Zhongtai Securities: The changing factors are cumulatively awaiting the September FOMC license inspection recommendations to focus on precious metals and copper and aluminum, which are highly affected by supply in the Middle East

The Zhitong Finance App learned that the market's pricing for the length of the conflict period was still biased; at the interest rate level, interest rates on US bonds of various maturities continued to be high, with the 30-year term breaking through the 2008 financial crisis level, and the risk of US debt should not be underestimated; at the commodity level, the reputation and independence of the Federal Reserve continued to be damaged, and the financial attributes of various commodities blossomed one after another. Although actual market fluctuations may still be suppressed before the September FOMC, undercurrent surges beneath the surface. There will be no venue for next week's meeting results, but from the perspective of dealing with medium- to long-term uncertainty, it is recommended to focus on precious metals, as well as copper and aluminum, which are highly affected by supply in the Middle East.

The main views of Zhongtai Securities are as follows:

Core view: The factors of change are accumulating, awaiting FOMC certification in September. Behind the current market turbulence, various factors of change are accumulating. Geographically, the military clash between the US and Iran continued on September 5. The US military said it attacked 3 Iranian oil tankers that day. In response to Iran's attacks on a number of oil tankers and American ships. As military operations between the two sides continue and there is no solution to the Strait of Hormuz issue for the time being, the regional situation will remain volatile for a short period of time, and the market is still biased in pricing the length of the conflict. At the interest rate level, the most noteworthy event in the market last week was not employment data that exceeded expectations, but the complete collapse of the global bond market. In addition to US bonds, yields on Japanese, German, French, and Italian bonds soared to 20-year highs, becoming the biggest threat to the AI capital expenditure boom. At the commodity level, the Federal Reserve's credibility and independence continue to be damaged, and the financial attributes of various commodities are blooming one after another. Although actual market fluctuations may still be suppressed before the September FOMC, undercurrent surges beneath the surface. There will be no venue for next week's meeting results, but from the perspective of dealing with medium- to long-term uncertainty, it is recommended to focus on precious metals, as a hedging tool against inflation and geopolitical risks, as well as copper and aluminum, which are highly affected by supply in the Middle East.

Gold: Gold stocks may rebound with the price of gold. It is recommended to pay attention to dips. On August 22, Federal Reserve Chairman Walsh delivered a speech at the Jackson Hole conference, stressing the need to see potential inflation move closer to 2% “clearly and quickly enough.” Market concerns about the September rate hike rose again, and the price of gold recovered. COMEX gold closed at 4477.2 US dollars/ounce last week, a slight decrease of 0.6% from week to week. In the short term, gold stocks may follow a correction in gold prices. However, the fall in interest rates on long-term US bonds does not depend on the FOMC; it depends on whether global capital is willing or unwilling to return to US debt. This is far beyond the scope of the Federal Reserve's ability. If the US does not change its current expansionary fiscal path, the structural pressure on long-term bond interest rates will not subside due to several interest rate cuts or interest rate hikes. Investors are advised to pay attention to the precious metals sector, which is the opposite of US dollar credit, on dips.

Copper: The US is once again “grabbing copper,” and global copper supply and demand are expected to maintain a tight pattern in the medium term. The US Department of Commerce originally planned to submit the latest copper market assessment report by June 30 to suggest whether the US will levy import tariffs on refined copper. The market anticipates that the US may decide to levy a 15% tariff on refined copper in stages starting in 2027 and then increasing it to 30% in 2028. Affected by this, the price difference between COMEX and LME copper has continued to widen since May of this year. The price of the former was once about 400 US dollars/ton, reaching a high of 500 US dollars. On May 22 alone, LME removed more than 50,000 tons of copper from warehouses and shipped to the US, making it the largest centralized pickup since 2013. Against the backdrop of the continued differentiation of US and world copper inventories, Zhongtai Securities believes that global copper supply and demand is expected to maintain a tight pattern in the medium term, and suggests continuing to pay attention to investment opportunities for mineral copper companies.

Aluminum: The removal of the social treasury confirms the supply and demand pattern, and companies with high dividends strengthen dividend defense. After the resurgence of the US-Iran conflict, in addition to rising uncertainty about the prospects for navigation through the straits, uncertainty also increased on the supply of electrolytic aluminum in the Middle East region, which accounts for 9% of global supply. For the global electrolytic aluminum industry, the period of expansion of the overseas supply gap may be further extended, and the supply and demand pattern of the industry may remain scarce in the medium term. However, the result of the decline in overseas aluminum supply is directly reflected in the further increase in domestic aluminum exports in May, and the continuing decline of traditional demand in the social reserves of electrolytic aluminum to 1.0707 million tons during the low season in July. On the other hand, a further rise in crude oil prices means that overseas energy prices are gradually being determined at a low level. The bottom of the commodity price of electrolytic aluminum, which is the physical carrier of electricity, is also expected to gradually be determined. Major electrolytic aluminum companies that have completed “deleveraging” since the beginning of this year all currently have high dividend rates. For institutional investors who must stay on the market, it is recommended to actively deploy electrolytic aluminum sector defenses.

Risk warning: macroeconomic growth slows; tariffs affect demand and industrial chain stability; raw material prices fluctuate; changes in Sino-US relations; distorted third-party data; untimely data updates.