Gold-related equities are experiencing broad-based gains. At the time of writing, Chifeng Gold (06693) has risen 8.03% to HK$30. Lingbao Gold (03330) is up 7.26% to HK$17.87. Zijin Mining Group International (02259) has increased by 5.45%, trading at HK$114.1. Shandong Gold Mining (01787) has gained 2.85% to reach HK$19.48.
The catalyst for this movement is the price of spot gold, which climbed above the $4,100 per ounce mark on July 22, marking its first time at this level in a week.
Supporting the market, data shows that China's gold reserves reached 75.44 million ounces by the end of June, an increase of 480,000 ounces from the previous month. This represents the central bank's 20th consecutive month of adding to its gold holdings.
Analysis from Goldman Sachs suggests that despite pressure from a potentially more restrictive Federal Reserve policy outlook, central bank purchases are expected to provide a solid floor for gold prices.
Additional commentary points out that in the short term, gold prices have stabilized as expectations for further interest rate hikes have moderated, influenced by softer-than-expected non-farm payroll and CPI data, alongside dovish signals from policymakers. While geopolitical tensions in the Middle East may exert some downward pressure, the long-term outlook remains positive. Analysts highlight an ongoing reshaping of the global monetary trust landscape. Following the passage of significant U.S. spending bills, the country's fiscal deficit is projected to rise. Given that China's current gold reserves are considered relatively low, the trend of central bank gold buying is viewed as a long-term phenomenon, which should continue to push the average price of gold higher. The valuation of the precious metals sector is currently positioned at the lower end of its historical range.
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