Northeast Securities: Gold price hits a new historical high, copper price continues to rebound

According to the Wise Finance APP, Northeast Securities released a research report stating that overall, the main theme in the first half of the year was the reversal of interest rate cut trades. In the second half of the year, interest rate cuts are gradually approaching, and the main theme may switch to the reversal of recession trades. Recent fund disturbances and the repeated trading rhythm have not changed the mid-term bullish trend of gold prices. In the long term, against the backdrop of global currency depreciation, geopolitical conflicts, and increased economic uncertainty, the value of gold price allocation is highlighted, and the bullish view on gold prices and the gold sector continues. In addition, there is fundamental support, with recession concerns driving the rebound in copper prices, emphasizing the value of equity allocation.

Gold: Inflation continues to decline + Fed's expectation management before interest rate cuts, gold prices hit a new historical high again. This Friday, the closing price of London Gold was $2506.84 per ounce, with a weekly increase of 3.1%, hitting a new historical high again. 1) US CPI continues to decline: US CPI in July was 2.9% year-on-year, with an expectation of 3% and a previous value of 3%; core CPI in July was 3.2% year-on-year, with an expectation of 3.2% and a previous value of 3.3%. Structurally, ① core goods inflation month-on-month decreased to -0.1% and continued to -0.3% year-on-year, mainly dragged down by the decline in used car prices, expected to remain low in the future; ② housing inflation rebounded from 0.2% month-on-month to 0.4%, which was low in June and returned to normal in July, while year-on-year decreased further from 5.2% to 5.1%; ③ core services inflation also rebounded slightly, mainly due to the month-on-month increase in car insurance from 0.9% to 1.2%, but health insurance decreased from 0.1% to -0.4% (these two items have the greatest impact on core services inflation and are both lagging indicators). Overall, US inflation in July is still in a downward trend, with data further pointing to a 50bp rate cut by the Fed in September. However, due to the strong service inflation, it has to some extent eased market recession expectations. After the CPI data was released, the market shifted from expecting a 50bp rate cut in September to 25bp. 2) Fed officials are starting to manage expectations for a rate cut in September: Hawkish official Bostic maintained a "hope to see more data before the rate cut" neutral stance on August 14. After the CPI data was released, on August 15, he adjusted his wording to "monetary policy easing cannot be delayed, and he is open to a rate cut in September." Gulsby also stated on August 15 that "the current interest rate level is very restrictive, and he is increasingly concerned about employment risks rather than inflation." Mousalem stated on August 15 that "inflation and employment risks are more balanced, and the opportunity for a moderate rate cut is coming soon." Overall, after the CPI data was released, Fed officials have started to communicate about a rate cut in September. Of course, the most crucial point is Powell's final decision at the Jackson Hole meeting on August 23 (the most important window for expectation management before the September FOMC meeting). Overall, the main theme in the first half of the year was the reversal of interest rate cut trades. In the second half of the year, interest rate cuts are gradually approaching, and the main theme may switch to the reversal of recession trades. Recent fund disturbances and the repeated trading rhythm have not changed the mid-term bullish trend of gold prices. In the long term, against the backdrop of global currency depreciation, geopolitical conflicts, and increased economic uncertainty, the value of gold price allocation is highlighted, and the bullish view on gold prices and the gold sector continues. Related targets: Zijin Mining, Shandong Gold, Yintai Gold, Chifeng Gold, Hunan Gold, Zhongjin Gold, Western Gold, Zhaojin Mining, Hengbang Shares, Pengxin Resources, etc. Copper: Fundamental support, recession concerns trigger copper price rebound, emphasizing the value of equity allocation. 1) Copper price rebounded slightly this week: The strike at the world's largest copper mine, Escondida, provided bullish support this week, and the US July CPI data eased recession expectations, with LME copper rebounding by 4.35% to $9,177.5 per ton. 2) Fundamental support, macro factors marginally pricing copper: On the fundamental side, demand is improving, downstream buying momentum is significant, and operating rates are gradually increasing; the tight supply situation on the supply side has not changed, and the supply pressure from reduced scrap copper will gradually transmit to refined copper. On the macro level, the impact of the US election on copper prices remains uncertain, with short-term trading logic driven mainly by macro events, while a reversal of recession sentiment could trigger a copper price rebound. 3) Facing uncertainty in commodities, focus on the value of equity allocation: Under the assumption of a soft landing, the central point of copper prices is unlikely to decline significantly, the long-term bullish logic remains unchanged, and under uncertainty, it is important to focus on the value of equity allocation. Related targets: Zijin Mining, Luoyang Molybdenum, Western Mining, Jiangxi Copper, Jin Chengxin, Tongling Nonferrous, Northern Copper, Minmetals Resources, etc.

Risk warning: US inflation continues to exceed expectations, global monetary tightening exceeds expectations, US dollar appreciation