Despite all the hype surrounding theartificial intelligence which led to achip stocks surge this year, there are those who have done better: they are the gold mining companies which actually turned out to be a better investment.
The sub-index relating to the global gold stocks, Within the MSCI superindex, it has recorded an increase of around 135% since the beginning of the year, taking into account the extraordinary rise of the precious metal, and is on track for its best outperformance ever, while the index of the main global semiconductor companies shows an increase of “only” 40%.
The surprisingly wide gap underscores a key dynamic in global markets this year: While a sense of “Fomo” (fear of being left out) has driven investors to chase gains in anything AI-related, they are also drawn to the relentless gold rally also supported by the continuous accumulation by the central banks around the world.
“Gold and gold mining companies represent one of my most optimistic thematic forecasts in the medium term,” said Anna Wu, cross-asset investment strategist at Van Eck Associates Corp. in Sydney, as reported BloombergGold has safe-haven appeal, “while gold mining companies are poised to benefit from margin expansion and appreciation,” he added.
The himself rose over 45% this year, hitting a series of new all-time highs and heading for its best year since 1979. In addition to central bank purchases, the metal was also supported by Federal Reserve rate cuts, from the trend to de-dollarization and from the increase in shareholdings in funds traded on the stock exchange backed by gold.
Among the heavyweights of the MSCI index of gold mining companies, are to be noted Newmont e Agnico Eagle Mines who have seen their securities listed At New York more than double by 2025. The shares of Zijin mining Group Co. jumped more than 130% in Hong Kong, outpacing the gains of Chinese artificial intelligence favorite Alibaba Group Holding Ltd.
Fewer fears of a bubble, with less challenging multiples
For those who continue to watch the tech sector's surge with some fear that it might fizzle out, valuations are much less worrying for the metals sector. MSCI Gold Miner trades at 13 times future earnings estimates, slightly below the average of the last five years. On the contrary, thechip index stands at 29 times higher, well above the five-year average.
"Even after a near-vertical move in the yellow metal, mining company multiples look undemanding because earnings have risen faster than prices," says Charu Chanana, head of investment at Saxo Markets in Singapore. "If gold remains near record levels, cash flow calculations continue to support high margins."
