China's Gold Miners Gain as Investors Seek Haven Amid Trade War
Published Jun 03, 2019 11:53PM ET
Updated Jun 04, 2019 12:20AM ET
China's Gold Miners Gain as Investors Seek Haven Amid Trade War
(Bloomberg) -- China’s gold stocks are the latest haven for spooked investors sheltering from trade war fallout.
Gold miners are among the top gainers on the MSCI China Index in the past five days. Zhaojin Mining Industry Co. in Hong Kong and Shandong Gold Mining Co. in Shanghai have surged at least 8.6%.
Others in the business also gained. Yintai Resources Co. and Chifeng Jilong Gold Mining Co. have risen by at least 13% since late May. Gansu Ronghua Industry Group Co. has hit the 10% daily limit for two straight days this week, and Zhongrun Resources Investment Corp., which produces minerals, was also up by the limit on Tuesday.
"The prospects of China and the U.S. moving back to the negotiating table have grown dim in the near term, after China published its white paper," said Alvin Cheung, an associate director at Prudential (LON:PRU) Brokerage Ltd. in Hong Kong, referring to a state council document addressing Beijing’s position on the trade dispute and blaming the U.S. for the breakdown in talks.
"Investors, some of whom are subject to a limit on cash holdings, are fleeing to the safest assets," Cheung said. "Equity investors are also choosing these stocks, which will benefit from the gold rally."
Companies in the gold business have benefited as escalating U.S.-China trade tensions hurt the outlook for economic growth, damping investors’ risk appetite and triggering a flight from equity markets for safer investments.
Gold eked out its biggest gain in more than four months on Monday. Spot gold has advanced 3.4% in the past five days. It was steady at $1,323.22/oz at 11:20 a.m. in Shanghai.
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Written By: Bloomberg
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