Core Viewpoint - International gold prices have reached new highs, driven by expectations of interest rate cuts by the Federal Reserve, leading to significant inflows into the non-ferrous metals sector, particularly highlighted by the surge in the non-ferrous metal ETF (159876) which attracted 75.6 million yuan in just two days, reaching a new high of 207 million yuan as of September 2 [1][3]. Group 1: Gold Market Dynamics - On September 2, spot gold in London surpassed $3,500 per ounce, marking a new high, with Morgan Stanley projecting a year-end target of $3,800 per ounce [3]. - Multiple institutions predict that after four months of consolidation, precious metals are poised to enter a new upward trend [3]. - The macroeconomic environment is characterized by increased fiscal dominance in the U.S., leading to a trend of abundant dollar liquidity, which is favorable for global risk assets and supports gold as an anti-inflation asset [3]. Group 2: Non-Ferrous Metals Sector Outlook - The non-ferrous metals sector is experiencing a tight supply-demand balance, with high growth prospects due to several factors: 1. Supply-side improvements are expected as "anti-involution" initiatives accelerate the clearance of excess capacity, enhancing profitability for non-ferrous enterprises [3]. 2. Demand from emerging industries such as new energy, infrastructure, artificial intelligence, and robotics is increasing the need for non-ferrous metals [3]. 3. The global economic recovery, coupled with a depreciating dollar, is supporting non-ferrous metal prices [3]. - The industrial metals sector is currently undervalued, indicating potential for upward valuation adjustments, with a bullish market for non-ferrous metals beginning to take shape [4]. Group 3: Investment Strategy - The non-ferrous metal ETF (159876) and its linked funds are designed to track the CSI Non-Ferrous Metals Index, which includes significant weights in copper (25.3%), aluminum (14.2%), rare earths (13.8%), gold (13.6%), and lithium (7.6%), providing a diversified investment approach [5]. - The ETF's performance reflects a strategy to mitigate risks associated with investing in single metal sectors, making it suitable for inclusion in investment portfolios [5].

Core Viewpoint - The article suggests that the worst phase of the economic fundamentals may have passed, with expectations for a recovery in the U.S. economy and increasing inflationary pressures. Policy shifts are expected to support consumer and business confidence in the second half of the year, while global markets, particularly in Europe, are anticipated to continue their recovery [2][6][17]. Economic Fundamentals - The U.S. economy has faced negative policy shocks since the beginning of the year, disrupting the recovery initiated by the Federal Reserve's rate cuts last September. Private consumption contributed 0.31 and 0.98 percentage points to GDP in Q1 and Q2, respectively, compared to an expected 1.87 percentage points in 2024 [6][9]. - Manufacturing PMI in the U.S. has been declining since February, reflecting a broader global economic slowdown due to policy headwinds [6][9]. - The article anticipates that the economic fundamentals may improve in the second half of the year, driven by fiscal stimulus and a stable labor market, which could lead to a new wage growth cycle [14][15]. Policy Environment - The article notes a shift from policy headwinds to tailwinds, with tariff uncertainties diminishing and tax cuts being implemented. This is expected to boost consumer and business confidence in the latter half of the year [2][9]. - The U.S. Treasury is projected to issue approximately $1 trillion in net debt in Q3, which may tighten liquidity and suppress risk asset performance [2][20]. Inflation Outlook - Inflation in the U.S. is expected to rise as the low base effect ends and tariffs are implemented. The article predicts a noticeable acceleration in inflation trends in the second half of the year [15][20]. Global Market Dynamics - The article highlights that the weak dollar cycle is beneficial for emerging markets, particularly Hong Kong stocks. Historical trends show that improvements in fundamentals and currency appreciation positively impact risk asset performance [3][33]. - The article also discusses the potential for a global market recovery, with expectations for multiple markets to perform well rather than just the U.S. stock market [26][28]. Sector Analysis - The article expresses optimism for sectors such as manufacturing, military, energy, and infrastructure in the U.S. and Europe, which are expected to maintain high levels of activity and support resource prices like copper and aluminum [2][28]. - The financial sector is also seen as having investment value due to liquidity expansion and financial deregulation [28][40]. Currency and Asset Valuation - The anticipated depreciation of the dollar and the return of pending foreign exchange funds are expected to support the appreciation of the Chinese yuan [3][30]. - The article suggests that the weak dollar environment will favor growth-oriented stocks in both A-shares and Hong Kong markets, particularly in technology and materials sectors [33][49]. Bond Market Insights - The article notes that short-term market sentiment is currently driving bond market fluctuations, with a potential for increased volatility in the bond market due to strong performance in risk assets [50][56]. - It is expected that the long-term bond yields may trend upwards due to the issuance of new debt and economic recovery, but there remains potential for a downward adjustment in yields if the Federal Reserve resumes quantitative easing [56][58].