Spot gold prices climbed above $4,700 per ounce on April 1, following conciliatory remarks from both the United States and Iran regarding their conflict. The Huabao Fund Nonferrous Metals ETF (159876), which provides broad exposure to leading companies in gold, rare earths, copper, aluminum, and other nonferrous metals, saw its intraday price rise by 1.65%. As of the latest update, the ETF recorded a net subscription of 7.8 million units and attracted 9.32 million yuan in net inflows the previous day, indicating strong investor confidence in the sector's prospects and active positioning.
Among the ETF's component stocks, China Molybdenum led gains with an increase of over 4%. Chifeng Jilong Gold Mining, Baowu Magnesium Technology, Zijin Mining Group, Western Region Gold, and Shandong Gold Mining International all rose more than 3%. Jiangxi Copper, Yunnan Germanium, China Rare Metals & Rare Earth, and Zhongjin Gold also advanced.
Market sentiment was buoyed by signals of potential de-escalation between the US and Iran. Former US President Donald Trump indicated that the Iran conflict could conclude within two to three weeks, while Iranian President Pezeshkian expressed willingness to end hostilities, provided certain conditions are met, including guarantees against future aggression. These developments spurred a global equity rally and boosted precious metals, with the VIX volatility index dropping over 17%.
Analysts suggest that panic selling in gold may have subsided, with bargain-hunting and continued central bank acquisitions providing support. The long-term bullish fundamentals for gold remain intact, supported by strong demand from central banks in emerging markets such as Guatemala, Indonesia, and Malaysia, which have recently resumed or initiated gold reserve purchases.
Looking ahead, Huatai Securities highlights rebound opportunities in the oversold nonferrous metals sector. For gold, historical trends indicate quick recoveries post-geopolitical tensions, bolstered by ongoing central bank demand. Industrial metals like copper face tight supply and declining inventories, while aluminum prices have yet to fully account for production risks in the Middle East. Strategic metals, including rare earths, tungsten, molybdenum, and cobalt, are expected to benefit from geopolitical catalysts and anticipated stockpiling for military and strategic reserves.
The Huabao Nonferrous Metals ETF (159876) and its linked funds (Class A: 017140, Class C: 017141) track an index covering copper, aluminum, gold, rare earths, lithium, and other sectors, capturing diverse cycles in precious metals, strategic metals, and industrial metals. The ETF is also a margin trading security, offering an efficient tool for gaining exposure to the nonferrous metals sector.
As of the end of February, the ETF had assets under management of 2.427 billion yuan, with average daily turnover exceeding 100 million yuan over the past month, ranking it first in both size and liquidity among three ETFs tracking the same index.
Note: The Huabao Nonferrous Metals ETF (159876) was previously known as the Nonferrous Metals Leaders ETF.
Investors are reminded that recent market volatility may be significant, and short-term performance does not guarantee future results. It is essential to invest prudently based on individual financial circumstances and risk tolerance, with careful attention to position sizing and risk management.
The Huabao Nonferrous Metals ETF passively tracks the CSI Nonferrous Metals Index, which has a base date of December 31, 2013, and was launched on July 13, 2015. The index composition is adjusted according to its methodology, and past performance does not indicate future results. Component stock mentions are for illustrative purposes only and do not constitute investment advice or reflect the fund manager's holdings. The fund is rated R3-medium risk, suitable for investors with a balanced (C3) or higher risk profile. Investment decisions should be made independently, and no liability is accepted for losses resulting from the use of this information.
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