International gold prices experienced a sharp decline yesterday (March 18), with spot gold falling 3.86% to break below the $4,900 per ounce level, hitting its lowest point in a month. Has the traditional wisdom of "buying gold in troubled times" lost its effectiveness? What caused this unusual drop in gold prices? Due to geopolitical tensions in the Middle East disrupting transport through the Strait of Hormuz, energy and chemical product prices have continued to rise. This has directly increased inflation expectations in Europe and the United States, forcing markets to scale back bets on interest rate cuts. The yield on the two-year U.S. Treasury note briefly surpassed 3.75%. As the U.S. dollar index staged a strong rebound, prices of internationally traded commodities like gold, silver, and copper came under pressure.
This round of geopolitical shock has, via the "inflation-interest rates-liquidity" chain, reactivated traditional macroeconomic factors that typically suppress gold, temporarily pulling it away from its safe-haven asset pricing logic. This does not signify the disappearance of gold's safe-haven属性 but suggests that, for a period, the market may be more focused on the "opportunity cost of holding gold in a high-interest-rate environment."
However, industry insiders point out that the short-term correction in gold does not imply a weakening of the overall investment thesis for the base metals sector. The base metals sector encompasses precious metals, base metals, and minor metals, each driven by different factors. While macroeconomic expectations are dampening short-term sentiment, the supply-demand fundamentals for certain varieties may demonstrate medium- to long-term support.
1. Regarding copper: Although suppressed in the short term by a stronger U.S. dollar, from a medium- to long-term perspective, copper, as a critical metal for the energy transition, may hold strategic value under the guidance of China's upcoming 15th Five-Year Plan. Expectations for tight supply likely remain unchanged, while demand from power infrastructure and new energy vehicles is expected to continue providing momentum. 2. Regarding aluminum: Geopolitical events in the Middle East are reshaping the global aluminum market landscape. The effective closure of the Strait of Hormuz has caused severe supply disruptions, making aluminum the strongest performer among industrial metals in this cycle, with prices currently approaching four-year highs. 3. Regarding minor metals: China accounts for 90% of global rare earth smelting capacity and over 80% of global tungsten supply. Minor metals are being upgraded from industrial "vitamins" to national strategic resources. Against the backdrop of the energy transition, high-end manufacturing, and geopolitical maneuvering, their strategic importance and supply-demand dynamics are continuously improving, significantly opening up potential for value reassessment of leading companies.
Looking ahead for the base metals sector, Guosheng Securities believes that the combination of supply-demand mismatches, accommodative macro policies, and industrial upgrading will create resonance, suggesting the "metals feast" is not a short-term spike and that high profitability could be sustained for 3-5 years. Huatai Securities recommends a medium allocation to the base metals sector, meaning 10%-20% within one's fund portfolio, to both participate in potential gains from rising metal prices and diversify risk during market fluctuations.
In market trading today (March 19), the Base Metals ETF (159876), which provides comprehensive coverage of industry leaders in gold, rare earths, copper, aluminum, and other base metals, underwent a consolidation and correction in line with the market. Its on-market price plunged 4.2%, marking the seventh consecutive negative daily close and falling to price levels last seen in early January this year. This may present a buying-on-weakness opportunity for funds optimistic about the sector's future performance.
Among its constituent stocks, all 60 components declined. Sino Gold International fell over 7%, while Yongxing Special Materials and Chihong Zinc & Germanium dropped more than 6%, leading the losses and weighing on the index performance.
[The Base Metals Trend is Here, An 'Unstoppable Super Cycle'] The underlying index of ChinaAMC Base Metals ETF (159876) and its feeder funds (Class A: 017140, Class C: 017141) comprehensively covers industries including copper, aluminum, gold, rare earths, and lithium, spanning different景气 cycles such as precious metals (safe-haven), strategic metals (growth), and industrial metals (recovery). Full category coverage allows for better capture of the sector's beta movements. Furthermore, this ETF is a margin trading security, making it an efficient tool for one-click allocation to the base metals sector.
As of the end of February, ChinaAMC Base Metals ETF (159876) had a latest size of 2.427 billion yuan, with an average daily turnover exceeding 100 million yuan over the past month. Among the three ETF products tracking the same underlying index in the market, it ranks first in both size and liquidity.
Note: The previous on-market abbreviation for ChinaAMC Base Metals ETF (159876) was有色龙头ETF. ETF fee-related information: When investors subscribe for or redeem fund shares, the subscription/redemption agency may charge a commission not exceeding 0.5%. On-market trading fees are subject to the rates actually charged by the securities company. The ETF does not charge a sales service fee. Feeder fund fee-related information: For the ChinaAMC CSI Base Metals ETF Feeder Fund (Class A), the subscription fee rate is 1,000 yuan per transaction for subscription amounts of 2 million yuan (inclusive) or above, 0.6% for amounts between 1 million yuan (inclusive) and 2 million yuan, and 1% for amounts below 1 million yuan. The redemption fee rate is 1.5% for holding periods under 7 days and 0% for holding periods of 7 days (inclusive) or more. No sales service fee is charged. The ChinaAMC CSI Base Metals ETF Feeder Fund (Class C) does not charge a subscription fee. The redemption fee rate is 1.5% for holding periods under 7 days and 0% for holding periods of 7 days (inclusive) or more. The sales service fee is 0.3%. Risk提示: ChinaAMC Base Metals ETF passively tracks the CSI Base Metals Index. The base date of this index is December 31, 2013, and it was published on July 13, 2015. The index's performance over the past five complete years is as follows: 2021, +35.89%; 2022, -19.22%; 2023, -10.43%; 2024, +2.96%; 2025, +91.67%. The index's constituent stocks are adjusted according to its compilation rules, and its historical backtested performance is not indicative of its future performance. The mention of index constituents herein is for display purposes only; descriptions of individual stocks are not intended as investment advice in any form and do not represent the holdings or trading动向 of any fund managed by the management company. The fund manager assesses this fund's risk等级 as R3-Medium Risk, suitable for investors with a Balanced (C3) or higher risk profile. Please refer to the sales institution for the final suitability matching opinion. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only, and investors are responsible for any independent investment decisions they make. Furthermore, any views, analysis, or forecasts in this article do not constitute investment advice of any kind to the reader, and no responsibility is accepted for any direct or indirect losses arising from the use of this content. Fund investment carries risks. The past performance of a fund is not indicative of its future performance. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Invest carefully in funds.
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