International gold prices hit a new high. Why did gold mining stocks take the lead in pulling back?| Market Watch

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The Federal Reserve may cut interest rates continuously, which will support the medium-and long-termgold price.
The market's long-awaited interest rate cut by the Federal Reserve is about to come, and the US dollar index continues to fall. On the evening of September 16, Beijing time, London gold once exceeded US$3700 per ounce. The international gold price hit a record high for many days in a row. However, on the morning of September 17, gold mining stocks fell against the market.
As of the close of early trading, leading stock Zijin Mining (601899.SH, 02899.HK) fell 1.22% to close at 25.01 yuan, which has been falling for four consecutive days; Shandong Gold (600547.SH, 01787.HK) fell 1.22% to close at 37.3 yuan, a cumulative correction of nearly 10% from the September 9 high; Chifeng Gold (600988.SH, 06693.HK) fell 3.72% in the morning to close at 28.28 yuan.
Industry insiders believe that gold mining stocks have previously risen ahead of gold, which has already reflected most expectations for a rise in gold prices. It is expected that gold and gold mining stocks will continue to adjust in the short term after the U.S. interest rate cuts are cashed in the early morning of the 18th; in the long run, due to the Federal Reserve's continuous interest rate cuts and other reasons, gold still has room for medium-and long-term growth. For stable investors, allocating gold ETF is a more ideal choice than gold mining stocks.
Li Zeming, investment director of Red Ant Capital, analyzed to First Finance and Economics that the performance of gold mining stocks is definitely related to the price of gold, but the pace of ups and downs is not completely consistent. This round of gold mining stocks led the rise in gold prices, which has long reflected the recent increase in gold prices. In addition, most of the income sources of gold mining stocks include non-ferrous metals such as copper in addition to gold. Affected by global economic factors, in the short term, after the U.S. interest rate cut cashed in the early morning of the 18th, it is expected that there will be adjustment pressure on gold prices, and gold mining stocks may continue to fall. Looking for support position.
Yu Fenghui, an consultant at the Hong Kong Stock 100 Research Center, believes that although gold prices continue to surge, the recent weak decline in gold mining stocks is mainly due to market adjustments in future profit expectations of these companies and short-term cash cashing, which has led to correction pressure on stock prices. Some investors chose to lock in profits after seeing a sharp rise in stock prices, resulting in an increase in selling. Looking to the future, gold prices are affected by multiple factors, including the global economic situation, monetary policy changes and geopolitical risks. If economic uncertainty increases or inflationary pressures rise, gold prices are expected to continue to be supported. However, for gold mining stocks, in addition to the impact of the gold price itself, each company's own operating efficiency also needs to be considered.
Li Qian, investment consultant of Huiyan Intelligent Investment Technology Co., Ltd., said that gold prices have hit new highs recently, but gold stocks have experienced high stagflation and accompanied by selling. The reason is that there is a "fear of heights" sentiment in the market. Both gold prices and related targets are at historical highs., profit-making markets have been released in a concentrated manner; leading stocks such as Shandong Gold and Zijin Mining have continued to be slow for two to three years, and the current valuation level allows some short-term funds to choose to cash in.
In addition, a number of gold mining companies have recently seized the opportunity to raise funds in Hong Kong. On September 9, Shandong Gold completed nearly HK$3.9 billion in placement financing; Zijin Mining has announced a spin-off plan; earlier, Chifeng Gold's financing for an IPO in Hong Kong stocks exceeding HK$2.8 billion has been completed; Zhaojin Mining (01818.HK) has also raised two consecutive rights issues within one year, raising nearly HK$2 billion and HK$1.7 billion respectively.
The US dollar continues to weaken, and gold still has room to rise
Li Qian said that another factor in the correction of gold mining stocks is that the market has certain expectations for a short-term correction of gold prices, which has led investors to become cautious in trading. The historical cycle shows that after the Federal Reserve's interest rate cut, liquidity is loose or provides mid-line support for precious metals. It is recommended to continue to pay attention after the gold correction.
He believes that after the short-term correction, conservative investors are advised to consider gold ETFs. The Federal Reserve's interest rate cut will still have a stimulating effect on energy metals. In the medium and long term, the price of gold will still fluctuate upward. Investors who have special research on individual stocks can also invest in corresponding gold mining stocks.
Yu Fenghui suggested that in terms of allocation, gold ETFs have lower risks and more stable returns than gold mining stocks because they directly track the performance of gold prices and are not affected by the operating conditions of individual gold mining companies. The gold mining stock ETF provides a basket of investment portfolios of gold mining companies, spreading the risks of individual stocks, but still faces industry-specific risks, such as rising production costs and policy changes. Therefore, conservative investors are more suitable for choosing gold ETFs, while investors who are willing to take more risk in pursuit of higher returns may prefer gold mining stocks or gold mining stock ETFs.
"Driven by expectations of interest rate cuts, boosted by lower non-agricultural data and stable inflation data.Regarding the recent rise in gold prices, Wang Xiang, fund manager of Boshi Fund, explained that the Federal Reserve's interest-rate negotiation meeting is about to be held, and the first interest rate cut is about to be implemented. The two-year US bond has already priced the expectation of cutting interest rates three times during the year. Investors need to focus on the interest-rate negotiation at the end of the quarter. The meeting's guidance on the follow-up path. Wang Xiang said that the interest rate cut cycle has begun. Although the pace of short-term interest rate cuts will affect the fluctuation path of gold, he is more optimistic about the overall space for subsequent interest rate cuts. In 2026, the president-oriented seats may account for an absolute majority of the Fed's voting committee. The risk of the Fed's independence will not only affect the forward interest rate path, but also support the narrative of the dollar's credit contraction. Correspondingly, the European Central Bank kept interest rates unchanged for two consecutive meetings, believing that current inflationary pressures have been effectively controlled, and that with this decline, the weak exchange rate of the US dollar will remain with a high probability.