Zijin Mining(HK:02899) Zhi Tong Cai Jing·2025-10-22 10:30Core Viewpoint - The recent surge in gold prices, with a year-to-date increase of over 60%, is driven by a combination of strong demand for safe-haven assets, central bank purchases, and speculative trading behavior in the market [1][2][4]. Group 1: Gold Price Trends - Gold prices have consistently risen this year, with 9 out of 10 months showing increases, peaking at approximately $4,300 per ounce, a rise of 65.4% from around $2,600 per ounce at the beginning of the year [1]. - Following a peak of $4,398 per ounce on October 20, gold prices experienced a significant drop of over 5% the next day, raising questions about the sustainability of the upward trend [1]. Group 2: Demand Drivers - The primary drivers of the gold price increase include heightened safe-haven demand due to geopolitical tensions, ongoing inflation, and currency depreciation, leading to a substantial rise in large-scale investments in gold [2][4]. - Central banks have been increasing their gold reserves, with a Deutsche Bank report indicating that gold now accounts for 30% of global "foreign exchange + gold" reserves, reflecting a shift away from the dollar [2]. Group 3: Market Dynamics - The market is experiencing a surge in gold-themed ETFs, with record inflows of $26 billion in the third quarter of 2025, pushing total assets under management in gold ETFs to a historic high of $472 billion [4]. - In China, gold ETFs have seen significant inflows, with the Huaan Gold ETF alone attracting 6.348 billion yuan in a single week, indicating strong domestic interest in gold investments [5]. Group 4: Company Performance - Leading companies in the gold sector, such as Zijin Mining, have reported substantial revenue growth, with Zijin Mining's revenue increasing by 10.33% year-on-year and net profit rising by 55.45% [6][8]. - Other companies, like Shandong Gold, are also expected to report significant profit increases, with projections showing a year-on-year growth of 80.5% to 94.8% for the first three quarters [6]. Group 5: Investment Opportunities - The long-term upward trend in gold prices is expected to create investment opportunities in the gold sector, particularly for leading companies like Zijin Mining and smaller, high-performing firms like Chifeng Jilong Gold Mining [8][9]. - The overall positive industry cycle and strong performance of gold-related companies suggest that they will continue to attract investor interest, especially as gold remains a key asset for central banks and a preferred choice for risk-averse investors [6][9].