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the price of copper fell from 89,000 yuan/ton to 70,000 yuan/ton, and the price of crude oil fell from 80 us dollars/barrel to below 70 us dollars/barrel... the commodity market, which was hot in the first half of the year, has been cooling down recently and turning into a structural market.

most institutions have turned cautious about the overall trend of commodities. in its latest research report, goldman sachs lowered its expectations for key industrial products such as copper, but continued to be optimistic about gold. however, with the growing expectations of the federal reserve's interest rate cut, the market situation is changing every day.

industrial products market under pressure

industrial products have generally performed poorly recently.

in terms of nonferrous metals, the nanhua nonferrous metals index has been trending in an inverted v since march, hitting a record high in may, and price fluctuations have significantly intensified. the current nanhua nonferrous metals index has returned to the level in march. taking copper as an example, the main contract price of shanghai copper is currently around 72,000 yuan/ton, down nearly 20% from the high of 89,000 yuan/ton in may. the stock prices of nonferrous metals have also adjusted significantly, with companies such as jiangxi copper and zijin mining falling by more than 20% from their highs this year.

goldman sachs lowered its expectations for copper in its latest research report. goldman sachs pointed out that the sharp decline in copper inventories may occur much later than it had previously expected. therefore, goldman sachs postponed its copper price target of $12,000 per ton at the end of 2024 to after 2025, and forecast the copper price in 2025 to be $10,100 per ton, which is still higher than the current price, but far lower than its previous expectation of $15,000 per ton.

nanhua futures research institute believes that the sharp fluctuations in the prices of non-ferrous metals, represented by copper prices, are a game between expectations and reality, as well as a fierce collision between funds and industries. strong expectations have not brought about the realization of strong reality. the expectations of interest rate cuts have been continuously postponed, and demand has shrunk after price increases, pushing up inventory levels. the market has returned to the weak reality trading logic. in addition, the panic of the us economic recession has returned in august, and non-ferrous metal prices have generally given up the gains in the first half. looking ahead to the market, the non-ferrous metal sector will continue to play between the weak reality of a weakening economy and declining demand, and the strong forecast period of continuous policy relaxation. it is expected that it will still be difficult to get out of the unilateral trend market within the year, and the overall probability of volatility is relatively high.

the market also has low expectations for crude oil prices. goldman sachs expressed a cautious attitude towards oil in its research report. data from this summer showed that china's cyclical support for commodity demand, especially oil/copper demand, is weakening. without strong chinese demand, it is difficult to see a gap in the event of an unexpected increase in supply.

in the domestic commodity market, the overall performance of the energy and chemical sector has been weak recently due to the sharp weakening of crude oil on the cost side. fuel oil, styrene, paraxylene, ethylene glycol, and other products have fallen sharply. due to the prominent contradiction between supply and demand, the decline of soda ash has been relatively smooth, setting a new low. the current market expectations are relatively pessimistic, and the positive support from the policy side is becoming increasingly short-lived. it will take time for the trend of the chemical sector to reverse.

in addition, varieties such as rebar in the ferrous sector have been even weaker this year, and iron ore has also been falling continuously recently, with recent prices hitting new lows for the year.

goldman sachs is bullish on gold, but bridgewater is reducing its holdings

in goldman sachs' research report, gold is the only commodity that is clearly bullish. goldman sachs believes that gold remains the preferred tool for hedging geopolitical and financial risks, and the upcoming interest rate cuts by the federal reserve and ongoing purchases by emerging market central banks also provide additional support. goldman sachs maintains its target of $2,700 per ounce for gold in 2025.

as of early morning on september 7, beijing time, the latest london spot gold price was around $2,500 per ounce, with a year-to-date increase of more than 20%. the rmb gold price performed slightly worse than the overseas market, with a year-to-date increase of around 18%.

while goldman sachs is bullish on gold, the well-known hedge fund bridgewater has been reducing its holdings of gold. the semi-annual reports of many gold etfs show that bridgewater (china), which has firmly held gold etfs since mid-2022, has sold heavily in the first half of this year. among them, bridgewater (china) investment management co., ltd.-bridgewater all weather enhanced china private equity securities investment fund no. 3, bridgewater (china) investment management co., ltd.-bridgewater all weather enhanced china private equity securities investment fund no. 2, and bridgewater (china) investment management co., ltd.-bridgewater all weather enhanced china private equity securities investment fund no. 1 held 31.5935 million, 5.7018 million and 4.681 million shares of e fund gold etf respectively at the end of last year, but the latest semi-annual report shows that the above three bridgewater (china) products have withdrawn from the list of the top ten holders of e fund gold etf.

it is also worth mentioning that agricultural products have recently rebounded. in the view of the nanhua futures research institute, this is mainly due to the ministry of commerce's anti-discrimination investigation on canadian rapeseed, but not all agricultural product increases are actually affected by the incident. the first impact is on rapeseed meal and rapeseed oil. rapeseed meal is mainly used for aquatic feed, and the substitutability of soybean meal is limited, so the increase in rapeseed meal is much greater than that of soybean meal. however, soybean oil is highly substitutable for rapeseed oil, while palm oil is less substitutable, resulting in rapeseed oil rising and falling first, while palm oil has the weakest trend. since my country has previously turned to russia to import rapeseed oil, but canada is still the main source of rapeseed meal imported by my country, the impact of rapeseed meal is greater than that of rapeseed oil. overall, rapeseed meal has the greatest impact, and other varieties are affected by the current weak supply and demand relationship, and the strength of following the increase is much weaker.

however, the continued rise in expectations for a rate cut by the federal reserve has brought some uncertainty to global financial markets. kristina hooper, chief global market strategist at invesco, said that in the coming year, the market expects the federal reserve to cut interest rates by about 200 basis points, which may provide greater impetus for risk assets in the coming months. in this environment, the market may expect the economy to reaccelerate by the end of 2024 or the beginning of 2025, which may drive strong performance of risk assets.