On August 19, the U.S. Treasury announced an expansion of its long-duration Treasury buyback program to provide greater liquidity support to the bond market. According to the statement, the scale of liquidity-support buybacks for long-term Treasuries will be "at least doubled," rising from $2 billion to $4 billion, with the repurchase scope covering 10-year to 30-year bonds. Recently, long-term U.S. Treasury yields have been climbing steadily, implying higher future borrowing costs for the government. The 30-year yield hit 5.31% on August 17, its highest level since June 2007. Following the Treasury's intervention announcement, long-term yields fell significantly.

The core driver behind this surge in long-end rates has been the term premium, rooted in AI giants issuing high-yield debt at 7%-10% to fund massive capital expenditures. These firms have shifted from being capital suppliers to absorbers of long-duration capital, directly competing with the Treasury for market liquidity beta. After the Treasury's rescue announcement, the yield curve flattened, with medium- and long-term yields tumbling—the 30-year dropped 10 basis points intraday, while the 10-year fell 6 basis points to 4.64%. The U.S. dollar index accelerated its decline, and gold staged a sharp rebound, reclaiming the $4,500 per ounce level.

Where to begin understanding the impact

How does the U.S. long-end rate affect non-ferrous metals? The core transmission logic is as follows: AI giants issuing high-yield debt squeezes long-bond market liquidity, driving up the term premium; the Treasury's buyback intervention then pulls long-end rates lower, weakening the dollar, lifting gold, and repairing the financial attributes of metals. Industry insiders point to three key dimensions of benefit for the non-ferrous metals sector.

First, financial attribute repair—lower rates and a weaker dollar. Non-ferrous metals, especially precious metals, copper, and aluminum, possess both commodity and financial attributes. Falling long-end rates and a softer dollar directly alleviate the valuation pressure that high rates and a strong dollar had imposed on the sector. Gold, as a non-yielding asset, benefits first from the rebound, with the momentum then transmitting to industrial metals with stronger financial characteristics like copper and aluminum.

Second, the strengthening of the de-dollarization narrative—a repricing of the "national security premium" for resource assets. The deeper bullish factor lies in the fact that the Treasury's forced bond buybacks expose the fragility of U.S. fiscal debt rollover. When markets begin to question the sustainability of U.S. debt and fiscal policy, the de-dollarization narrative gains traction. Global central bank gold purchases and strategic resource stockpiling demand rise, further highlighting the "national security premium" of non-ferrous resources. This is a continuation of the earlier shift in pricing logic for copper and rare earths, moving from "industry plus finance" toward a "industry plus finance plus national security" framework.

Third, improved liquidity expectations—the fading of macro headwinds. The non-ferrous sector currently sits in a "fundamentals-right, macro-left" position, with Fed rate hike expectations serving as a lingering overhang. This round of Treasury market stress has forced the Treasury to act, and markets are now anticipating that the Fed may be compelled to pivot toward easing to support fiscal debt management. Cooling rate-hike expectations and improving liquidity sentiment constitute a tangible positive for the sector.

It's worth noting that macro-level disturbances remain. In the Fed's meeting minutes released early Thursday Beijing time, a considerable number of officials indicated that further rate hikes would be necessary if inflation progress stalls. On the geopolitical front, on August 19, President Trump announced "the most severe economic action" against Iran, imposing an unprecedented "economic isolation" on the country. However, objective data shows that since the late-July meeting, newly released economic indicators have broadly pointed to slowing U.S. activity, including the largest monthly drop in retail sales in over a year and unexpectedly weak employment figures. Meanwhile, a series of inflation readings have come in at expected levels. Investors have consequently scaled back expectations for near-term rate hikes, with federal funds futures pricing roughly a 35% probability of a September increase as of early Thursday Beijing time.

Why such a narrow focus on the market

Looking ahead, CITIC Securities expects that the Strait of Hormuz situation's impact on gold prices will shift from suppression to support. With Fed monetary policy likely to be more accommodative than markets anticipate, combined with surging U.S. military spending widening the deficit, gold prices are expected to re-enter an upward trajectory within the year. Hua Bao Fund notes that the non-ferrous metals sector is currently in a "fundamentals-right, macro-left" phase, boasting three core advantages: tight supply-demand dynamics, valuations at historical lows, and clear long-term demand drivers from technology industry trends. Should macro headwinds ease, the sector could embark on a medium-to-long-term trend, and investors should focus on capturing this medium-to-long-cycle allocation value.

On the trading front today (August 20), the non-ferrous metals sector led gains, with main capital net inflows surpassing RMB 7.2 billion as of press time. The sector's gain and capital absorption both ranked second among the 31 Shenwan primary industries. Gold leaders significantly outperformed, with constituents of the Non-Ferrous Metals ETF Hua Bao (159876) showing strong performance: Chifeng Jilong Gold Mining Group Limited (600988) hit the daily limit, Shandong Gold rose over 8%, and Zhongjin Gold, Western Gold, and Hunan Silver gained more than 6%, with Shanjin International and Zijin Mining following suit.

What could drive the next leg higher

Different non-ferrous metals have varying cyclicality, momentum, and catalysts, making divergence inevitable. For investors bullish on the sector, a comprehensive approach through full coverage can better capture the overall beta. The Non-Ferrous Metals ETF Hua Bao (159876) and its feeder funds (Class A: 017140, Class C: 017141) track an index that comprehensively covers copper, aluminum, rare earths, gold, lithium, tungsten, molybdenum, tin, and other industries—spanning precious metals, industrial metals, energy metals, and strategic minor metals. This full-spectrum coverage enables better participation in the sector's beta, with heavyweight constituents including Zijin Mining, Luoyang Molybdenum, China Northern Rare Earth, Aluminum Corporation of China, and Zhongjin Gold. Additionally, the ETF is eligible for margin trading, making it an efficient tool for one-click exposure to the non-ferrous metals sector.

Data sources: Shanghai and Shenzhen exchanges, etc., as of August 20, 2026. Note: The individual stocks mentioned are constituents of the Non-Ferrous Metals ETF Hua Bao (159876) target index. As of end-July, their weightings were: Zijin Mining, 11.93%; Luoyang Molybdenum, 7.97%; China Northern Rare Earth, 4.70%; Aluminum Corporation of China, 3.55%; Zhongjin Gold, 3.13%; Chifeng Gold, 3.08%; Western Mining, 3.00%; Huayou Cobalt, 2.83%; Ganfeng Lithium, 2.63%; Yunnan Aluminium, 2.59%; Xiamen Tungsten, 2.44%; Shandong Gold, 2.38%; Tongling Nonferrous Metals, 2.34%; Tianqi Lithium, 2.19%; Inner Mongolia Xingye Silver & Tin, 2.11%; Jiangxi Copper, 2.10%; Tianshan Aluminum, 2.00%; Henan Shenhuo Coal & Power, 1.92%; Shanjin International, 1.82%; China Rare Earth, 1.66%; Yunnan Germanium, 1.64%; Sinomine Resource Group, 1.59%; Tin Industry Group, 1.57%; Shengduun Mining, 1.54%; Nanshan Aluminum, 1.52%; Shenghe Resources, 1.36%; Chihong Zinc & Germanium, 1.29%; Hailiang Group, 1.18%; Hunan Gold, 1.18%; Western Superconducting Technologies, 1.12%; Yunnan Copper, 1.08%; Youyan New Materials, 0.98%; Mingtai Aluminum, 0.98%; Shengxin Lithium Energy, 0.96%; Jinduicheng Molybdenum, 0.95%; Yahua Group, 0.94%; Zhongjin Lingnan, 0.92%; Zhongfu Industry, 0.89%; Hunan Silver, 0.84%; Zhongxi Nonferrous, 0.80%; Yongxing Special Materials, 0.80%; Baiyin Nonferrous, 0.69%; Panzhihua Vanadium & Titanium, 0.67%; Zhangyuan Tungsten, 0.62%; Guocheng Mining, 0.62%; Huayu Mining, 0.60%; Northern Copper, 0.60%; Zhuzhou Smelter Group, 0.57%; Chujiang New Materials, 0.56%; Hengbang, 0.54%; Siri New Materials, 0.51%; Hua Xi Nonferrous, 0.49%; China Uranium, 0.48%; Boway Alloy, 0.43%; Ten Yuan Cobalt, 0.40%; Jintian Copper, 0.40%; BaoTi Group, 0.38%; Chuangxin New Materials, 0.33%; Western Gold, 0.33%; Huafeng Aluminum, 0.29%. The index constituents displayed here are for illustration only, and stock descriptions do not constitute investment advice of any form, nor do they represent the holdings or trading activities of any fund under the manager.

ETF fee disclosure: When subscribing or redeeming fund shares, the subscription/redemption agent may charge a commission of up to 0.5%. On-exchange trading fees are subject to actual charges by securities firms. The ETF does not charge sales service fees. Feeder fund fee disclosure: For the Hua Bao CSI Non-Ferrous Metals ETF Feeder Fund (Class A), the subscription fee is RMB 1,000 per transaction for amounts of RMB 2 million or above, 0.6% for amounts between RMB 1 million and RMB 2 million, and 1% for amounts below RMB 1 million; the redemption fee is 1.5% for holdings of fewer than 7 days and 0% for holdings of 7 days or more, with no sales service fee. For the Hua Bao CSI Non-Ferrous Metals ETF Feeder Fund (Class C), no subscription fee is charged, the redemption fee is 1.5% for holdings of fewer than 7 days and 0% for holdings of 7 days or more, and the sales service fee is 0.3%.

Risk disclosure: The Non-Ferrous Metals ETF Hua Bao passively tracks the CSI Non-Ferrous Metals Index, with a base date of December 31, 2013, and a release date of July 13, 2015. Constituent stocks are adjusted periodically per the index methodology, and backtested historical performance does not indicate future index returns. The fund manager assesses this fund's risk level as R3-medium risk, suitable for balanced (C3) and above investors; please refer to the sales institution for suitability matching opinions. Any information appearing herein (including but not limited to stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only, and investors are solely responsible for their own investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice to readers of any form, nor do they bear any liability for direct or indirect losses arising from the use of this content. Fund investment carries risks; past performance of a fund does not represent its future performance, and performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Invest in funds with caution.