Market Insight | Gold stocks continue to rise as Fed officials continue to release interest rate cut expectations, gold futures and spot prices hit new highs
Gold stocks continue to rise, with Zijin Mining up 4.25% and CHINAGOLDINTL up 4.01%. The preliminary value of the U.S. PMI in September fell to 47, indicating economic contraction. Federal Reserve officials signaled a rate cut, driving gold futures prices to a new high, with spot gold breaking through $2630 per ounce and COMEX gold futures rising to $2659.8 per ounce. Macquarie predicts that the price of gold will remain strong and recommends investors to focus on gold mining stocks, especially ZHAOJIN MINING, with a target price raised to HKD 21.3
According to the Wise Finance app, gold stocks continue their recent upward trend. As of the time of publication, Zijin Mining (02899) rose by 4.25% to HKD 16.68; CHINAGOLDINTL (02099) rose by 4.01% to HKD 35.05; Shandong Gold (01787) rose by 1.82% to HKD 16.8; Lingbao Gold (03330) rose by 1.58% to HKD 3.22.
On the news front, the preliminary value of the U.S. September Markit Manufacturing Purchasing Managers' Index (PMI) fell to 47, hitting a new low since June last year, continuing to be in the contraction zone. In addition, several Federal Reserve officials conveyed signals supporting further interest rate cuts in their speeches on Monday, making investors optimistic about the prospect of Fed rate cuts. Both spot gold and COMEX gold futures prices hit new highs. Spot gold rose above $2630 per ounce; COMEX gold futures rose to a new high of $2659.8 per ounce on the 23rd.
Macquarie pointed out that the expectation of strong gold prices will continue. In addition to benefiting from rate cuts, weak economic data will further heat up expectations of rate cuts. Although there is a short-term divergence between gold prices and gold mining stocks, the long-term correlation remains high. Therefore, gold mining stock prices are currently weak, presenting a good buying opportunity. Based on the expectation of continued strength in gold prices, the target price of gold mining stocks listed in Hong Kong has been raised. Among them, ZHAOJIN MINING is the top choice due to its strong production growth prospects, with the target price raised from HKD 21 to HKD 21.3