Since the beginning of this year, the price of gold has risen by more than 29%, and the optimistic sentiment of rate cuts in the USA has further boosted the recent uptrend. Benefiting from the continuous rise in the price of gold, many listed gold mining companies are expected to have satisfactory performance in the first three quarters.

Both Hong Kong and A-shares' gold stocks rose, with SD Gold up by 4.56%, Zhaojin Mining, Lingbao Gold, and Zijin Mining rising over 3%.

In the A-share market, Beijing Xiaocheng Technology rose by over 8%, sichuan gold, Shandong Gold International, and Chifeng Jilong Gold rose over 3%, while SD Gold, Zhongjin Gold, and Western Region Gold followed the trend.

Many mining companies are expected to have good performance in the first three quarters.

Recently, many gold mining companies have released performance forecasts for the first three quarters. Among them, SD Gold's performance forecast released on October 14 shows that, based on preliminary calculations, the net income attributable to the owners of the parent company is expected to be between 1.85 billion yuan and 2.25 billion yuan in the 1st to 3rd quarters of 2024, an increase of 0.505 billion to 0.905 billion compared to the same period last year, a year-on-year increase of 37.52% to 67.26%.

It is expected that the non-GAAP net profit attributable to the owners of the parent company for the first three quarters of 2024 will be between 1.877 billion yuan and 2.277 billion yuan, an increase of 0.597 billion yuan to 0.997 billion yuan compared to the same period of the previous year, a year-on-year increase of 46.68% to 77.93%.

The performance forecast disclosed by Shandong Gold International shows that the net profit attributable to the shareholders of the listed company for the first three quarters is expected to be between 1.68 billion yuan and 1.73 billion yuan, an increase of 50.22% to 54.69% compared to the same period of the previous year; it is expected to achieve a non-GAAP net profit of 1.7 billion yuan to 1.8 billion yuan, an increase of 56.32% to 65.51% compared to the same period of the previous year; the expected basic earnings per share are between 0.605 yuan and 0.623 yuan.

The announcement released by Hunan Gold on October 14th shows that the net profit attributable to the shareholders of the listed company for the first three quarters of 2024 is expected to be between 0.647 billion yuan and 0.689 billion yuan, an increase of 68.5% to 79.4% compared to the same period of the previous year; the expected non-GAAP net profit is between 0.651 billion yuan and 0.693 billion yuan, an increase of 68.56% to 79.52% compared to the same period of the previous year; the expected basic earnings per share are between 0.54 yuan and 0.57 yuan.

From the announcements of the three companies, all mentioned the rise in the price of gold.

SD Gold pointed out that the company enhanced the role of strategic leadership in the first three quarters, highlighting the enhancement of production organization, continuously optimizing production layout, strengthening technical management and technological innovation, improving production operation rate, resource utilization rate; continuously deepening cost reduction and efficiency improvement, through technological innovation, process optimization, asset revitalization, centralized procurement, policy effectiveness, etc., enhancing the level of refined management, improving operational efficiency, stabilizing production costs; at the same time, the upward trend of gold prices in Q1-Q3 2024 and the acquisition of Shandong Gold International (formerly known as "Yintai Gold") also drove the company's profit growth.

Shandong Gold International stated that the year-on-year increase in net profit for this reporting period is mainly due to the rise in gold and silver prices and the increase in sales volume.

Hunan Gold also stated that the rise in performance during the reporting period is mainly due to the year-on-year increase in sales prices of the company's gold, antimony, and tungsten products.

Institutions: Gold prices may continue to benefit from the dual logic of Fed rate cuts and safe-haven premiums.

Since the beginning of this year, international gold prices have repeatedly hit new highs, with prices soaring over 28%; the domestic spot gold price has also reached historic highs, briefly surpassing 600 yuan/gram. As of now, London spot gold is reported at $2666.98 per ounce.

At the same time, the importance of gold as a safe-haven asset is increasingly prominent. Recently, central bank officials from countries such as Mexico, Mongolia, and the Czech Republic have openly expressed support for increasing gold reserves on different occasions.

They believe that against the backdrop of escalating geopolitical tensions and declining interest rates, the proportion of gold in national foreign exchange reserves may continue to increase in the coming years.

Looking ahead to the fourth quarter, the prospects for gold investments are still promising.

Goldman Sachs has raised its gold price forecast for early 2025 from $2700 per ounce to $2900, citing increased ETF fund flows as a result of rate cuts in the West and China, as well as increased central bank purchases.

We reiterate our recommendation to go long on gold, as the gradual reduction in global interest rates, the structural increase in central bank demand, and the benefits of gold as a hedge against geopolitical, financial, and economic recession risks will gradually boost sentiment.

Guosheng Securities also pointed out that in the medium to long term, as the economic downturn intensifies, the hedging properties of gold as a non-US asset substitute will gradually become prominent. It is expected that global central banks will continue to increase their gold holdings. Non-speculative positions will provide support for the price of gold when the Federal Reserve loosens policy less than expected or delays the interest rate cut. In the long term, the price of gold will continue to benefit from the space for interest rate cuts by the Federal Reserve and the dual-line logic of hedging premium.