COMEX gold rises above $4,700, institutions: the double play of gold stocks and Davis may continue

Ask AI · How can low PE valuations of gold mining companies support the Davis double play expectation?

Recently, gold has shown signs of recovery after a pullback, with COMEX gold returning to $4,700 and Yongying Fund Gold Stock ETF (517520) fund manager Liu Tingyu stating that after fully pricing in the tightening of monetary policy expectations, gold is expected to begin trading in stagflation and weakening dollar credit in the future. The long-term investment value and logic of gold and gold stocks remain unchanged, and under the trend of de-globalization and accelerated de-dollarization, the long-term allocation value of gold is further highlighted. Short-term adjustments have actually increased the investment cost-effectiveness of gold and gold stocks.

The overall performance of gold stocks in the third quarter met expectations, and the Davis double play in 2026 may continue. Yongying Fund stated that the top ten constituent stocks of the CSI Shanghai-Shenzhen-Hong Kong Gold Stock Index are expected to have an average net profit attributable to parent company of about 86% in 2025, which is in line with market expectations and continues the high growth rate in recent years (88% in 2024 annual report and 84% in 2023 annual report). This high growth trend is attributed to the rising gold price center, combined with active expansion by gold mining companies leading to increased volume and price, based on the judgment of gold price trends in 2026 and the expansion guidance of many domestic gold mining companies. This logic is expected to continue to be fulfilled in the future. As of March 27, if calculated at a gold price of $4,500 per ounce, the average PE of major gold mining companies in 2026 is only 10-16 times, while the historical valuation center of gold mining companies is about 20 times, leaving significant room for valuation recovery. Overall, gold stocks are expected to continue to see both performance and valuation double play of the Davis effect, making their investment opportunities more worth paying attention to.

The opinions are for reference only and do not constitute investment advice.

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