Gold prices continue hitting new highs, driving the Non-ferrous Metal Leading ETF (159876) to surge against the market trend. The intraday gain reached as high as 2.98%, closing up 1.04% with total trading volume of 41.19 million yuan, showing relatively active trading. Taking a longer view, this ETF has gained a cumulative 55.41% since its recent low point (April 8), significantly outperforming major indices including the CSI 300 (23.59%) and Shanghai Composite (22.95%).

Notably, funds are rushing in! The Non-ferrous Metal Leading ETF (159876) received net subscriptions of 13.8 million shares throughout the day. Shenzhen Stock Exchange data shows the Non-ferrous Metal Leading ETF (159876) attracted 18.10 million yuan yesterday, with cumulative inflows of 143 million yuan over the past 20 days. As of September 8, the latest scale reached 237 million yuan, hitting a new high since listing.

Data Source: CSI Index Company, statistical period: 2025.4.8-2025.9.9. The CSI Non-ferrous Metal Index's annual returns over the past 5 complete years were: 2020, 35.84%; 2021, 35.89%; 2022, -19.22%; 2023, -10.43%; 2024, 2.96%. Index constituent stocks are adjusted according to index compilation rules, and historical backtesting performance does not predict future index performance.

In terms of constituent stocks, gold leaders led the strong rally, with Hengbang Co., Western Gold, and Chifeng Gold all hitting daily limits! Among copper industry leaders, Baiyin Nonferrous surged over 6%, while Zijin Mining and Hailiang Co. rose over 2%. Rare earth leaders showed relatively weaker performance, with Shenghe Resources falling over 2% and China Northern Rare Earth dropping over 1%.

Chart: Top 10 Constituent Stocks by Gain in CSI Non-ferrous Metal Index

**Why Is Gold Surging? Two Key Factors May Be Most Critical**

1. Fed rate cut expectations continue heating up. CITIC Securities believes the Fed is expected to pursue a more front-loaded rate-cutting path, which could lead the gold market into a more stable bull run. Rate cuts exceeding market expectations may make inflation risks higher than economic hard landing risks, making gold's upward momentum more stable.

2. China's central bank has increased gold holdings for the 10th consecutive month. Huatai Securities believes that buyers represented by central banks may continue current gold purchasing strategies, and gold's upward trend may persist.

**As Gold Prices Soar, Why Are Funds Actively Positioning in Non-ferrous Metal Sectors?**

1. Industry linkage: Gold has significant correlation with other non-ferrous metals in mining and production, such as copper and zinc. Rising gold prices may drive mining and production activities of these non-ferrous metals, thereby affecting their market supply and prices.

2. Macroeconomic and monetary policy factors: With Fed rate cut expectations heating up, declining interest rates will weaken the dollar. Since most non-ferrous metals are priced in dollars in international markets, dollar depreciation makes non-ferrous metals relatively cheaper, increasing global buying interest.

3. Market improvement expectations: After the "anti-involution" policy was proposed, trillion-level infrastructure projects like the Yalong River Hydropower Project were launched. The "anti-involution" policy combined with large infrastructure projects directly creates huge demand for raw materials like non-ferrous metals.

4. Supply-side reform speculation: The steady growth work plan under the "anti-involution" background has sparked market speculation about a new round of supply-side reforms, similar to the impact of 2015 supply-side reforms on the non-ferrous metal sector. Current policies are expected to drive comprehensive recovery in the non-ferrous metal sector.

Looking ahead, CITIC Securities Investment Banking states that beyond monetary easing from the Fed's rate-cutting cycle, domestic "anti-involution" policies are optimizing production factors, improving profitability at all levels and market expectations, which benefits the transmission of rising metal prices downstream.

The 'metal heart' of future industries and 'golden blood' of modern industry! According to SWHY tertiary industry classifications, as of the end of August, the CSI Non-ferrous Metal Index passively tracked by the Non-ferrous Metal Leading ETF (159876) and its feeder funds (Class A: 017140, Class C: 017141) has sector weightings of 25.3% for copper, 14.2% for aluminum, 13.8% for rare earths, 13.6% for gold, and 7.6% for lithium. Compared to investing in a single metal industry, this can provide risk diversification and is suitable as part of an investment portfolio allocation.

Risk Warning: The Non-ferrous Metal Leading ETF and its feeder funds passively track the CSI Non-ferrous Metal Index. The index base date is 2013.12.31, published on 2015.7.13. The index's annual returns over the past 5 complete years were: 2020, 35.84%; 2021, 35.89%; 2022, -19.22%; 2023, -10.43%; 2024, 2.96%. Index constituent stocks are adjusted according to index compilation rules, and historical backtesting performance does not predict future index performance. Index constituent stocks mentioned in this article are for display purposes only. Individual stock descriptions do not constitute any form of investment advice, nor do they represent position information and trading activities of any fund under the manager. The fund manager assesses this fund's risk level as R3-Medium Risk, suitable for balanced (C3) and above investors. Suitability matching opinions are subject to sales institutions. Any information appearing in this article (including but not limited to individual stocks, comments, predictions, charts, indicators, theories, any form of expression, etc.) is for reference only. Investors must take responsibility for any autonomous investment decisions. Additionally, any views, analyses, and predictions in this article do not constitute investment advice to readers in any form, nor do they bear any responsibility for direct or indirect losses caused by using this article's content. Fund investment carries risks. Past performance of funds does not represent future performance. Performance of other funds managed by the fund manager does not guarantee fund performance. Fund investment should be approached with caution.

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