Core Insights - Gold prices experienced a significant drop of over 6% after reaching a historical high of $4,380 in October 2025, causing market panic. This volatility is not an isolated incident, as similar drops have occurred five times in the past century, with declines ranging from 22% to 65% [1][3]. Group 1: Historical Context of Gold Price Drops - Historical analysis reveals that two main factors consistently influence gold price fluctuations: the Federal Reserve's monetary policy and the U.S. dollar credit cycle. When both factors align, gold's status as a "safe haven" diminishes [3][15]. - In January 1980, gold peaked at $850 per ounce but plummeted to below $300 by 1982, marking a 65% decline. This drop was triggered by extreme monetary policies implemented by then-Fed Chairman Paul Volcker to combat hyperinflation, which raised the federal funds rate to a historic high of 20% [3][5]. - Between 1996 and 1999, gold prices fell from $415 to $252, a 40% decrease, driven by a booming tech sector that attracted funds away from gold to riskier assets, alongside a strengthening dollar [5][7]. Group 2: Market Dynamics and Institutional Behavior - In 1999, the Bank of England's decision to sell approximately 400 tons of gold reserves led to a shift in the supply-demand structure and eroded market confidence in gold's value. This central bank selling, combined with a risk asset rally, created a prolonged downward pressure on gold prices [7][9]. - During the 2008 financial crisis, gold failed to act as a safe haven as institutions sold off all liquid assets, including gold, to maintain cash flow amid liquidity shortages. This behavior was reflected in the significant reduction of holdings in the SPDR Gold Trust, the largest gold ETF [9][11]. Group 3: Recent Trends and Future Implications - In 2011, gold reached a high of $1,920 but entered a bear market, dropping to $1,046 by 2015, a 46% decline. This was primarily due to the Fed's shift in monetary policy and a recovering U.S. economy that redirected funds to the stock market [11][13]. - In 2022, the Fed initiated an aggressive rate hike cycle, raising rates by a total of 425 basis points over the year, which led to a 22% decline in gold prices as the dollar index surged to a 20-year high [13][15]. - The analysis of five major price drops reveals two common factors: the Federal Reserve's monetary policy shift and the strengthening of the dollar, both of which exert significant downward pressure on gold prices. Additional factors, such as central bank selling and liquidity crises, can amplify these declines but require alignment with the primary factors to trigger a sustained downturn [15].

Core Insights - The performance of the gold and non-ferrous metal sectors in 2025 is significantly influenced by the dual factors of the Federal Reserve's interest rate cuts and external uncertainties, with gold futures prices surpassing $4200 per ounce, marking a year-to-date increase of over 50% [2][4] - The non-ferrous metal sector shows a mixed performance, with industrial metals facing price volatility due to tariff policies and global economic expectations, while energy metals are showing signs of recovery with reduced price declines and improved profit quality [2][5] Industry Performance - The non-ferrous metal industry has maintained high production levels and fixed asset investment growth, leading to increased profitability across most metal prices [5][11] - In the first half of 2025, the A-share precious metal sector achieved revenue of 188.25 billion yuan, a year-on-year increase of 27.15%, and a net profit of 9.68 billion yuan, up 64.72%, indicating a clear volume-price resonance [6][12] - The industrial metal sector reported revenue of 1.36 trillion yuan, a 3.46% increase, with net profit growth reaching 24.42%, while energy metals saw a remarkable turnaround with a net profit increase of 1389.34% [6][12] Market Dynamics - The recent surge in the non-ferrous metal sector is attributed to macroeconomic monetary easing policies and supply-demand imbalances, with significant capital inflows into leading companies like Zijin Mining and Luoyang Molybdenum [5][11] - The price of copper, a key indicator of global economic health, has risen by 13% this year, nearing historical highs, despite cautious capital expenditure from major copper companies [7][11] - The geopolitical risks and policy uncertainties, including the U.S. government shutdown and ongoing conflicts, have driven investors towards gold as a safe haven, further boosting demand [4][5] Company Performance - Leading companies in the sector, such as Zijin Mining and Luoyang Molybdenum, have seen significant stock price increases, with Zijin Mining's A-share price rising by 99.47% year-to-date [11] - The performance of copper-related companies remains resilient, with Jin Chengxin achieving a 198.52% year-on-year increase in copper metal production, supporting its revenue growth [17] - Conversely, the lithium market has faced severe challenges, with companies like Shengxin Lithium Energy reporting significant losses due to plummeting lithium prices [17]