Hong Kong Stock Concept Tracking | Citigroup expects gold prices to rise to $3,500 by the end of the year. Domestic institutions are optimistic about gold stocks and expect them to catch up (with related stocks attached)

According to Zhitong Finance APP, gold futures hit a new all-time high on Thursday, marking the eighth consecutive trading day of rising gold prices, which have increased by 5% during this period.

David Morrison from Trade Nation stated that the dovish tone of the Federal Reserve and Fed Chairman Jerome Powell during the press conference has bolstered expectations for two interest rate cuts this year, encouraging gold buyers.

Citigroup has raised its forecast for gold futures prices over the next three months to $3,200 per ounce, an increase of $200 from the previous estimate. If concerns about worsening economic difficulties in the U.S. persist, gold prices could rise to $3,500 by the end of the year. "In our view, gold prices will reach $3,500 per ounce by year-end due to fears of a hard landing/stagflation in the U.S. and a significant increase in hedging/investment demand, which will support gold prices," Citigroup stated.

"If President Trump’s plan to lower energy prices fails to sufficiently offset tariff-driven inflation, and if the U.S. labor market deteriorates rapidly, the stock market continues to decline, and household fear levels rise... this could drive gold prices to new highs," the bank wrote.

CITIC Securities noted that since early 2025, domestic gold-listed companies' stock prices have significantly underperformed gold prices. Data shows that as of March 20, the gold stock index has risen by 11.07%, lagging behind the 15% increase in London gold spot prices.

According to Zhang Chi, chief strategist at Guojin Securities, the overall valuation of gold stocks is currently at a historical low, around 19 times.

Zhitong Finance APP learned that analysts believe the impact of rising gold prices on various segments of the industry chain is not uniform. For upstream mining companies, due to high industry concentration and maintained profit margins, they will directly benefit from the rise in gold prices.

CITIC Securities believes that the low performance of gold-listed companies in terms of earnings realization is one of the core reasons for the underperformance of gold stocks compared to gold prices in this round. They stated that the current rise in gold prices is mainly driven by risk aversion and trading factors triggered by U.S. tariff policies, and the market is skeptical about the sustainability of future gold price increases, with a pronounced fear of heights.

With domestic gold mining projects concentrated in production, 2025 may become a year of capacity release. According to CITIC Securities' estimates, the production growth rate of key domestic gold companies is expected to increase in 2025, while the trend of rising costs will be curbed, making 2025 a potential "big year" for performance growth in domestic gold companies.

Therefore, CITIC Securities believes that in the context of high gold price fluctuations, gold stocks are expected to catch up, with mining stocks that have resource reserve advantages and retail leading stocks with innovative consumption scenarios likely to become the focus of capital competition.

Hong Kong stocks related to gold and precious metals:

Zijin Mining (02899), Shandong Gold (01787), Zhaojin Mining (01818), Lingbao Gold (03330), China Gold International (02099), WanGuo Gold Group (03939), and LaoPu Gold (06181), etc