--- title: "CITIC Construction Investment: Dollar credit repricing, gold leads non-ferrous metals to surge" type: "News" locale: "en" url: "https://longbridge.com/en/news/296716720.md" description: "CITIC Construction Investment's research report points out that the U.S. Treasury's intervention in long-term U.S. Treasury bonds has raised market concerns about the creditworthiness of the dollar and fiscal sustainability, driving gold prices sharply higher. At the same time, the end of the LME copper squeeze but tight inventories support copper prices, and with expectations of an interest rate cut cycle and demand growth, the outlook for industrial metals is optimistic" datetime: "2026-08-24T00:30:02.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/296716720.md) - [en](https://longbridge.com/en/news/296716720.md) - [zh-HK](https://longbridge.com/zh-HK/news/296716720.md) generator: "portal-rs" --- # CITIC Construction Investment: Dollar credit repricing, gold leads non-ferrous metals to surge According to the Zhitong Finance APP, CITIC Construction Investment has released a research report stating that this week, the U.S. Treasury intervened in the long-end U.S. Treasury bonds, sparking market enthusiasm for gold. Although the Federal Reserve's minutes this week were hawkish, the Treasury's constraints on long-end interest rates led the market to shift towards concerns about the creditworthiness of the U.S. dollar and the sustainability of U.S. finances, resulting in a strong surge in gold prices, with gold stocks following suit. This week, the LME copper squeeze announced the end of this round of squeeze as the delivery progressed, but the LME still maintained a backwardation structure, highlighting the current tight inventory situation, and copper prices retained the momentum to refresh historical price highs. Additionally, copper equities priced at just over 10 times the copper price of 100,000 provide excellent odds. **CITIC Construction Investment's main viewpoints are as follows:** Industrial Metals: This week, the price changes for LME copper, aluminum, lead, zinc, and tin were 0.1%, -0.1%, 0.3%, 1.6%, and 0.1%, respectively; the prices of industrial metals are determined by both "financial attributes" and "commodity attributes." From a financial perspective, the Federal Reserve has entered a rate-cutting cycle; from a commodity perspective, global copper and aluminum inventories are at relatively low levels, and the recovery of the Chinese economy is expected, coupled with the boost from the new energy sector, leading to an improvement in copper and aluminum demand. **Repricing of U.S. dollar credit, gold leads non-ferrous metals higher** **(1) Gold: Repricing of U.S. dollar credit leads to a strong surge in gold.** After the Treasury raised the repurchase limit this week, long-end interest rates fell, and the dollar weakened, driving gold prices up. The core behind this is the market's repricing of the weakening U.S. dollar credit. Although the Federal Reserve's meeting minutes this week were hawkish, this negative sentiment was overshadowed by the market reconstruction driven by the Treasury, indicating that after the Treasury constrained the rise in long-end interest rates, the suppression of real interest rates on gold has weakened, and the market has begun to trade on concerns about U.S. dollar credit and the sustainability of U.S. finances. In the medium to long term, under the backdrop of high U.S. debt, global reserve diversification, and the long-term trend of central banks continuously purchasing gold, the sovereign credit hedging property of gold is continuously strengthening, establishing a solid upward trend; in the short term, long-end U.S. Treasury rates are unlikely to rise, expectations for Federal Reserve rate hikes are weakening, and gold ETFs continue to increase their holdings, making the overall outlook for gold optimistic. However, after the current price increase, caution is needed for profit-taking and high-level volatility, and it is essential to continuously track the Federal Reserve's policy direction, with the Jackson Hole Global Central Bank Annual Meeting at the end of the month likely being a key observation point for short-term gold price trends. **(2) Copper: Failed squeeze does not hinder copper prices from maintaining strength.** Before Wednesday this week, the LME copper squeeze was gradually improving, with spot copper trading at a premium of up to $436/ton over three-month copper. However, the continuous delivery of LME copper inventory announced the failure of this round of squeeze. The institution wants to emphasize that the failure of the squeeze does not indicate a problem with the strong copper price's underlying support. On one hand, the Comex-LME price spread remains at $200-$300/ton, highlighting the market's bet on President Biden's announcement of additional tariffs on copper, and the existence of the C-L price spread continues to attract arbitrage behavior moving goods to the U.S., with non-U.S. regional inventories still expected to decline, keeping the spot market tight, and the LME spot copper premium over three-month copper remaining above $60/ton even after the squeeze failure. The result of near-month contracts being higher than far-month contracts highlights a severe inventory shortage, which is very favorable for strong commodity prices, and the current copper price is just a step away from the historical high of $14,527.5/ton, with strong momentum to break through the high point The global copper mine increment this year once again falls short of expectations, with global refined copper in a state of overall shortage. Coupled with localized tensions caused by U.S. inventory movements, copper prices remain strong. In contrast, copper equities have been persistently undervalued relative to copper prices this year, providing good odds for newly entered positions. **Risk Warning:** 1. A significant global economic recession leading to a cliff-like decline in consumption. The World Bank has raised its global economic growth forecast for 2026 from the previous 2.3% to 2.6% in its latest "Global Economic Outlook," but economic growth has shown a slowing trend in recent years. If the global economy falls into a deep recession, it will have a huge impact on the consumption of non-ferrous metals. 2. U.S. inflation spiraling out of control, with the Federal Reserve tightening monetary policy beyond expectations, and a strong dollar suppressing equity asset prices. If the U.S. cannot effectively control inflation and continues to raise interest rates, it will be detrimental to non-ferrous metals priced in dollars. The Federal Reserve has already implemented significant consecutive interest rate hikes, but services, especially rents and wages, remain sticky, constraining the decline in inflation. If the Federal Reserve maintains high-intensity rate hikes, it will be unfavorable for non-ferrous metals. 3. Domestic new energy sector consumption growth is below expectations, and the real estate sector continues to be sluggish. Although policies on the real estate sales side have been relaxed to varying degrees, residents' willingness to purchase remains insufficient, and the progress in resolving the debt risks of real estate companies is not smooth. If sales continue to show no improvement, the completion of real estate projects may face a risk of stalling, which would be unfavorable for the consumption of certain non-ferrous metals in the domestic market ### Related Stocks - [GLDM.US](https://longbridge.com/en/quote/GLDM.US.md) - [UUP.US](https://longbridge.com/en/quote/UUP.US.md) - [UGL.US](https://longbridge.com/en/quote/UGL.US.md) - [DBB.US](https://longbridge.com/en/quote/DBB.US.md) - [SGOL.US](https://longbridge.com/en/quote/SGOL.US.md) - [GLD.US](https://longbridge.com/en/quote/GLD.US.md) - [GLDW.US](https://longbridge.com/en/quote/GLDW.US.md) - [516650.CN](https://longbridge.com/en/quote/516650.CN.md) - [518850.CN](https://longbridge.com/en/quote/518850.CN.md) - [159876.CN](https://longbridge.com/en/quote/159876.CN.md) - [159880.CN](https://longbridge.com/en/quote/159880.CN.md) - [159608.CN](https://longbridge.com/en/quote/159608.CN.md) - [GOLD.AU](https://longbridge.com/en/quote/GOLD.AU.md) - [GLDI.US](https://longbridge.com/en/quote/GLDI.US.md) - [IAU.US](https://longbridge.com/en/quote/IAU.US.md) - [GLL.US](https://longbridge.com/en/quote/GLL.US.md) - [159881.CN](https://longbridge.com/en/quote/159881.CN.md) - [512400.CN](https://longbridge.com/en/quote/512400.CN.md) - [159871.CN](https://longbridge.com/en/quote/159871.CN.md) - [561330.CN](https://longbridge.com/en/quote/561330.CN.md) - [DULL.US](https://longbridge.com/en/quote/DULL.US.md) - [SHNY.US](https://longbridge.com/en/quote/SHNY.US.md) ## Related News & Research - [Why is your gold waiting on a speech?](https://longbridge.com/en/news/296733808.md) - [METALS-Copper recovers from early losses while closing higher in Shanghai, despite rising inventories](https://longbridge.com/en/news/296754394.md) - [METALS-Copper gains but set to snap seven-week winning streak](https://longbridge.com/en/news/296565933.md) - [PRECIOUS-Gold holds steady with Fed minutes in focus](https://longbridge.com/en/news/296310600.md) - [METALS-Copper prices hit 6-month peak on low inventories](https://longbridge.com/en/news/296086595.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**