Real estate and stocks all rising in 'everything rally'…"Gold, silver, and mining stocks benefit"

Precious metal commodities such as gold and silver and related mining stock exchange-traded funds (ETFs) are surging. The gains are continuing as beneficiaries of the 'everything rally (all assets rising)' brought by interest rate cuts by the U.S. central bank (Fed).

On the 29th, according to the Korea Exchange, the 'ACE KRX Gold Spot ETF' that invests in physical gold rose 21.66% over the past month. Over the same period, the 'KODEX Silver Futures (H) ETF' rose 19.59%. 'HANARO Global Gold Mining Companies' jumped 22.86% during that period, showing a higher rate of increase than gold. This ETF is a product that contains major global gold mining companies such as Newmont and Agnico Eagle Mines.

The reason gold and silver as well as related mining stocks are showing a concurrent rally is that a liquidity-driven market is unfolding due to U.S. rate cuts. With increased liquidity, both risk assets and safe-haven assets are rising. There is also a concern that if the policy rate falls while inflation risk remains high, the pace of price increases could accelerate again. In such a situation, demand for representative safe-haven assets like gold grows to hedge against inflation.

Hwang Byung-jin, a researcher at NH Investment & Securities, said, "As a representative safe-haven and inflation-hedge asset, the investment appeal of gold and silver is expanding," and added, "As long as the Fed's monetary policy easing stance is maintained, the bullish outlook for precious metals prices such as gold and silver remains valid."

There is also analysis that the upside potential of gold and silver mining companies' stocks is greater. This is because precious metals price momentum, stock market gains, and improvements in mining margins are being reflected simultaneously. Researcher Hwang predicted, "In a phase of rising precious metals prices and expanding profits for mining companies, positive performance from investing in mining stock ETFs is expected to continue."

Reporter Maeng Jin-gyu maeng@hankyung.com