamentally driven, while gold pricing is influenced by macroeconomic factors [2][4] Group 2 - Over the past decade, oil prices have closely followed the fundamentals, particularly OECD crude oil inventories, which are currently at a moderately low level [3] - Despite the low inventory levels, oil prices have started to decline due to market expectations of a continued loose fundamental environment for crude oil through 2026, leading to increased inventory accumulation [3] Group 3 - Gold prices have shown a nearly negative correlation with the US 10-year Treasury yield over the past decade, as gold is a non-yielding asset whose attractiveness is linked to real interest rates [4] - The anticipated interest rate cuts in the US starting September 2025, with a 25 basis point reduction, are expected to enhance gold's appeal as market expectations shift towards a rate-cutting cycle [4] Group 4 - The demand for gold from emerging market central banks has increased significantly since the onset of the Russia-Ukraine conflict, contributing to the upward pressure on gold prices [4]

Investment Rating - Industry Rating: Outperform the Market (maintained rating) [4] Core Viewpoints - The current gold-oil price ratio is at a historically high level, second only to the negative pricing phase during the pandemic in 2020. The pricing factors differ, with crude oil being fundamentally priced and gold being macroeconomically priced [10][12]. - Oil prices have closely followed the fundamentals, slightly leading the US 10-year Treasury yield. Currently, OECD crude oil inventories are at a moderately low level, but oil prices have started to decline due to market expectations of a continued loose supply in 2026, which may exacerbate inventory accumulation [2][12]. - Gold prices are primarily driven by macroeconomic factors. Over the past decade, gold prices have shown a nearly negative correlation with the US 10-year Treasury yield. As real interest rates decline, the attractiveness of gold increases. The market anticipates a 25 basis point rate cut starting in September 2025, with expectations of a decline in the US 10-year Treasury yield [3][17]. - The current demand for gold is also linked to central bank purchases in emerging markets, which have increased significantly since the onset of the Russia-Ukraine conflict. Emerging market central banks hold a lower proportion of gold compared to developed market central banks, making this demand a significant factor in driving gold prices [18]. Summary by Sections 1. Gold-Oil Price Ratio - The current gold-oil price ratio is at a historically high level, second only to the negative pricing phase during the pandemic in 2020 [10]. - Oil prices have closely followed the fundamentals, slightly leading the US 10-year Treasury yield, with current OECD crude oil inventories at a moderately low level [2][12]. - Market expectations of a continued loose supply in 2026 may exacerbate inventory accumulation, leading to a decline in oil prices [12][13]. 2. Pricing Mechanisms - Crude oil is fundamentally priced, while gold is macroeconomically priced [16]. - Gold prices have shown a nearly negative correlation with the US 10-year Treasury yield, with real interest rates impacting gold's attractiveness [3][17]. - The anticipated rate cut in the US and the expected decline in the US 10-year Treasury yield are significant for gold pricing [17]. 3. Central Bank Demand - Increased purchases of gold by emerging market central banks since the Russia-Ukraine conflict have contributed to rising gold prices [18].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The pricing of traditional large non - ferrous sectors is mainly driven by the macro - mainline, with the micro - fundamentals or balance - sheet pricing taking a back seat. Aluminum prices are likely to fluctuate within the current price range and await further guidance from the macro and micro aspects. The export demand for aluminum is expected to decline, and the short - term focus for aluminum prices is on the downside space [3]. - Alumina is in a low - level consolidation with a weak upward drive. The search for a price bottom continues, and attention should be paid to the marginal increase in supply in the second quarter [4]. Summary by Related Catalogs Aluminum - **Market Situation**: Due to the repeated tariff events and the suppression of risk sentiment from overseas macro factors, aluminum prices failed to break through the 21,000 mark in the first quarter and recently dropped below 20,000. The short - term upward drive is weak, and the downward depth is affected by tariff uncertainties and domestic policy expectations. From the perspective of export demand, a decline is still expected [3]. - **Micro - fundamentals**: As of April 10, the weekly social inventory of aluminum ingots decreased by 30,000 tons to 744,000 tons. The weekly output of aluminum plate, strip, and foil and aluminum profiles declined, and the sample production schedule was slightly stable. The processing fee of aluminum rods increased by 140 yuan/ton to 410 yuan/ton, but the downstream processing profit is still at a relatively low level compared to the same period in previous years [3]. Alumina - **Market Situation**: Affected by the swing of macro - pricing of traditional non - ferrous metals, alumina is in a low - level consolidation with a slight rebound. However, the main drive for price decline still exists. The market is in an oversupply situation, and the price is approaching the cost anchor. The market is currently relying on supply reduction, but the actual impact of production cuts is limited [4]. - **Micro - fundamentals**: The export window of alumina remains closed. As of April 10, the total social inventory of alumina increased by 53,000 tons to 3,443,000 tons (Aladdin data). The spot price of domestic alumina continued to decline, and the Australian FOB forward - spot price also decreased. The micro - fundamentals lack sufficient positive support, and the price is expected to continue to search for the bottom [4]. Trading End - **Spread**: The term B - structure of Shanghai aluminum has expanded, while that of alumina has narrowed. The near - month spread of Shanghai aluminum has rapidly narrowed [7][10]. - **Volume and Open Interest**: The open interest and trading volume of Shanghai aluminum's main contract have declined, while the open interest of alumina's main contract has decreased significantly, but the trading volume has slightly increased. The open - interest - to - inventory ratios of Shanghai aluminum and Shanghai alumina are relatively low [16][21]. Inventory - **Bauxite**: As of April 11, the port inventory and inventory days of imported bauxite increased. In March, the bauxite inventory of alumina enterprises slightly recovered. The port shipping volume decreased significantly, and the arrival volume decreased sharply [25][31][32]. - **Alumina**: The total national inventory continued to rise, with a significant reduction in port inventory. As of April 10, the total alumina inventory was 3,443,000 tons, an increase of 53,000 tons from the previous week [43][52]. - **Electrolytic Aluminum**: The social inventory continued to decline rapidly. As of April 10, the social inventory of aluminum ingots decreased by 30,000 tons to 744,000 tons [53]. - **Aluminum Products**: The spot and in - factory inventories of aluminum rods decreased slightly, and the shipping volume decreased significantly. In February, the export of aluminum products declined and was at a historically low level for the same period [58][106]. Production - **Bauxite**: In March, the domestic bauxite supply showed a recovery trend, with significant increases in production according to both Steel Union and SMM data. Imported bauxite was an important factor driving the increase in total supply [65]. - **Alumina**: The capacity utilization rate of alumina decreased significantly. As of April 11, the total operating capacity was 82.4 million tons, a weekly decrease of 6 million tons. The weekly output of metallurgical - grade alumina was 1.681 million tons, a decrease of 53,000 tons from the previous week [68]. - **Electrolytic Aluminum**: The operating capacity remained at a high level, and the proportion of molten aluminum increased seasonally. As of April 11, the weekly output of electrolytic aluminum was 837,500 tons, an increase of 300 tons from the previous week [72]. - **Downstream Processing**: The output of aluminum rods increased, while the output of plate, strip, and foil decreased slightly. The operating rate of domestic aluminum downstream leading enterprises continued to decline, indicating that the peak season is coming to an end [73][76]. Profit - **Alumina**: The profit of alumina has shown obvious losses, but the loss amplitude is limited. The profit of metallurgical - grade alumina according to the Steel Union's data was - 171.7 yuan/ton [88]. - **Electrolytic Aluminum**: The profit of electrolytic aluminum has fully recovered. However, the complex global macro - economic situation and uncertain trade policies have interfered with market expectations [95]. - **Processing Materials**: The processing fee of aluminum rods increased significantly, and the profit improved to some extent [96]. Consumption - **Import and Export**: The import losses of alumina and Shanghai aluminum have significantly decreased. In February 2025, the export of unwrought aluminum and aluminum products declined, and the export profits of aluminum processing materials showed a divergent trend [104][106]. - **Consumption Volume**: The apparent demand for primary aluminum decreased month - on - month, while the automobile production increased significantly month - on - month [113].