GF Securities: Gold is expected to continue to hit new highs in August, while base metals are expected to stop falling and rebound

According to the information from the Wisdom Financial APP, GF Securities released a research report stating that the global actual demand for basic metals in July remains weak, with reinforced recession expectations leading to a decline in basic metal prices. The key focus in August is on the bottoming out of demand expectations: first, the policy of replacing old cars and home appliances supports domestic demand. Second, under the impact of overseas recession expectations, changes in the Fed's interest rate cut expectations. As for precious metals, the Fed maintained interest rates unchanged at the July meeting and hinted at a possible rate cut in September. Combined with the recent tense labor market in the United States and inflation data still in a moderate slowdown channel, the market's expectation of the Fed's imminent rate cut cycle is sufficient, and the monetary and financial attributes will continue to push gold prices to fluctuate upwards.

Key points from GF Securities:

Basic Metals: Expected recession expectations fully reflected, basic metal prices are expected to stabilize and rise

The global actual demand for basic metals in July remains weak, with reinforced recession expectations leading to a decline in basic metal prices. The key focus in August is on the bottoming out of demand expectations: first, the policy of replacing old cars and home appliances supports domestic demand. Second, under the impact of overseas recession expectations, changes in the Fed's interest rate cut expectations. Recommended stocks to watch: Luoyang Molybdenum (603993.SH,03993), Western Mining (601168.SH), Jin Chengxin (603979.SH), Aluminum Corporation of China (601600.SH,02600), China Hongqiao (01378), Yun Aluminum (000807.SZ), Tianshan Aluminum (002532.SZ), etc.

Steel: Supply and demand both declined in July, steel prices expected to fluctuate

On the supply side, steel mill profit margins dropped significantly in July, and low profit margins are expected to promote active production cuts. On the demand side, equipment upgrades and the policy of replacing old with new are expected to improve the demand for manufacturing sheet metal. On the cost side, limited increase in pig iron production suppresses the upward cost space. In terms of prices, steel prices are expected to fluctuate in August. Recommended stocks to watch: Baosteel (600019.SH), Hualing Steel (000932.SZ), Jiuli Special Material (002318.SZ), Yongjin Group (603995.SH), etc.

Precious Metals: Expectation of US interest rate cut sufficient, gold prices may continue to fluctuate upwards

According to Wind, the US unemployment rate in July exceeded expectations and the previous value, non-farm payroll employment was lower than expected and the previous value, highlighting pressure on the US job market. The Fed maintained interest rates unchanged at the July meeting and hinted at a possible rate cut in September. Combined with the recent tense labor market in the United States and inflation data still in a moderate slowdown channel, the market's expectation of the Fed's imminent rate cut cycle is sufficient. According to CME (August 3rd), the probability of the Fed lowering the federal funds target rate by 25BP to 5.00%-5.25% in September is 78%, and the probability of lowering by 50BP to 4.75%-5.00% has increased to 22%. The monetary and financial attributes will continue to push gold prices to fluctuate upwards. Recommended stocks to watch: Chifeng Gold (600988.SH), Zhaojin Mining (01818), Shandong Gold (600547.SH,01787), Zhongjin Gold (600489.SH), Yintai Gold, etc Energy Metals: Oversupply Expectations Remain Unchanged, Lithium Prices May Still Experience Slight Downward Fluctuations

The market expects an oversupply of lithium carbonate, with downstream pressure on prices due to low-price inquiries. While there is strong willingness to maintain prices upstream, the expectation of increased production capacity at the mining end and disruptions caused by tariff policies in Europe and the United States indicate that there is still room for lithium carbonate prices to decline, with the possibility of continuing to experience slight downward fluctuations. Recommended stocks to watch: Shengxin Lithium Energy (002240.SZ), Huayou Cobalt (603799.SH), etc.

Minor Metals: Tungsten and Molybdenum Prices Decline, Price Stability Expected in August

The rare earth permanent magnet industry chain has completed destocking, with a slight rebound in rare earth prices in July after hitting the bottom, showing potential for upward fluctuations in the future. Tungsten prices significantly fell in July, benefiting from the release of future demand, and it is expected that tungsten prices will remain stable in August. Molybdenum prices slightly decreased in July, with stable steel recruitment demand, slow destocking at the end of the month, and the industry chain's supply-demand situation awaiting optimization, indicating that molybdenum prices are expected to fluctuate in August. Recommended stocks to watch: Jinmoly Shares (601958.SH), Shenghe Resources (600392.SH), Northern Rare Earth (600111.SH), Xiamen Tungsten (600549.SH), etc.

Risk Warning: Macroeconomic recovery falls short of expectations; downstream metal demand falls short of expectations; mining supply growth exceeds expectations; Federal Reserve interest rate cuts fall short of expectations; downstream demand in sectors such as defense falls short of expectations; iron ore, coking coal, and coke production levels fall short of expectations; crude steel production cuts fall short of expectations