Shanghai Economic News, October 9 (Ge Jiaming) - During the "National Day" holiday, the global commodities market has experienced a celebration. On one hand, the global "chaos" has ignited market risk-aversion, pushing the precious metal trend to its peak, with the gold price breaking through the psychological level of $4,000 per ounce, and the silver price approaching $50 per ounce. On the other hand, due to supply-side disruptions, non-ferrous metals such as copper, aluminum, tin, zinc, and cobalt have also risen strongly.

The overall breakthrough and rise of the precious metal sector in this round is mainly driven by three factors: the Fed's interest rate cuts have been continuously suppressing real interest rates, the U.S. government's "shut down" and other geopolitical risks have pushed up the demand for safe havens, and the structural support brought by the global central banks' gold purchases. The rise in non-ferrous metals is mainly driven by supply contraction, with frequent disruptions in global copper mine supply being the market focus, and aluminum and nickel are also affected by supply-side disruptions. The surge in prices of energy metals represented by cobalt may indicate the spread of the awareness of national resource security.

Why precious metals continue to strengthen

On October 8th, the spot gold price first broke through the $4,000 mark, reaching a high of $4,059.3 per ounce, an increase of $1,432 for the year, with a cumulative gain of over 54%. At the same time, the price of the COMEX gold futures contract reached a high of $4,081 per ounce. As of the time of writing on the 9th, the COMEX gold futures contract turned negative, with a loss of about 0.9%, trading at $4,033 per ounce, up more than 52% year-to-date.

Silver prices also surged in lockstep. The most active COMEX silver futures contract closed at a record high of $48.44 per ounce on the 8th, briefly breaking through the $49 per ounce psychological level. The spot silver price touched a peak of $49.54 per ounce, approaching the $50 per ounce level. As of the 9th, the London spot silver price fell by 0.43%, trading at $48.6 per ounce, with a year-to-date gain of over 68%.

Zhou Honghao, assistant fund manager and chief gold researcher of Huahang Fund Index and Quantitative Investment Department, told an interview with Xinhua Finance that the direct stimulus factor for the current rise in gold prices comes from the unexpected "shutdown" of the U.S. government. The failure of the U.S. Congress to pass the temporary spending bill led to the suspension of some federal government agencies, which dragged on the U.S. economy. In addition, changes in the political situation in France, Japan and other countries have also made the safe-haven attribute of gold more prominent.

Gu Fengda, chief analyst of Guoxin Futures, also told Xinhua Finance in an interview that during the long holiday of the Double Eleventh Festival, the international precious metal market has made a milestone breakthrough, and the impact of the U.S. federal government's "shutdown" should not be overlooked. The release of important economic data, represented by non-farm employment data, has been stagnant, which will cause the U.S. Federal Reserve to lose the reference target for its monetary policy decision at the end of October. The uncertainty of the U.S. economy and the political situation in the United States has led to a certain degree of risk aversion in the market.

Gu Fengda also pointed out that it is worth noting that the performance of silver has been stronger than gold in recent stages, further highlighting its high elasticity characteristics under the resonance of financial attributes and industrial demand. From the perspective of asset comparison, silver has a significant valuation advantage over gold. Against the backdrop of the expectation of interest rate cuts by the US Federal Reserve and the recovery of industrial demand, the financial attributes and commodity attributes of silver resonate, attracting capital inflows.

"Market data shows that the average gold-silver ratio over the past 50 and 20 years is 63 and 70, respectively, while the current gold-silver ratio in the domestic and foreign markets is about 82 and 85, respectively, which is significantly higher than the historical central level, indicating that the silver price is still undervalued and there is ample room for catch-up," Gu Fengda said. The gold-silver ratio tends to be high when market risk aversion is strong and gold rises first. As optimism spreads and the industrial attribute takes effect, silver often lags behind and rises, driving the gold-silver ratio back to a reasonable range.

For the subsequent performance of precious metals, most analysts remain optimistic, with global trade uncertainties and geopolitical risks continuing to provide strong support for precious metals. In terms of the fourth quarter of 2025, Gu Fengda expects precious metals to continue with a high-level fluctuation trend, with the core driving factors still anchored to the Fed's policy path, the evolution of geopolitical risks, and the support from physical demand. Especially in the fourth quarter, when the macro-geopolitical policy sensitivity period overlaps with the global interest rate cut cycle, market volatility is expected to increase, and institutional and individual investors' willingness to allocate to gold and related products may further increase. "If the Fed continues to send accommodative signals in the fourth quarter, or if geopolitical conflicts experience a phased upgrade, it could push the gold and silver prices to further rise; on the contrary, if US economic data continues to be strong and inflationary trends re-emerge, it could trigger the market to re-price the pace of interest rate cuts, thereby suppressing the performance of gold and silver."

Zhou Honghao said factors that affect the long-term outlook for gold still include the "de-dollarization" trend and the pace of purchases by global central banks. The medium- and long-term logic of central bank purchases of gold will not change significantly, and the "new cycle of gold" will have a profound impact on the pricing power of gold. On the one hand, the average proportion of gold reserves to foreign exchange reserves of global central banks is about 20 percent; on the other hand, Ray Dalio, founder of Bridgewater Associates, has advised investors to allocate 15 percent of their portfolios to gold, which can become an important driving force for gold allocation.

Zhou Honghao said there are three aspects to be watched from a transactional perspective: First, attention should be paid to the changes in the U.S. government "shutdown". If the U.S. government restores order, the short-term risk-aversion may subside; Second, attention should be paid to the current crowdedness in gold trading. This round of gold fundamentals are strong, and it is also possible that it is in a phased oversold position, with $4,000 becoming a key support level; Third, attention should be paid to the pace of interest rate cuts by the Fed. If the risk of a U.S. economic recession increases and the cycle of interest rate cuts does not change, gold still has a good allocation value in the next 6-12 months.

The price trend of non-ferrous metals is eye-catching

During the holiday period, the non-ferrous metal sector performed outstandingly, becoming the focus of market attention. LME copper prices rose strongly, breaking through the important resistance level of $10,500 per ton on October 3 and reaching a near-one-year high on October 6, currently fluctuating within a narrow range around $10,700. The prices of other non-ferrous metals such as LME tin, cobalt, zinc, and aluminum also strengthened during the holiday period.

Citic Securities analyst Qiu Xiang believes that the recent resource supply side of tin and cobalt has been impacted, and the prices of energy metals represented by cobalt have soared, which may indicate the spread of the awareness of the autonomy of resource security in various countries. As of October 1st, the price of refined cobalt (battery grade, ≥99.8%) is 343,000 RMB/ton, with a 29% increase since September, and the price has doubled since the beginning of the year.

Jiu Xiang said that there is also a more grand narrative for base metals to follow. The extensive application in fields such as AIDC (Automatic Identification and Data Collection) and electricity has led to copper being regarded as the "oil" of the new era, and the decline in the average grade of global copper mines and the long-term lack of related capital expenditure have brought about expectations of a long-term tight balance between supply and demand, and there is no sign that this situation has been broken.

South Huasder futures analysis, frequent disruptions in global copper mine supply are the market focus. The accident at the Grasberg copper mine in Indonesia before the holiday has sharply tightened the global copper supply forecast for this and next year. In addition, copper mines in Chile and other places have also experienced production cuts, exacerbating the tight supply of copper concentrate. The tight supply has been transmitted to the smelting link, and the processing fee is at a low level. Some domestic smelters plan to shut down in October due to losses, and refined copper production is expected to decline month-on-month.

Zhan Dapeng, director of non-ferrous metal research at Guangda Futures Research Institute, told Xinhua Finance that market concerns over global copper mine supply continue to persist, and the supply side is expected to become more tense in the fourth quarter. The average copper price in the fourth quarter may rise significantly, and investors are advised to follow the trend. In addition, the Grasberg mine disaster is not a simple short-term disruption, and its potential repair cycle could last up to two years, which will have a sustained substantive impact on the global copper market and could exacerbate the supply shortage in the next two years. This event is likely to become a catalyst to push copper prices into a new medium-term upward cycle.

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