Following several months of consolidation, gold has regained the spotlight among global investors. International bullion prices have reversed their decline, with particularly robust momentum observed since August. Concurrently, copper futures have recently achieved record highs. Is gold poised to resume its upward trajectory? How sustainable is the current market move? Beyond gold, which other precious metals and non-ferrous resource sectors warrant attention? Here is an analysis from Chen Ziyang, fund manager of the Great Wall Resources Select Fund.
The international gold price has rebounded over 10% since late June. What are the primary drivers behind this recent rally? Chen Ziyang: Firstly, the most direct catalyst is the unexpected weakness in US employment data. The earlier decline in gold was largely due to the market pricing in expectations of three Federal Reserve rate hikes within the year. However, July's non-farm payrolls surprisingly decreased by 23,000, significantly missing expectations, and CPI figures are also trending downward. This has cooled market expectations for Fed tightening, thereby pushing gold prices higher. Secondly, signs of de-escalation in the Middle East have increased downward pressure on oil prices. Previous market concerns that Middle East conflicts would spike oil prices and force the Fed to maintain a tight policy have eased, particularly with recent progress on navigation issues in the Strait of Hormuz. This has alleviated energy inflation worries and opened room for gold's valuation recovery.
After the correction over the past few months, is gold likely to resume its upward trend? What is the sustainability of this market move?
Chen Ziyang: Based on current data, the US economy is showing signs of cooling, increasing the probability that gold will stabilize after its rebound. However, whether it can advance further will depend on the evolution of subsequent US economic indicators.
From a medium-to-long-term perspective, what is gold's allocation value? At what stage is the current gold price?
Chen Ziyang: In the long run, the lack of an effective solution to the US debt problem keeps dollar credit concerns at the forefront for markets. In this context, gold, serving as a hedge against dollar credit risk, holds long-term allocation value. Central bank purchases also provide solid structural support—global central banks purchased 289 tons of gold net in Q2 2026, and the People's Bank of China has increased its gold reserves for 21 consecutive months. At around $4,000 per ounce, gold currently presents a favorable allocation zone from a long-term perspective.
Is the foundation supporting gold's rise to new levels solid? What potential risks could interrupt the upward trend?
Chen Ziyang: Objectively speaking, the current move should be defined as a rebound. Investment in the AI sector remains robust, providing significant support to the US economy, making it difficult to conclude that the US economy will experience a sharp downturn. Regarding potential risks, a substantial rebound in oil prices needs monitoring. If oil prices surge again due to geopolitical conflicts or OPEC+ production cuts, it could fuel imported inflation, forcing the Fed to maintain high rates or even resume hikes, thereby capping gold's upside potential.
Beyond gold, which other precious metals and non-ferrous resource sectors deserve attention? Please briefly explain.
Chen Ziyang: Apart from gold, copper and certain minor metals may offer good investment value. The core thesis for copper lies in a tight supply-demand balance: on the supply side, new global copper mine capacity is limited, with major producing countries experiencing persistent supply disruptions, resulting in weak overall supply elasticity. On the demand side, traditional sectors like power grids and home appliances remain steady, AI data centers are emerging as a significant new demand driver, and continued growth in new energy vehicles and wind/solar installations further bolster demand from multiple fronts. This mismatch between rigid supply and growing demand supports strong copper prices. Among minor metals, tungsten, tin, and tantalum are highly correlated with the AI industry chain. These metals share common characteristics: limited supply elasticity and clear AI-driven demand growth. However, due to their relatively small overall market capacity, price fluctuations tend to be larger than those of base metals.
Within the broader AI wave, which specific material segments could directly benefit?
Chen Ziyang: AI-related material investment opportunities are not confined to non-ferrous metals; they span a wide range, including PCB materials, electronic component materials, semiconductor materials, and certain non-ferrous minor metals, all of which stand to benefit.
Comments