'Everything Rally' Lifts Gold and Silver... Mining Stocks Rise Alongside

Liquidity-driven market after U.S. rate cuts

Gold and silver ETFs up in the 20% range over one month

Mining-stock products rose even more

ETFs linked to precious metal commodities such as gold and silver and related mining-stock ETFs are surging. The liquidity-driven market following rate cuts by the U.S. central bank (Fed) has led to a simultaneous increase in demand for safe-haven assets.

On the 29th, according to the Korea Exchange, 'ACE KRX Gold Spot', which invests in physical gold, rose 21.66% over the past month. In the same period, 'KODEX Silver Futures(H)' rose 19.59%. 'HANARO Global Gold Mining Companies' surged 22.86% during this period, showing a higher rate of increase than gold. This ETF invests in major global gold mining companies such as Newmont and Agnico Eagle Mines. When gold prices rise, mining companies' profitability improves, and their stock prices also rise accordingly.

The simultaneous rise in gold, silver, and related mining stocks is due to expanded liquidity from U.S. rate cuts. Analysts say an 'everything rally'—in which both risk assets, on expectations of economic recovery, and safe-haven assets, amid inflation concerns, rise together—is unfolding. Hwang Byung-jin of NH Investment & Securities said, "Gold and silver are representative inflation-hedge assets, and their investment appeal is increasing," adding, "If the Fed's accommodative monetary policy continues, the bullish trend in precious metals will also continue."

Attention is also being paid to the further upside potential in mining companies' stock prices alongside rising precious metal prices. Hwang said, "Mining companies can see greater profit expansion from rising commodity prices and benefit from the overall stock market uptrend, so ETF returns can be higher than spot prices," and "It is likely that the positive trend in mining-stock ETFs will continue."

Maeng Jin-gyu, reporter maeng@hankyung.com