Gold stocks surge: Gold price stabilizes at $4000, valuation low opens rebound window

Recently, Hong Kong gold stocks have performed strongly, with multiple gold stocks surging collectively. Among them, China Gold International rose 6.5%, Zhaojin Mining rose 5.4%, Zijin Gold International rose 4.4%, Chifeng Gold rose 3.5%, while Zijin Mining and Shandong Gold each gained nearly 2%. Jihe Gold and Lingbao Gold also followed the uptrend. Behind this rally, international gold prices have successfully stabilized at the key psychological level of $4000 after earlier adjustments, providing solid price support for the gold sector.

1. Gold price stabilizes at $4000: A key turning point from oversold to recovery

International gold prices have recently fluctuated in a narrow range near $4000. Data shows that New York gold futures closed at $4012, while spot gold stood at $4014. This price level has significant technical and psychological importance—the $4000 threshold is not merely a round number but also a balance point between bullish and bearish forces. Before this, gold prices experienced deep overshooting, and market sentiment was once depressed. However, with this key level successfully defended, market confidence is gradually recovering.

From a macro perspective, this round of gold price adjustment was mainly driven by factors such as a stronger dollar, changes in interest rate expectations, and fluctuations in risk appetite. But it is worth noting that the underlying logic of gold as a safe-haven asset has not changed. Global inflationary pressures persist, geopolitical risks continue, and central bank gold buying demand remains strong—these long-term supporting factors are still solid. Therefore, when gold prices fell to relatively low levels, it actually provided a window for medium-term investors to position themselves.

The chart above shows the recent fluctuation path of gold prices. It can be seen that after a sharp decline, gold prices found strong support at the $4000 zone and began to stabilize and recover. This pattern of "bottom-finding, stabilization, and recovery" often signals the formation of a phase bottom.

2. Gold stocks usher in valuation repair: From 'low ground' to 'elasticity'

After a deep correction in the first half of the year, the overall valuation of the gold sector has fallen significantly to historical lows. This valuation compression provides ample room for subsequent rebounds. As pointed out by Zhongtai Securities, after the adjustment, the valuation levels of mine gold companies now have high odds. That is, buying gold stocks at current levels offers far greater upside potential than downside risk.

More importantly, gold stocks are not just 'followers' of gold prices but 'amplifiers'. Research from CICC explicitly states that gold stocks tend to rise more during gold price rebounds, demonstrating significant profit elasticity and growth attributes. The logic behind this is the unique operating leverage effect of gold mining companies: for each certain percentage increase in gold prices, due to relatively stable fixed costs, the net profit of mine gold companies often rises even more, thereby releasing stock price elasticity.

In terms of individual stock performance, the leading gainers such as China Gold International, Zhaojin Mining, and Zijin Gold International typically have advantages in resource reserves, production cost control, and capacity expansion. These companies can maximize benefits during an uptrend in gold prices, thus gaining higher valuation premiums from the market.

3. Institutional views: Gold stocks are the 'best vehicle' for gold price uptrend

Besides Zhongtai Securities and CICC, many institutions have recently expressed optimism about the gold sector. Institutions generally believe that gold prices gaining support at the $4000 level means that the earlier oversold conditions have been largely digested, and market sentiment is shifting from bearish to neutral to positive. For investors, the current valuation level of gold stocks offers a high margin of safety.

From historical experience, there is often a 'leading-lagging' relationship between gold stocks and gold prices. In the early stage of a gold price rally, market attention to gold stocks increases, funds flow in, and stock prices lead the way upward. As gold prices further confirm an upward trend, the gains in gold stocks usually exceed those in gold prices themselves. This 'leverage effect' is the core source of attraction for gold stocks.

Moreover, major central banks around the world continue to increase their gold reserves, providing structural support for gold prices. Central banks in emerging market economies, amid the de-dollarization trend, are increasing the proportion of gold in reserve assets. This flow-level demand enables gold prices to gain support at relatively high levels during pullbacks.

4. Investment outlook: Seizing dual opportunities of low valuation and price elasticity

Looking ahead, the investment value of the gold sector is mainly reflected in two aspects: first, the opportunity for valuation repair—returning from current historical lows to reasonable valuation levels; second, the profit elasticity brought by further gold price increases. If gold prices can hold above $4000 and expand upward, the performance and stock prices of gold companies will experience significant improvement.

Of course, investors also need to watch potential risks. Short-term fluctuations in gold prices may still be affected by factors such as dollar trends, interest rate policies, and risk appetite. However, from a medium-term perspective, gold's safe-haven attribute, central bank buying demand, and inflation hedging function together constitute core support for gold prices. As long as these factors do not fundamentally reverse, the allocation value of gold stocks remains prominent.

In summary, the current gold sector is at a multi-resonance window of 'low valuation + gold price stabilization + elasticity release'. For investors who recognize the long-term logic of gold, this may be a timing worth seizing. After the deep correction in the first half of the year, gold stocks are re-entering the market's view with better cost-effectiveness.