Core view
The market performance of non-ferrous metal industry is better than the market, and it is in the forefront of all first-class industries. In the first quarter of 2022, CITIC nonferrous metals index (ci005003) closed at 7141.8 points, down 7.9% in the whole quarter, and the performance of the sector was better than that of Shanghai stock index and Shanghai Shenzhen 300. In terms of industry ranking, CITIC nonferrous metals industry ranks eighth in terms of rise and fall in all industries. Among the sub sectors, the gold sector rose 13.2%, the only sector in the industry that rose in the first quarter; In terms of individual stocks, in the first quarter of 2022, six of the eight major A-share gold enterprises rose, namely: Chifeng Jilong Gold Mining Co.Ltd(600988) , Zijin Mining Group Company Limited(601899) , Western Region Gold Co.Ltd(601069) , Shandong Gold Mining Co.Ltd(600547) , Yintai Gold Co.Ltd(000975) , Hunan Gold Corporation Limited(002155) , with increases of 21.68%, 16.91%, 14.89%, 14.24%, 6.04% and 2.51% respectively Chifeng Jilong Gold Mining Co.Ltd(600988) the increase ranks first in the industry.
With the rise of gold price, gold enterprises ushered in the rise of both volume and price in the first quarter. From the perspective of gold price, the international situation in the first quarter of 2022 is relatively complex, and the conflict between Russia and Ukraine continues to evolve. With the rise of global risk aversion, the global gold price showed a continuous upward trend in the first quarter of 2022. Among them, the London gold price was closer to the previous high on March 8, 2022, closing at US $2050.2/ounce. As of March 31, 2022, the current price of London gold closed at US $1936.9/oz. At present, the gold price is at the quantile level of 94.3% of its historical price range, constantly approaching the previous high. At the average price level, the average price of London gold in the first quarter of 2022 was about US $1878.4/oz, up 4.6% month on month compared with the previous quarter. Under the overall upward trend of gold price, gold enterprises are expected to have a brighter performance in the first quarter of 2022. At the project level of gold enterprises, according to the announcement of major A-share gold enterprises, from the fourth quarter of 2021 to the first quarter of 2022, Zijin Mining Group Company Limited(601899) the chukalu PEGI copper gold mine in Serbia was officially put into operation Chifeng Jilong Gold Mining Co.Ltd(600988) complete the delivery of wassa gold mine. The successive production and resumption of production of relevant projects will promote the performance of gold enterprises in the first quarter of 2022.
Short, medium and long-term factors catalyze resonance, and the gold industry welcomes the allocation opportunity. In the short term, the Fed’s interest rate hike process has begun. Looking back on the past interest rate hike process, the average rise and fall of gold in the first year and the first half of the year after the interest rate hike were 6.67% and 7.81% respectively. The release of risk factors significantly promoted the gold price. In the medium term, the current stagflation expectation is strong. In February 2022, the CPI of the United States increased by 7.9% year-on-year, reaching a new high in 40 years. As of March 31, the interest rate spread of us two-year-10-year treasury bonds had fallen to 0.04%. In the long run, the sanctions against Russia from Europe, America and other countries continue to escalate. At present, Russia has restricted the use of swift and some foreign exchange in the financial field. In this context, it is expected that the proportion of the US dollar in the global foreign exchange reserves will accelerate downward on the basis of 59.2% in the third quarter of 2021, and the foreign exchange reserves of countries around the world will gradually move closer to physical assets such as gold, thus driving the demand for gold reserves to rise.
Investment advice
Under the background of the global geopolitical turmoil and the continuous upward inflation in Europe, America and other countries, the global gold price showed a relatively strong performance in the first quarter of 2022, driving the strong performance of the gold sector market. Looking forward to the future, the driving force of gold price rise is still there. With the production and resumption of relevant projects of gold enterprises, gold enterprises may continue to benefit in the future, including Zijin Mining Group Company Limited(601899) , Chifeng Jilong Gold Mining Co.Ltd(600988) , Shandong Gold Mining Co.Ltd(600547) , etc.
Risk tips
Commodity prices fluctuated abnormally, the construction progress of new projects was less than expected, and International Geopolitics changed.
