Geopolitical tensions ease, gold returns above $4,600, non-ferrous metals sector rebounds strongly! CMF Non-ferrous Mining ETF (159690) rises over 4%!

On March 25, as signs of easing geopolitical tensions emerged, crude oil prices plummeted, while gold and silver rebounded. As of the time of writing, ICE Brent crude fell nearly 6%, spot gold rose 2.8%, briefly surpassing the $4,600 mark during the session, and spot silver increased over 4%.

In the secondary market, non-ferrous metal stocks rebounded strongly, with gains led by Industrial Bank Silver Tin, Yunnan Germanium, Hunan Silver, China Gold, and Chifeng Gold. The Non-Ferrous Mining ETF (159690) rose 4.21%.

On the news front, the U.S. government proposed a conflict resolution plan with Iran containing 15 conditions. The U.S. is considering pushing for a one-month ceasefire and negotiating based on these terms.

CITIC Securities believes that after the Middle East geopolitical event concludes, gold is expected to hit new highs again. Historically, after conflicts in the Middle East, the medium-term trend of gold prices still depends on the dollar’s credibility and liquidity factors. Looking ahead at this round of conflict, the continuation of loose liquidity and weakening dollar credibility are expected to further boost gold prices. Additionally, valuation or stock price percentile advantages historically strengthen the upside potential of the gold sector.

Regarding allocation, Industrial Securities points out that preferred non-ferrous metals are gold, lithium, and tin. The gold sector has short-term potential for a rebound, and lithium carbonate benefits from narratives of energy independence and control. Concerns about demand for copper and aluminum require conflict de-escalation or a shift in monetary policy. Currently, the risk appetite for small metals is high, but from a medium- to long-term anti-globalization perspective, tungsten, chromium, molybdenum, rhenium, tin, indium, and rare earths hold strategic value and potential for bargaining (domestic and international policies may change later).

The Non-Ferrous Mining ETF (159690), tracking the non-ferrous mining index, focuses heavily on the upstream segment of the non-ferrous metal industry—mineral resource extraction. As of February 27, the index’s weights for copper, gold, rare earths, and aluminum reached 65% (based on Shenwan’s tertiary industry classification). Most recently, the non-ferrous metal mining index has increased by 82.62% over the past year, outperforming mainstream non-ferrous indices.

(Edited by: Zhang Xiaobo)

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