In the medium to long term, global central banks have been net buyers of gold for 22 consecutive quarters, and US federal debt has surpassed $39 trillion. The logic of monetary credit reassessment continues to deepen, providing structural support for gold's long-term allocation value.
During trading on June 12th, the gold sector collectively strengthened, following a rebound in gold prices. Chifeng Gold (600988.SH) rose more than 7%, Zijin Mining Group (601899.SH) gained over 6%, Zhongjin Gold (600489.SH) increased more than 4%, Hunan Gold (002155.SZ) advanced over 3%, and Shandong Gold International Mining (000975.SZ) climbed more than 2%, indicating significant profit-making effects within the sector. The international gold price has returned above $4,200 per ounce. After the market gradually digested inflation data, Federal Reserve policy expectations, and geopolitical event disturbances, gold has ushered in a phase of recovery.
Gold Price Stabilizes and Rebounds, Long-Term Allocation Thesis Remains Intact
The recent return of the international gold price above $4,200 per ounce has led to a marginal improvement in market sentiment. From a medium to long-term perspective, the core logic supporting gold prices has not fundamentally changed. Sustained gold purchases by global central banks, the reassessment of monetary credit in a high-debt environment, and geopolitical uncertainty collectively form a medium to long-term bottom support for gold prices. Against the backdrop of gold prices remaining at historically high levels, market focus is gradually shifting from the gold price itself to the profitability of companies within the gold industry chain. The period for gold stocks to realize their earnings potential is expected to begin.
Operational Leverage of Gold Stocks: Profit Amplification with Rigid Costs
Compared to gold ETFs, which primarily reflect changes in the gold price, gold stocks reflect both price changes and corporate earnings. Gold mining companies possess strong operational leverage characteristics: costs such as mining, labor, and equipment are relatively fixed, while the revenue side directly benefits from rising gold prices. During a gold price uptrend, corporate profit growth often significantly outpaces the rise in the gold price, creating a profit amplification effect characterized by "relatively fixed costs and elastic revenue release." When the market shifts its focus from the gold price itself to the realization of corporate profits, the elastic advantage of gold stocks becomes more prominent.
Sustained Central Bank Gold Purchases and Monetary Credit Reassessment Support Long-Term Demand
Data from the World Gold Council shows that global central banks were net buyers of approximately 244 tonnes of gold in the first quarter of 2026, marking 22 consecutive quarters of net purchases. Official sector allocation demand remains robust. Concurrently, US federal debt has exceeded $39 trillion. Against this high-debt backdrop, the US dollar credit system faces reassessment pressure, continuously highlighting gold's value as a non-sovereign credit asset. Driven by both central bank purchases and monetary credit reassessment, the long-term demand structure for gold is undergoing systematic changes, providing fundamental support for a higher medium-term price range.
Analysis of Key Companies
Chifeng Gold is a domestic gold mining company with prominent growth characteristics, holding core assets such as the domestic Jilong Mine and Wulong Mine, and the overseas Sepon gold-copper mine. The company has been steadily advancing the release of production capacity from its overseas mines in recent years. The open-pit to underground mining transition project at the Sepon gold mine in Laos is gradually contributing incremental output. Coupled with improved profit per tonne of ore due to the higher gold price range, the logic of simultaneous increases in both production volume and profit margin is clear.
Zhongjin Gold is a core central state-owned enterprise platform in China's gold industry, with its controlling shareholder being China National Gold Group. Its mining resources are spread across major gold-producing provinces nationwide. The company holds several large mines, including Inner Mongolia Mining and Hubei Sanxin, and leads the industry in gold resource reserves. With expectations of consolidation and capital injection into central SOE mining assets, the company has significant potential for resource reserve increases and capacity expansion.
Hunan Gold is a significant gold, antimony, and tungsten polymetallic mining company in central and southern China, owning core mines such as Chenzhou Mining and Huangjindong. The company's antimony production ranks among the top globally. Its multi-metal portfolio of antimony, tungsten, and gold provides diversification advantages during metal price rotations. With rising gold prices and high prices for antimony and tungsten, the company's multi-product profit elasticity warrants attention.
Shandong Gold International Mining is the A-share listed platform under Shandong Gold Group. Its main mines are located in regions like Inner Mongolia and Qinghai, characterized by relatively high gold grades and controllable mining costs. Supported by the group, the company continues to advance resource acquisitions and capacity expansion, steadily increasing its gold production. With gold prices remaining high, the logic of simultaneous increases in both production volume and price for its mined gold is relatively certain.
Zijin Mining Group is one of China's largest mining conglomerates, with its gold segment contributing a core portion of its profits. The company holds multiple overseas gold mine assets, including the Buriticá gold mine in Colombia, the Zeravshan gold mine in Tajikistan, and the Norton gold mine in Australia, leading in global gold resource layout. Driven by the higher gold price range and the continuous release of overseas mine capacity, the profit contribution from the company's gold segment is expected to expand further.
Investment Perspective
In the short term, the international gold price has returned above $4,200 per ounce, with market sentiment showing marginal improvement. Gold stocks, supported by operational leverage, are seeing an accelerated release of profit elasticity. In the medium to long term, with global central banks net buying gold for 22 consecutive quarters and US federal debt surpassing $39 trillion, the logic of monetary credit reassessment continues to deepen, providing structural support for gold's long-term allocation value. With the resonance of sustained high gold prices and the realization of corporate earnings, the allocation window for the gold industry chain deserves attention.
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