Chinese gold stocks set to shine as UBS and Schroders see bullion extending gains
News Summary
Chinese gold producers like Zijin Mining Group are expected to receive a boost as investment banks and asset managers, including UBS Group and Schroders, anticipate bullion's record-breaking rally to continue. Gold reclaimed the US$4,100 an ounce level this week, suggesting that last month's sharp sell-off from a record US$4,381 might have concluded. UBS Group's global wealth management unit forecasts gold will hold the US$4,200 level over the next 12 months and could reach US$4,700 if geopolitical and financial market risks escalate. Meanwhile, UK-based asset manager Schroders believes the yellow metal's price will remain underpinned by central-bank buying and growing government debt across major global economies. UBS Global Wealth Management Chief Investment Office stated in a report that strong demand, driven by global debt concerns, political uncertainty, and Federal Reserve policy easing, could drive bullion prices higher. They maintain a bullish stance on gold, viewing it as an effective portfolio diversifier and hedge. These bullish calls may present a buying opportunity for investors in gold producers, whose stock prices are highly correlated to bullion movements, despite recent consolidation in shares like Zijin Mining after last month's all-time high.
Background
Gold, a traditional safe-haven asset, typically sees increased demand during periods of market uncertainty and geopolitical tension. Throughout 2025, gold prices have been volatile, influenced by factors such as Federal Reserve monetary policy expectations, global government debt levels, and central bank demand for reserve diversification. The article notes that after a decline from an all-time high of US$4,381 last month, gold has rebounded to US$4,100 this week. The stock prices of Chinese gold producers, such as Zijin Mining, are generally highly correlated with international gold prices. As gold prices rise, these companies' profitability and share prices tend to increase. Therefore, institutional bullish forecasts for gold directly impact expectations for the future performance of these companies.
In-Depth AI Insights
In 2025, with persistent global debt and political uncertainty, does the institutional bullish stance on gold merely reflect safe-haven demand, or are there deeper strategic considerations at play? - Geopolitical risk premiums are likely to persist, or even escalate, under President Trump's re-elected administration. Trade tensions, regional conflicts, and alliance dynamics could all drive investors and central banks towards gold as a hedge against uncertainty. - The