Why do gold stocks "do nothing?"

Over the past few months, the international gold price has reached a record high and has approached an integer mark of 1,600 U.S. dollars per ounce. Interestingly, the performance of gold stocks such as Shandong Gold (600547) and China Gold Gold (600489) is extremely dull, leaving many brokerage analysts and investors puzzled.

Significant growth in performance

The price of gold continued to rise, but the stock price of gold stocks has always shown a pattern of stagflation, which has caused many investors to be puzzled.

Some people have speculated that listed companies of gold resources have incurred huge losses due to misdirected orientations in the hedging process, and most hedged the gains brought about by the rise in spot gold. However, the investigation did not find such a situation. Benefiting from the continued rise in the price of gold, the performance of related listed companies has generally increased more than expected.

According to the latest performance forecast, the growth rate of gold stocks over 100% is: Chenzhou Mining (002155) (300% - 350%); the growth rate is between 50% - 100%: Shandong Gold (50% - 100%); between 0-50% growth rate: China Gold Gold and Zijin Mining.

Is there compensatory growth opportunity?

For the stagflation pattern of the gold board, a well-known Shenzhen private equity research director said that because the gold stock itself has been seriously overvalued, even if the price of gold rises, there is no attraction.

The above-mentioned sources believe that “If gold can grow out of the ground like agriculture, then a 30-fold valuation is not expensive. But according to existing reserves, assuming that the mine is mined and the cost is reduced, no gold stock can Back to this, they can only maintain their prices through continuous mining, but there are not many high-quality gold mines."

However, CITIC Jintong Securities believes that for some time to come, factors such as inflation expectations, concerns about the European debt crisis, and US Treasury bond issuance are still the dominant factors in the gold market. As the gold price performance continues to exceed expectations, expectations for gold are expected to be revised, and the pattern of stagflation of gold stocks will change, creating opportunities for compensatory growth.

Extended reading

Although Silver encountered Waterloo in May, it will not die. Silver will rise steadily in the second half of the year as investors buy silver as an expensive gold alternative.

Although 60% of the silver mammoth plunged after reaching its peak in April, so far this year, silver has continued to lead the precious metals with a cumulative increase of 24%. Silver is still attractive to investors who are wary of inflation.

Analysts said that silver prices are expected to rise further in the second half of this year. When gold hits a record high, investors will start to search for alternatives that are cheaper than gold. Silver may be the candidate.

Phillips expects silver prices to reach $43 in the second half of this year, and it is expected that silver prices will hit $40.2 in the third quarter.