Understanding the Market | Gold stocks continue their recent upward trend, spot gold approaches USD 4,150, setting new highs, and gold miners have significant profit elasticity
Jihai Resources rose 9.3%, closing at HKD 1.88; Lingbao Gold rose 6.71%, closing at HKD 21.3; Shandong Gold rose 5.06%, closing at HKD 44; Zhaojin Mining rose 5.23%, closing at HKD 35; China Gold International rose 4.31%, closing at HKD 150.2. On the news front, driven by geopolitical factors, economic uncertainty, expectations of interest rate cuts by the Federal Reserve, and strong central bank buying, spot gold approached USD 4,150, setting a new high on Tuesday. Bank of America raised its gold and silver price forecasts for next year, targeting a gold price of USD 5,000 per ounce and a silver price of USD 65 per ounce. HSBC recently released a research report stating that the rise in gold prices will bring significant profit elasticity to Chinese gold producers. The bank believes that for every 1% change in gold prices, the profits of pure gold mining stocks will change by approximately 2%. This multiplier effect means that in a gold bull market, the potential price increase of gold producers' stocks will significantly exceed the increase in gold prices themselves. Based on this expectation, HSBC has raised the target prices for Zijin Mining, Shandong Gold, and Zhaojin Mining
According to the Zhitong Finance APP, Ji Hai Resources (02489) rose by 9.3%, trading at HKD 1.88; Lingbao Gold (03330) increased by 6.71%, trading at HKD 21.3; Shandong Gold (01787) rose by 5.06%, trading at HKD 44; ZHAOJIN MINING (01818) increased by 5.23%, trading at HKD 35; CHINAGOLDINTL (02099) rose by 4.31%, trading at HKD 150.2.
On the news front, driven by geopolitical and economic uncertainties, expectations of interest rate cuts by the Federal Reserve, and strong central bank buying, spot gold approached USD 4,150, reaching a new high on Tuesday. Bank of America raised its gold and silver price forecasts for next year, targeting a gold price of USD 5,000 per ounce and a silver price of USD 65 per ounce.
HSBC recently released a research report stating that the rise in gold prices will bring significant profit elasticity to Chinese gold producers. The bank believes that for every 1% change in gold prices, the profits of pure gold mining stocks will change by approximately 2%. This multiplier effect means that in a gold bull market, the potential price increase of gold producers' stocks will significantly exceed the increase in gold prices themselves. Based on this expectation, HSBC has raised the target prices for Zijin Mining, Shandong Gold, and ZHAOJIN MINING
