Gold prices have climbed above $4,600. Is the metals bull market back?

富途寰球私享匯

joined discussion ·

Weekly Outlook | Treasury ramps up market support, gold and Bitcoin surge in response

This week's market outlook is out; feel free to book a session for deeper insightsLive at 4:30 PM, face-to-face online consultation:

Market Outlook Weekly Call

Ended

Helping you understand this week's strategies for the US and Hong Kong markets:

Treasury doubles buyback size but fails to curb rates; what can still support US stocks at high levels?

Southbound funds turned to net outflows this week; how should we view the Hong Kong stock market going forward?

I. Macro

1.1 Treasury supports long-term bonds, retail sales disappoint, gold and Bitcoin soar together

The U.S. Treasury Secretary stated that the scale of long-term Treasury buyback operations will expand by at least double, covering two maturity segments: 10- to 20-year and 20- to 30-year bonds. The current maximum size per operation is$2 billion, and the size per operation will be increased to at least$4 billionThe adjustments will take effectSeptember 9, 2026and will be implemented for the remainder of this quarterly refinancing cycle (until November 4, 2026). The Treasury Department will provide more information on future buyback sizes at the next quarterly refinancing meeting scheduled for November 4, 2026.

This expansion of the buyback operation scale reflects the Treasury's desire to provide stronger liquidity support to the long-term nominal Treasury market. The Treasury will announce updated interim Treasury buyback arrangements later. Over the next 12 months, the US has$10 trillionin Treasuries needing rollover, and the total debt size has exceeded$40 trillion。This magnitude of mismatch has led tothe market not pricing it in as a substantive positive： The yield on the 30-year US Treasury briefly fell 7 basis points to 5.21% before quickly rebounding to around 5.27%, nearly wiping out all declines following the announcement.

Bessent's move is intended to signal to the marketa disguised form of Yield Curve Control (YCC)indicating that the Treasury cannot tolerate financing costs continuing to rise. With expectations of an implicit cap on long-end nominal rates, real rates have subsequently declined, directly reducing the opportunity cost of non-yielding assets,de facto fiscal expansion has further propelled the weak dollar trend, driving a sharp single-day surge in gold prices3.5%Bitcoin briefly broke through$77,000, and emerging markets rebounded.

US retail sales fell month-on-month in July0.6%(Market expectation +0.1%, previous value +0.2%), marking the largest monthly decline since May 2025, although year-on-year growth remained at +5.0%. Auto dealerships, online sales, grocery stores, and gas stations were the main drag on this month's data. The one-time boost from excess tax refunds in the first half of 2026 has largely been exhausted,if retail data continues to weaken in the second half, it will trigger market concerns about a recession. Judging from retail data, raising interest rates in the second half will be quite difficult.。

30-Year US Treasury Yield

Source: Futubull, 2026-08-22

Implied Probability of Fed Rate Hikes

Source: CME FedWatch, 2026-08-22

1.2 Accelerated issuance of local government special bonds fails to mask double-digit decline in infrastructure investment; capital is accelerating towards innovation sectors

China's monthly economic data remained weak. Although the scale of new local government special bond issuance in June-July (RMB 912.8 billion) accelerated compared to the previous period, the month-on-month decline in infrastructure investment still reached double digits. This suggests that under the pressure of local debt resolution, funds may be prioritized for resolving existing debt rather than financing new projects; meanwhile, insufficient project reserves and extreme weather conditions such as typhoons and heavy rains in July have severely hampered construction progress.

Although manufacturing investment overall turned negative (-1.7%), high-tech industry investment grew year-on-year from January to July5.0%, with a surge in investment in electronic circuit manufacturing57.7%, growth in integrated circuits11.5%, growth in lithium-ion batteries23.0%，Capital is accelerating its shift towards innovative segments such as R&D and design。

From January to July, the sales area and sales value of newly built commercial housing declined year-on-yearby 11.8% and 13.1%, respectively, weakness on the sales side has directly caused developers' willingness to acquire land and start construction to drop to freezing point (new construction area Jan-Jul down 24.0% year-on-year). In July alone, the year-on-year decline in commercial housing sales narrowed to single digits (-8.9%), and the average selling price reached9,779 yuan/sqm, up year-on-year5.2%。This improvement does not represent a comprehensive recovery, but is driven byDriven by structural factors： Sales of upgrade-driven housing and luxury properties in core Tier-1 and Tier-2 cities performed well, driving an improvement in the overall sales structure and price increases; however, the year-on-year decline in residential sales area widened to15.1%, indicating that wait-and-see sentiment among first-time homebuyers remains strong, and total demand is still bottoming out.

The core feature of July's consumption data is that overall momentum remains weak, but there is extreme K-shaped divergence internally. The year-on-year growth rate of total retail sales of consumer goods further dropped to0.6%, significantly below market expectations, with automobiles being the largest drag on July's retail sales, as monthly retail sales fell sharply year-on-year by17.0%;20.4%July saw a surge of [value] year-on-year (up 3.9 percentage points month-on-month), leading all categories, mainly driven by rising prices of key materials for consumer electronics (such as memory storage).

July Fixed Asset Investment Data

July Total Retail Sales of Consumer Goods Data

Source: National Bureau of Statistics of China, 2026-08-22

II. Market Outlook

2.1 US Stock Market Outlook

Last Week's Review

The S&P 500 and Nasdaq declined on a weekly basis,1.43%/2.05%ending their previous streak of consecutive gains. Long-end U.S. Treasury yields spiked, while rising oil prices and Middle East risks heightened inflation concerns. On August 19, the Treasury Department announced an expansion of buyback operations for 10-, 20-, and 30-year Treasuries, which initially pushed yields lower and lifted equities. However, this effect was offset within approximately 48 hours as yields resumed their upward trajectory, leading to increased defensive sentiment in the market.

This Week's Outlook

U.S. stocks have shifted from a liquidity-driven rally to high-level consolidation constrained by long-term interest rates. The Nasdaq significantly underperformed the Dow Jones Industrial Average and the S&P 500, reflecting the heightened sensitivity of high-valuation technology and AI-related stocks to the resurgence in long-end U.S. Treasury yields. With 10-year and 30-year Treasury yields remaining elevated, oil prices rising, and uncertainty building ahead of the Jackson Hole symposium and NVIDIA's earnings report, broad indices are unlikely to sustain smooth unilateral upside. Instead, they are more likely to exhibit wide-range fluctuations driven by data releases and key events.At the sector level, capital continues to rotate out of crowded AI-heavy weights into energy, healthcare, precious metals, and select value and cash-flow-generating assets. Looking ahead, key focus areas include fiscal supply/buybacks and the Federal Reserve's new framework. We expect hedging demand for gold and Bitcoin to persist. While there is no imminent systemic liquidity crisis in the short term, there are also insufficient catalysts to drive indices to new highs.

Basis for Viewpoint

Elevated long-end U.S. Treasury yields remain the primary denominator factor suppressing U.S. equities, particularly growth stocks. Last week, the Nasdaq fell 2.05%, significantly underperforming the Dow Jones, which declined 0.85%.This reflects not a broad deterioration in fundamentals, but ratherthe fact that denominator-side pressure is disproportionately affecting high-valuation assets.。 Earnings resilience remains intact, but merely having the right direction in performance is no longer sufficient to support further valuation expansion. For instance, Walmart's Q2 revenue and EPS both exceeded expectations, and it raised its full-year guidance, yet its U.S. same-store sales growth slowed to2.6%[data missing], raising further concerns about slowing consumer resilience. Last week, both gold and Bitcoin benefited from hedging demand against monetary credit risks, debt concerns, and geopolitical risks, while tech-heavy weights failed to rebound in sync.As long as oil prices and long-term bond yields remain elevated, the rebound in tech growth assets is merely a tactical repair, with the focus shifting from Beta to Alpha.

S&P 500 forward 12-month P/E ratio: 21.3 (as of August 20)

Source: Bloomberg, compiled by Futu Wealth Management

Key stock views: $Snowflake (SNOW.US)$

$Snowflake (SNOW.US)$ Its core Data Warehouse (DW) business has stabilized and is accelerating, leaving room for upward revisions to FY2027 growth and profit expectations. The market is beginning to reprice its mid-to-long-term FCF capabilities, leading to a broader valuation repair in the sector. Meanwhile, Snowflake commands a relative premium due to expectations of high growth, high margins, and its positioning in the AI data layer. Previously, the market was more concerned about whether it could shake off worries regarding slowing growth and an unclear AI positioning,but the mainstream view has now shiftedto verifying whether it can become one of the data control planes and consumption gateways in the enterprise AI era.， The current valuation center is moving closer to that of AI infrastructure software; if performance continues to be positive, valuations are expected to rise further.

Basis for Viewpoint

With the core DW stable and consumption growth maintaining momentum, quarterly revenue is more likely to beat guidance, leading to upward revisions in full-year guidance. Morgan Stanley points out that while the YoY comparison for 2Q is more challenging than the previous quarter due to a large migration boost in the same period last year, they still expect it to deliver34%product revenue growth,which validates expectationsof performance driven by the recovery in core product consumption.。 Cortex Code is currently the clearest driver of incremental AI adoption, expanding from technical users to knowledge workers and financial use cases. As enterprises move from AI experimentation to production deployment, data preparation, data governance, context retrieval, and platform consumption will all increase.Snowflake is naturally positioned within this value chain. In its early years, Snowflake was more commonly traded based on revenue multiples. Now, institutions are emphasizing both EV/Sales and EV/FCF,which validates expectationsthat the market is re-evaluating its free cash flow leverage over the next few years.。 The underlying reasons are stronger confidence in demand and AI monetization, along with overall multiple expansion in infrastructure software. AI-driven consumption is translating into product revenue, retention, and margin expansion.

SNOW Valuation

Source: Bloomberg, compiled by Futu Wealth Research

2.2 HK Stock Market View

Last Week's Review

Hang Seng Index up3.55%, Hang Seng Tech Index up1.24%, with the Hang Seng Index significantly outperforming the Hang Seng Tech Index; average daily turnoverHKD 249.4 billion, up 5.1% month-on-month, consistent with the strengthening index. The index was supported by low-valuation, high-dividend stocks, gold and energy, financials, and some assets with confirmed earnings performance. However, tech stock earnings showed significant divergence, with capital outflow pressure emerging in previously overcrowded trades such as semiconductors, optical communications, and AI hardware.

This Week's Outlook

In the short term, the Hong Kong stock market index outlook is neutral to bullish, with the Hang Seng Index (HSI) outperforming the Hang Seng Tech Index (HSTECH). Last week's volatility was mainly driven by the correction in US tech stocks transmitting to Hong Kong-listed semiconductors, optical communications, and hard tech sectors. Earnings divergences—such as Baidu's sharp drop and Xiaomi's strength—reinforced the split within the internet and tech sector. Additionally, the market demonstrated a strong buffer against external interest rate shocks; notably, even as US tech stocks weakened on August 19, Hong Kong stocks maintained their upward momentum, supported by banks, oil, gold, real estate policy expectations, and select earnings-driven stocks. The foundation for the upside lies in high trading volumes, full-year net inflows from Southbound funds, and valuation repair.However, the marginal weakening of Southbound flows last week serves as a reminderthat future gains will rely more heavily on the realization of earnings performance.。

Basis for Viewpoint

Southbound capital turned to significant net outflows this week, which is a key constraint against blind optimism in the short term. Net outflow of Southbound capital this weekHKD 11.58 billion, following a single-day net buy-in of HKD 14 billion on August 18, there were consecutive net sell-offs on August 19 and 20totaling HKD 10.621 billion、HKD 10.412 billion, reflecting that market participants have become significantly more cautious following the index's rebound. The short-term upward trajectory depends more on policy implementation and earnings realization. Domestic policies are seeing marginal improvements, such as the eight measures introduced for Shanghai's property market on August 20.The investment logic for Hong Kong stocks has shifted from expecting a recovery to verifying fundamentals. Companies that deliver on earnings, cash flow, and growth are more likely to enjoy sustained premiums.

HSI forward 12-month P/E ratio: 11x (as of August 21)

Source: Bloomberg, compiled by Futu Wealth Management

Key stock views: $ZIJIN MINING (02899.HK)$

$ZIJIN MINING (02899.HK)$ With gold, copper, and lithium as the core, a multi-commodity resource structure has achieved economies of scale. Marginal improvements in lithium and minor metals, coupled with a significant quarter-on-quarter increase in lithium carbonate production in Q2,26,800 tonnes, representing an increase of65%, while the average lithium price rose quarter-on-quarter byRMB 17,000/tonne, driving a quarter-on-quarter increase in gross profit from mined lithium.RMB 1 billion，The correlation of profit volatility is being diversified, thus, against the backdrop of declining gold prices in Q2, net profit excluding non-recurring items still achieved quarter-on-quarter growth.6%The company possesses the capability to globally source resources and manage complex mining assets. The semi-annual report explicitly mentions strategic price locking, energy substitution, and strengthened negotiations in overseas projects,The company is not only a resource holder but also a global project operator.

Basis for Viewpoint

Q2 Net profit attributable to shareholders of the parent company, excluding non-recurring itemsRMB 19.6 billion, an increase ofRMB 1.1 billion，quarter-on-quarter. The company has established a cross-commodity profit hedging mechanism. If the company were purely a gold producer, a 10% drop in gold prices combined with an 11% quarter-on-quarter increase in unit costs would likely lead to a significant decline in quarterly profits. However, Zijin Mining has seen simultaneous volume growth in copper, lithium, zinc, and rare precious metals,ultimately enabling its non-GAAP net profit to still achieve quarter-on-quarter growth. Gold and copper remain at the core of gross profit, contributing41.7% and 33.8% of gross profit respectively, securing the company's leading position in the two main tracks of global precious metals and base metals. In terms of growth, lithium production has increased significantly year-on-year and has entered a stage of scale contribution, while profits from minor metals and by-products are also rising. Common valuation headwinds for resource stocks include: large-scale capital expenditures, reduced dividends, and high debt levels, effectively treating shareholders as perpetual financiers. Zijin Mining's current operating cash flow is RMB 55.472 billion,a year-on-year increase92.41%, with a growth rate higher than that of revenue and net profit; the debt-to-asset ratio49.55%, fell below 50% for the first time since 2012; interim dividendsamounted to RMB 11.1 billion,with cumulative dividends for the calendar year exceedingRMB 20 billionThe cash dividend payout ratio will increase from 30% to 35% over the next three years.

Trends in the gross profit contribution of various mineral products at Zijin Mining

Source: Zijin Mining annual reports, Goldman Sachs; compiled by Futu Private Wealth

3. Key Focus for Next Week

On August 24, the Trump administration will intensify economic pressure on Iran and threaten to impose"unprecedented economic isolation"measures, with a press conference scheduled for Monday to detail specific actions. Additionally, the U.S. may announce a new fiscal consolidation plan next week, with the Treasury's single long-term bond buyback volume potentially exceeding$4 billion。

From August 27–29, the Jackson Hole Economic Policy Symposium will be held, featuring a keynote speech by Waller. This leaves only about 18 days until the FOMC meeting on September 15–16.Following his streamlined statement, elimination of the dot plot, and reduced forward guidance, this speech has become the clearest public anchor for the autumn policy path.

4. Highlights of Major Banks' Views from Last Week

US stocks: As market dynamics shifted from liquidity easing to high-level volatility constrained by long-end interest rates, the Nasdaq significantly underperformed the Dow Jones and the S&P 500,reflecting that high-valuation tech stocks and the AI supply chain are more sensitive to the renewed rise in long-term U.S. Treasury yields.。 With 10-year and 30-year U.S. Treasury yields at high levels, rising oil prices, and increased uncertainty ahead of the Jackson Hole symposium and NVIDIA's earnings report, it is difficult for indices to sustain a smooth unilateral upward trend. Future focus will be on fiscal supply/buybacks and the Fed's new framework, with expectations that hedging demand for gold and Bitcoin will persist. The U.S. equity business cycle is entering a new phase,with cash flow growth driving a multiplier effect across all industries. A surge in cloud business revenue has significantly boosted operating cash flow, reinforcing confidence in the sustainability of AI capital expenditures.

Hong Kong stocks: For Hong Kong stocks, the short-term index outlook is neutral to slightly bullish. Last week's volatility was mainly driven by the correction in U.S. tech stocks transmitting to Hong Kong-listed semiconductor, optical communication, and hard-tech sectors. Divergent earnings results—Baidu's sharp decline versus Xiaomi's strength—have intensified the differentiation within the tech and internet sector, while also demonstrating a strong buffer against external interest rate shocks.The marginal weakening of southbound trading last week serves as a reminder that future gains will need to be supported by actual earnings delivery.。

[Investment Advisory Information]

Yu Shilin, Licensed Representative, CE Number: ATQ882

Yang Yi, Licensed Central Number: BUR210

Sun Bihan, Licensed Representative, CE No.: BWS708

Disclaimer

This report is prepared by Futu Securities International (Hong Kong) Limited ("Futu Securities"). Without the prior written consent of Futu Securities, this report and the information contained herein may not be (i) reproduced, copied, or stored in any form, or (ii) directly or indirectly distributed or forwarded to any other person for any purpose. The information in this report is derived from sources that Futu Securities believes to be accurate and reliable as of the date of publication. However, this report is not intended to contain all information necessary for an investor’s decision-making and may be subject to delays, obstructions, or interceptions in transmission. Futu Securities makes no express or implied representation or warranty as to the adequacy, accuracy, completeness, reliability, or fairness of such information or opinions. Accordingly, Futu Securities and its affiliates (collectively, the "Futu Group") shall not be liable for any losses of any kind (including but not limited to direct, indirect, or consequential losses) arising from any third party’s reliance on the content of this report. The views, recommendations, suggestions, and opinions expressed in this report do not necessarily reflect those of Futu Securities or its affiliates and are subject to change without notice. Futu Securities has no obligation to update any information or opinions contained herein. This report is provided for general informational purposes only and is intended solely for the general reading of Futu Securities’ clients, without regard to any specific recipient’s investment objectives, financial situation, or particular needs. Nothing in this report constitutes or should be construed as an offer, recommendation, or solicitation by any member of the Futu Group to buy or sell any securities, investments, or other financial instruments. It should not be interpreted as an offer or invitation to purchase or sell securities. Any decision to purchase securities mentioned in this report should be based on publicly available information, including relevant prospectuses. The products discussed herein may not be suitable for all investors, and readers should fully consider relevant factors and seek professional advice before making any investment decisions. This report is provided to recipients on the basis that they are capable of independently evaluating investment risks and exercising independent judgment in investment decisions. In certain jurisdictions or countries, the distribution, issuance, or use of this report may violate local laws, regulations, rules, or licensing requirements. This report is not intended for distribution to or use by any person or entity in such jurisdictions or countries. Hong Kong investors with questions regarding Futu Securities research reports should contact Futu Securities directly. The Central Entity (CE) numbers of the authors’ SFC licenses are disclosed next to their names on the front page of this report. The analyst primarily responsible for preparing this report confirms that: (i) the opinions expressed accurately reflect his/her personal views regarding the listed corporation(s) covered in this report; and (ii) his/her compensation, past, present, or future, directly or indirectly, is not tied in any way to the specific recommendations or views expressed in this report. The analyst also confirms that neither he/she nor any related party has traded the securities of the listed corporation(s) covered in this report during the 30 calendar days prior to and the three business days following the report’s publication. Neither the analyst nor any related party serves as a senior officer of the listed corporation(s) covered in this report or holds any financial interest therein. In this report, Futu Securities holds no financial interest amounting to 1% or more of the listed company’s market capitalization and has had no investment banking relationship with the company in the past 12 months. None of the company’s employees are employed by the listed company.

37K Views