TF Securities: Jackson Hole Conference leans dovish, commodity prices rise

According to the Wisdom Financial APP, TF Securities released a research report stating that the U.S. retail sales data for July exceeded expectations, easing concerns about a weakening U.S. economy. Combined with the previous decline in inflation data and dovish comments from Federal Reserve officials, COMEX gold rebounded, and COMEX silver followed suit. After the Jackson Hole meeting, Powell's speech was overall dovish, further increasing the market's bet on a 50 basis point rate cut in September. With the weakening interest rate environment and the long-term value support for precious metals, gold and silver are unlikely to see significant declines. The Federal Reserve has great flexibility in whether to cut rates by 25 or 50 basis points, and the performance of these news will affect the market's judgment on the extent of the rate cut, leading to continued volatility in gold and silver prices.

Base Metals: Expectations of Fed rate cuts heat up, prices stabilize and rise. 1) Copper: The center of gravity of copper prices moved up this week, with Shanghai copper closing at 74,240 yuan/ton. On the macro side, overseas macro data was generally positive during the week, with the downward revision of U.S. non-farm data on Wednesday, coupled with expectations from the Fed meeting minutes forecasting the first rate cut in September, supported the price increase after the decline of the U.S. dollar index. After the Jackson Hole meeting, the market increased its bet on a 50 basis point rate cut in September. From a fundamental perspective, on the supply side, the continuous destocking performance of domestic inventories may continue next week, but the inflow of imported copper and recent weakening of consumption may affect the decline in inventories, with supply-side impacts still present. Inventories: This week, domestic electrolytic copper spot inventories in the market were 282,900 tons, with a slight narrowing of destocking mainly due to the relatively strong and volatile copper prices during the week and a decline in downstream procurement demand. 2) Aluminum: Shanghai aluminum prices rose overall this week, closing at 19,925 yuan/ton. On the macro side, Powell's speech at the Jackson Hole meeting was dovish, with a firm stance on rate cuts overseas. On the supply side, China's electrolytic aluminum industry continued to stabilize its operating capacity this week. On the demand side, aluminum rod companies resumed production this week, mainly concentrated in Guizhou, Henan, and Xinjiang. On the inventory side, LME aluminum inventories continued to decrease this week, with current LME aluminum inventories at 878,000 tons, a decrease of 18,300 tons from last week's 896,200 tons. In China, social aluminum ingot inventories continued to decline this week, with current inventories at 814,500 tons, a decrease of 16,800 tons from last week's 831,300 tons. Recommended stocks to watch: CHALCO, Aluminum Corporation of China, Luoyang Molybdenum, Zhijin Mining, Jin Chengxin, Minmetals Resources.

Precious Metals: Dovish comments from the Jackson Hole meeting lead to a rise in gold and silver prices. As of August 22nd, the average price of 99.95% gold in the domestic market was 571.88 yuan/gram, up 1.44% from last week, and the average price of Shanghai spot silver was 7,413 yuan/kg, up 4.57% from last week. The U.S. retail sales data for July exceeded expectations, easing concerns about a weakening U.S. economy. Combined with the previous decline in inflation data and dovish comments from Federal Reserve officials, COMEX gold rebounded, and COMEX silver followed suit. After the Jackson Hole meeting, Powell's speech was overall dovish, further increasing the market's bet on a 50 basis point rate cut in September. With the weakening interest rate environment and the long-term value support for precious metals, gold and silver are unlikely to see significant declines. Initial claims, PMI, and other data are still worth paying attention to. The Federal Reserve has great flexibility in whether to cut rates by 25 or 50 basis points, and the performance of these news will affect the market's judgment on the extent of the rate cut, leading to continued volatility in gold and silver prices Recommendations: Zijin Mining, Zhaojin Mining, Shandong Gold, Shandong Gold International, Chifeng Gold, Hunan Gold, Zhongjin Gold, China Gold International.

Minor Metals: Macro sentiment is strong, tin prices rebounded. This week, LME tin fluctuated with a bias towards strength. As of the close on August 21st, LME tin closed at $32,725 per ton, up $1,240 per ton compared to the same period last week, an increase of 3.94%. Overall, overseas macro sentiment was positive during the week, with the revision of US non-farm data on Wednesday and the Fed meeting minutes predicting the first rate cut in September, supporting tin prices after the US dollar fell. Following the Jackson Hole meeting, the market increased its bet on a 50bp rate cut in September, boosting tin prices. This week, domestic tin ingot prices rose. With weak fundamentals in supply and demand, domestic raw material shortages gradually transmitted to slight reductions in smelting production. As tin prices rose during the week, downstream demand mainly focused on consuming previously replenished inventories, resulting in weak transactions. It is estimated that tin prices will fluctuate in the short term under the influence of macro sentiment, with an overall bias towards strong and oscillating operation. Recommendations: Yunnan Tin, Xingye Bank Tin, Huaxi Nonferrous Metals.

Rare Earth Permanent Magnets: Continued recovery in demand + accelerated realization of supply-side benefits, rare earth prices remain stable with a bias towards strength. This week, praseodymium-neodymium oxide rose to 393,000 RMB/ton; medium and heavy rare earths performed well, with dysprosium oxide closing at 1.76 million RMB/ton and terbium oxide at 5.5 million RMB/ton. The second batch of rare earth indicators was released this week, with total control indicators for mining and smelting separation set at 135,000 tons and 127,000 tons respectively. Compared to the total indicators in the second half of last year, there was no growth in the second batch of indicators, accelerating the realization of supply-side benefits. From the demand side, end-user orders increased, magnetic material companies' orders gradually improved, the off-season market ended early, and demand support gradually became apparent. Currently, the supply and demand fundamentals of the rare earth sector are improving, industry confidence continues to be boosted, market sentiment is gradually strengthening, and it may continue to support strong rare earth prices. Recommendations: Northern Rare Earth, China Rare Earth, Zhonghai Magnetic Materials.

Risk Warning: Risks of demand recovery falling short of expectations, risks of significant increase in upstream supply, risks of substantial increase in inventories