China Securities Construction Investment: Gold Price Sees Short-term Correction, Disturbance in Electrolytic Aluminum Supply Intensifies

　　Source: CITIC Construction Investment Securities

　　After the Taweelah smelter, under EGA, was hit by Iranian missiles and drones last weekend, it has been forced to shut down due to an “uncontrolled stoppage” of smelting equipment. Its output for 2025 was expected at 1.6 million tons. Preliminary assessment indicates that it may take up to 12 months to fully restore electrolytic aluminum production. In the US-Iran conflict, the loss on the aluminum supply side is being overshadowed by current panic sentiment and can be considered as an aggressive asset class. Brent crude oil prices remain above $100, and the market continues to interpret concerns over “stagflation” or “recession.” In both scenarios, gold performs relatively well and can be prioritized in asset allocation.

　　1. A severe global economic recession with a cliff-like drop in consumption. In its latest Global Economic Prospects report, the World Bank downgraded its 2025 global growth forecast from 2.7% in January to 2.3%, with nearly 70% of economies seeing growth downgrades. The World Bank said global economic growth is slowing due to trade barriers and an uncertain global policy environment. Compared to six months ago, when a “soft landing” seemed possible, the global economy is once again in turmoil. If course corrections are not made rapidly, living standards may be hit. Global economic data are already trending downward. If a deep recession occurs, it would severely affect base metals consumption.

　　2. Uncontrolled US inflation, the Fed tightening monetary policy more than expected, and a strong dollar suppressing asset prices. The US has been unable to effectively control inflation and continues to raise rates. The Fed has already executed a series of large rate hikes, but the services sector, especially rent and wages, remains sticky, preventing inflation from falling. If the Fed maintains aggressive rate hikes, this is negative for dollar-denominated base metals.

　　3. Domestic new energy sector consumption growth falls short of expectations, and real estate sector consumption remains persistently sluggish. Although real estate sales-related policies have been eased to various degrees, residents’ purchasing willingness is lacking and progress on resolving developers’ debt risks is unsatisfactory. If sales do not improve, subsequent real estate completions will stall, negatively affecting demand for some domestic base metals.

　　External Release Date: April 6, 2026

　　Report Publishing Organization: CITIC Construction Investment Securities Co., Ltd. 

　　Analysts of this report: 

　　Wang Jie Chao SAC No.: S1440521110005

　　Qin Jing SAC No.: S1440524080002

　　SFC No.: BWC080

　　Shao Sancai SAC No.: S1440524070004

Editor: Zhu Henan