Understanding the Market | Gold stocks lead in gains as interest rate cut expectations rise, stimulating international gold prices; institutions say profit expectations for gold resource stocks have strengthened
Gold stocks have seen significant gains, with CHI SILVER GP rising 10.64%, ZHAOJIN MINING up 6.8%, and SD GOLD increasing by 6.2%. As expectations for interest rate cuts heat up, JP Morgan predicts that gold prices will reach $3,675 per ounce by the end of the year, potentially hitting $4,000 per ounce early next year. Huaxi Securities points out that intensified inflation and interest rate cuts may drive up gold prices, enhancing profit expectations for gold resource stocks, which are currently undervalued, and recommends paying attention to opportunities for gold stock allocation
According to Zhitong Finance APP, gold stocks are among the top gainers. As of the time of publication, CHI SILVER GP (00815) rose by 10.64% to HKD 0.52; ZHAOJIN MINING (01818) increased by 6.8% to HKD 25.74; SD GOLD (01787) went up by 6.2% to HKD 31.18; Chifeng Jilong Gold Mining (06693) climbed by 4.98% to HKD 27.42; and Zijin Mining (02899) rose by 4.14% to HKD 26.6.
On the news front, on September 1, spot gold touched USD 3,450. It is reported that U.S. President Trump is attempting to remove Federal Reserve Governor Lisa Cook, a move that has raised legal questions. JP Morgan stated that the independence of the Federal Reserve continues to be threatened, and the deterioration of U.S. non-farm payroll data will be the strongest bullish catalyst for gold prices. In an optimistic scenario, JP Morgan expects gold prices to move towards the year-end target of USD 3,675 per ounce, with expectations of reaching USD 4,000 per ounce as early as next year.
Huaxi Securities pointed out that as tariffs impact the U.S. economy, consumer concerns about inflation will also intensify. In an environment of rising inflation, potential interest rate cuts create fertile ground for the depreciation of the dollar. Lowering interest rates in a persistently high inflation environment is likely to push up gold prices. In the long term, global concerns about currency and debt make gold benefit from the trading direction of debt and monetary easing. The passage of the "Big and Beautiful" bill is expected to increase the U.S. fiscal deficit by USD 3.4 trillion, which is favorable for future gold prices. Benefiting from rising gold prices, the profit expectations for gold resource stocks have strengthened, and the current valuation of gold stocks is at a low level, presenting opportunities for gold stock allocation
