Hong Kong Stock Concept Tracking | Gold breaks through $3350 to hit a new high! Gold stocks enter a window of opportunity (with concept stocks)

Due to increasing risk aversion, weakening US dollar, and heavy losses in US tech stocks, gold skyrocketed to a new high on Wednesday, with spot gold surpassing $3340 per ounce, exceeding the historical record set on Monday and now breaking through $3350. It is worth noting that this is the third time in nearly five trading days that the spot gold price has refreshed its historical record, with a daily increase of over 3%, and a cumulative increase of over 25% since the beginning of the year. Analysts say that escalating trade wars have raised concerns about a global economic recession, and uncertainty about the tariffs announced by Washington makes it difficult for investors to establish long-term positions. In this environment, gold is seen as the most favored safe-haven asset. On the news front, on Tuesday, US President Trump signed an executive order to investigate the national security risks of US reliance on imported critical minerals and their derivatives this is seen as a prelude to imposing tariffs, potentially escalating the trade war. In this environment, gold is seen as the most favored safe-haven asset. Tim Waterer, Chief Market Analyst at KCM Trade, said: Various factors, such as the devaluation of the US dollar and ongoing risk aversion, are favorable for gold. Nicholas Frappell, Global Director of Market Institution at ABC Refinery, stated that the uncertainty of tariffs, a more hardened stance by the US government, and tariffs affecting goods transported through third-party countries could damage the global supply chain, all supporting the price of gold. In addition, traders are betting that the Federal Reserve will cut interest rates at least three times this year, which is overall favorable for precious metals. Looking ahead, ANZ Bank believes that the safe-haven purchases of gold have not yet reached an accelerated state. The bank has raised its year-end gold price expectations to $3600 per ounce and its six-month gold price forecast to $3500 per ounce. Last Friday, analysts at Goldman Sachs forecasted that the price of gold will rise to $3700 per ounce by the end of this year and reach $4000 per ounce by mid-2026. As the trade war weakens the credibility of the US dollar, the upward trend in gold prices gains momentum, significantly increasing the growth prospects of gold enterprises. (1) Trump's imposition of significantly higher tariffs globally has increased concerns about the risk of a US economic recession and default on US debt, as the US dollar index rapidly declines, forming a consensus narrative on the weakening of US dollar credit, opening up valuation space for gold enterprises. (2) With the sharp increase in gold prices, the growth of gold stocks is becoming a higher probability event, strengthening market confidence in investing in gold enterprises. On the numerator side: Gold prices are expected to continue to rise, lifting enterprise EPS. In addition to increasing expectations of stagflation in the US, the US's significant imposition of tariffs globally has raised concerns about the collapse of the global monetary system. Gold, as a safe-haven asset, is becoming increasingly important, with ample upward momentum in gold prices and the profit release of gold stocks expected to be smoother. On the denominator side: The precious metals sector is at a historical low PE ratio, with potential for valuation increases. As of April 1, 2025, the PE ratio for precious metals index was 19.51, which is at the 9.17th percentile over the past ten years and at the 18.41st percentile over the past five years. The renewed momentum for gold price increases fundamentally enhances the continuity and stability of gold mining companies' performance, potentially systematically restoring the industry's PE level and offering room for valuation improvement. Tianfeng points out that the valuation of gold stocks is at the 20th percentile over the past five years, and the sector's restoration has both space and momentum, offering a window of convergence for the "scissor difference" of gold stocks. Relevant concept stocks: ZHAOJIN MINING (01818): The company possesses extremely excellent gold resources and currently has stable production from its mines. Acquisitions such as TieTUO and overseas projects provide continuous growth momentum for the company's performance. Currently, the geopolitical risk escalation has increased demand for hedging and factors such as the Fed's expected rate cuts and weakening of US dollar credit suggest that gold prices are likely to continue to rise in the medium to long term, enhancing the overall profitability of the company. Shandong Gold Mining (01787): Considering the company's inventory situation and the progress of several new and expansion projects still underway, as well as the abundant gold resources of its parent company Shandong Gold Mining Group, there are also expectations of asset injections in the future. Currently, there is still room for upward movement in gold prices. The company is forecasted to have net profit attributable to the parent company of 30.30, 50.83, and 59.38 billion yuan for 2024-2026. LINGBAO GOLD (03330): As of the end of 2023, the company's total gold reserves and resources at home and abroad were approximately 137.40 tons, with an average grade of up to 5.44g/t, with about 103.5 tons in China, mainly in Henan, Xinjiang, and Inner Mongolia, and about 34.0 tons overseas (in Kyrgyzstan). The company's Laowan gold mine in Tongbai County has rich reserves and great potential for increased reserves. From 2011 to 2019, the Laowan gold mine exploration area has completed 166 drill holes with a total length of 11.58 kilometers and a mineralization rate of 94%, indicating a gold resource of 208 tons. At the same time, the company has a global outlook and implements a "going out" strategy, establishing an overseas business unit focusing on high-quality overseas resources. Overall, the market trend suggests that gold prices are expected to continue rising and gold stock performance to increase. As concerns about the US dollar credit weaken and the importance of gold as a safe-haven asset becomes more pronounced, the upward momentum in gold prices and the release of profits in gold stocks are expected to be smoother.