Gold Prices Surge Again!
On September 20th, gold stocks in both the Hong Kong and A-share markets continued to rise.
By the close of trading, Lingbao Gold (03330.HK) surged by 5.65%, China Gold International (02099.HK) increased by 4.03%, Shandong Gold (01787.HK) rose by 3.92%, and Zhaojin Mining (01818.HK) and Zijin Mining (02899.HK) also showed active performance, with increases of 3.57% and 2.84% respectively.
On the A-share side, related concept stocks also rose in tandem.
Chifeng Gold (600988.SH) rose by 4.31%, Zijin Mining (601899.SH) increased by 3.12%, China National Gold (600489.SH) rose by 3.09%, Shandong Gold (600547.SH) rose by 2.22%, and Western Gold (601069.SH) increased by 1.98%.
At the same time, the stock prices of many domestic listed retail gold brands also performed well.
For example, the recently very popular Laopu Gold (06181.HK).
Today, Laopu Gold once rose by 6.92% to 139 Hong Kong dollars during trading, setting a historical high, leading the entire Hong Kong gold stock sector.
However, the good times didn't last long, and the stock began to fluctuate and decline in the afternoon, eventually closing with a 7.69% drop, at 120 Hong Kong dollars per share.
Compared to the IPO price of 40.50 Hong Kong dollars per share on June 28, 2024, Laopu Gold has accumulated an increase of 196.3% so far, reflecting the high market enthusiasm.
Advertisement
In terms of news, overnight (September 19th, Eastern Time), spot gold rose again, once returning to above 2590 US dollars, and finally closed up 1.07% at 2586.56 US dollars per ounce.
The day before (September 18th, Eastern Time), the Federal Reserve started a monetary easing cycle, cutting interest rates by 50 basis points, and hinting that there would be another 50 basis points cut this year.
This move is seen as a boon to gold, as gold, as a safe-haven asset, will be more attractive when interest rates fall, supporting the strengthening of gold prices.
In fact, under the expectation of the Fed's rate cut, international gold prices have already seen a wave of the market.
So far this year, the international gold price has increased by more than 25%.
George Milling-Stanley, Chief Gold Strategist at State Street Global Advisors, said that the current trend of gold prices is a reasonable response to the latest monetary policy decision of the Federal Reserve.
Will Rhind, founder of GraniteShares Advisors, said that the start of the Fed's rate cut cycle means that interest rates are falling, and the US dollar will start to weaken.
This is beneficial to gold, and the next catalyst for gold's rise will be if people feel that the economy is entering a recession, and fear emerges, people need to start buying gold as a hedge.
At present, the pace of gold purchases by central banks around the world is still ongoing, which is good for the rise of gold prices.
According to the World Gold Council, the net purchase volume of central banks worldwide in July was 37 tons, an increase of 206% from June, the highest monthly increase since January of this year.
In addition, geopolitical risk events have occurred frequently recently, and the situation in the Middle East continues to be tense, prompting the market's risk aversion sentiment to continue to rise.
The demand for gold as a safe-haven asset has also increased, which also supports the rise of gold prices to a certain extent.
Looking forward to the future, institutions generally believe that in the long term, after the Fed's rate cut, the downward trend of the US dollar's real interest rates stimulates the rise of investment demand, coupled with the central bank's gold purchases to hedge against the weakening of the US dollar's credit, the bull market for gold has not ended, and it is expected to reach a new historical high.
Debon Securities said that with the Fed's rate cut this time, if there is no new catalyst, it is short-term to judge that the gold price will fluctuate around 2600 US dollars per ounce.
Looking at the historical performance of gold prices, gold prices tend to rise during the rate cut cycle.
UBS analysts also believe that gold prices can rise further, and expect that by the middle of 2025, the gold price target will be 2700 US dollars per ounce, and at the same time, it is expected that the demand for gold ETFs will accelerate in the next few months.
Leave a Comment