According to the Securities Times APP, Zhongyou Securities released a research report stating that the current market is still trading the soft landing of the US economy, with inflation expectations rebounding and gold and silver prices rising simultaneously. Zhongyou Securities believes that in the long term, the increase in the US deficit, geopolitical disturbances combined with the near-shoring of the US supply chain leading to unchanged central bank gold purchases logic. Short-term interest rate cut trading is basically over. If inflation expectations decline too rapidly, it is expected that gold will also experience a certain amount of volatility, with upward movements likely to be choppy rather than smooth sailing. Expectations of a soft landing suggest a rise in copper prices, with risks of expectation reversal during the National Day holiday; short-term repair possibilities exist for lithium, with medium-term pressure still present; the uranium supply and demand structure is favorable, and physical investment funds may re-enter the market.

Precious metals: Expectations of a soft landing increase, with gold and silver rising simultaneously. Last week, the market was still trading the soft landing of the US economy, with inflation expectations rebounding and gold and silver prices rising simultaneously. In the end, last week COMEX gold rose by 1.27%, silver rose by 1.33%. Zhongyou Securities believes that in the long term, the increase in the US deficit, geopolitical disturbances combined with the near-shoring of the US supply chain leading to unchanged central bank gold purchases logic. With a short-term view: interest rate cut trading is basically over, but future attention needs to be paid to the situation of US economic data. If inflation expectations decline too rapidly, it is expected that gold will also experience a certain amount of volatility, with upward movements likely to be choppy rather than smooth sailing, while continuing to have a positive view on the gold-to-silver ratio.

Aluminum: Positive macro expectations, with stable growth expectations becoming the market's main theme. Last week, aluminum prices rose by 5.91% to over 0.02 million yuan/ton, as primary aluminum continues to destock, mainly due to a combination of domestic fiscal and monetary policies, creating good market expectations for the future. On the supply side, overseas supply tensions for alumina are difficult to resolve in the short term, with multiple accidents causing market concerns to surface. Additionally, maintenance events at several alumina plants domestically have reduced supply compared to the previous period, while news of the gradual resumption of production at electrolytic aluminum plants in Guizhou is emerging. Overall, the supply side remains relatively tight; downstream aluminum processing leading enterprises' operating rates increased by 0.3 percentage points to 63.8% last week, up by 0.5 percentage points compared to the same period last year. Looking at different sectors, the profile and recycled alloy sectors saw a slight increase in operating rates driven by improved orders, while other sectors maintained stable operations.

Copper: Expectation of a soft landing suggests a rise in copper prices, with risks of expectation reversal during the National Day holiday. Last week, LME copper prices rose by 5.14%, as expectations of a strong economic recovery in China following a shift in economic policy, combined with relatively stable overseas markets, resulted in a significant increase in copper prices. The current market focus has shifted to the US non-farm and PMI data during the National Day holiday, with bears possibly waiting for weaker non-farm data to strike back opportunistically. The main variable that will influence future copper price trends is the inflation expectation of the US economy. If a recession occurs too quickly, even with ample interest rate cut expectations, it may still be more harmful than beneficial for copper prices, and the upward cycle for copper prices may have to wait some time after the actual Fed interest rate cut. Historically, slowly decreasing interest rate expectations may struggle to swiftly boost inflation expectations.

Lithium: Short-term possibilities for recovery exist, with medium-term pressures still present. The spot price of lithium carbonate remains around 0.075 million, but the futures price currently rebounded to over 0.08 million, reflecting the market's optimism for future recovery. However, Zhongyou Securities believes that the limited nature of the recovery in futures prices, firstly due to the cost of lithium mica mines owned by Contemporary Amperex Technology with an expected shutdown cost of around 0.09 million, creates some pressure. Secondly, with the rebound of lithium carbonate prices to over 0.09 million, external smelting plants are expected to actively enter the market for short selling, creating pressure. In a situation where the supply-demand structure still remains poor, it is not advisable to make overly optimistic judgments.

Uranium: The supply and demand situation is favorable, with physical investment funds potentially re-entering the market. Last week, uranium prices resumed an upward trend but remained at an annual low, with strong support at lower prices. On the supply and demand side, the resumption of operations at the Haoraan plant has been delayed, with limited overall incremental supply. The reopening of the Three Mile Island nuclear plant in the USA for AI servers, along with strengthened support for nuclear power, may catalyze nuclear power demand in the second half of the year. Additionally, physical investment funds have not significantly increased holdings for two consecutive years. With reduced financing costs during the interest rate reduction cycle, a restart of the purchasing trend may be on the horizon.

Investment advice

Recommend focusing on Zhongjin Gold Corp., Ltd. (600489.SH), Zijin Mining Group (601899.SH/02899), Inner mongolia xingye silver&tin mining (000426.SZ), Yunnan Tin Co.,Ltd. (000960.SZ), Lizhong Sitong Light Alloys Group (300428.SZ), CGN Mining (01164).

Risk warning:

Macro-economic large fluctuations, demand lower than expected, supply release exceeding expectations, company project progress slower than expected.