Recently, I noticed a very interesting investment phenomenon. Last year, gold prices hit a new high 20 times within just a few months, and the momentum was truly impressive. I took a closer look at the underlying logic and found that the driving forces behind this rally are quite solid.

Geopolitical tensions heating up, the weakening of the US dollar’s credit foundation, and continuous central bank gold purchases—these three forces stacking together directly pushed gold prices to new heights. Especially the wave of tariff negotiations last year triggered dramatic fluctuations in gold prices. In just 8 trading days, futures prices surged by $430, an increase of over 15%, briefly breaking the psychological barrier of $3,500. Although there was a pullback later, mainstream institutions remain optimistic. They believe the long-term support factors still exist, particularly the de-dollarization trend and geopolitical risk hedging needs, which will build a solid foundation for gold prices.

This strong performance in gold prices is directly reflected in the gains of gold-related stocks. I looked at some major mining companies, like Canada’s Agnico Eagle, which broke through $89 in January and has since gained 42%; South Africa’s DRDGold soared 57%; Alamos Gold maintained a 27% increase. Gold ETFs tracking spot gold prices also approached a 20% return. These figures clearly indicate that investment opportunities in gold-related stocks are indeed not to be underestimated.

So, what are gold concept stocks? Simply put, they are listed companies whose businesses are closely related to gold. This includes mining, smelting, processing, sales, and even financial services across the entire industry chain. The performance of these companies is often strongly correlated with gold price trends. When gold prices rise, the profitability of mining companies improves significantly, and their stock prices tend to go up. However, it’s important to note that gold-related stocks tend to be much more volatile than gold itself. A 20% increase in gold price might lead to a 30-40% rise in related stocks, but conversely, when prices fall, the decline can be even sharper.

I categorized these companies along the industry chain. Upstream mainly includes mining and smelting firms, like Newmont and Barrick Gold, which are global giants. Midstream involves some royalty companies that don’t mine themselves but earn revenue through agreements with mines; Wheaton Precious Metals is a typical example. Downstream includes jewelry manufacturers and processing companies.

Looking at specific company performance, Newmont’s net profit in Q1 last year reached $1.9 billion, nearly 11 times the previous year, with earnings per share of $1.68, far exceeding expectations. Although gold production slightly declined, the price soared to a historic high of $2,944 per ounce, directly driving a significant increase in profitability. Barrick Gold also performed well, with Q1 revenue of $3.13 billion, up 13.8% from the previous year, with an average realized price rising from $2,075 to $2,898, surpassing analyst forecasts. Wheaton Precious Metals exemplifies another model, with EPS of $0.55, revenue surpassing $470 million, all better than market expectations.

In Taiwan, there are fewer gold-related stocks to choose from, mainly three: KYOCERA, King Yik Ding, and Chia Long. KYOCERA is a major manufacturer of precious metal materials, with Q1 revenue of NT$8.24B, up 30.6% year-over-year, with gross profit and profit soaring by 70% and 145%, respectively. King Yik Ding is a large resource recycling company, with precious metal recycling accounting for 30%; last year’s Q1 consolidated revenue was NT$1.11B, with all indicators showing clear growth. Although Chia Long has been unprofitable for years and has not paid dividends, its high proportion of precious metal business makes it more likely to benefit from rising gold prices; Q1 revenue was about NT$320 million, up 12% year-over-year.

Many factors influence the performance of gold-related stocks. The most direct is of course the gold price itself, but there are also multiple dimensions such as the global economic situation, central bank policies, production costs, and supply-demand dynamics. Low interest rate environments generally favor gold prices because they reduce the opportunity cost of holding gold. Conversely, during periods of high interest rates, investors may shift to higher-yield assets. Production costs and operational efficiency are also critical; technological advances can lower costs and increase profit margins. The ongoing central bank gold purchases are also a long-term support factor; last year, official gold buying continued to exceed 1,000 tons for the third consecutive year.

If you want to invest in gold-related stocks, there are several methods. One is through ETFs to diversify risk, such as VanEck’s Gold Miners ETF (GDX) and the Small Cap Gold Miners ETF (GDXJ), which include components of global large and small gold companies. GDX leans toward big firms like Newmont and Barrick Gold, while GDXJ focuses on small-cap companies. Another approach is to buy individual stocks directly, which can be done via overseas brokers or through repatriation if investing in US stocks.

The advantages of investing in gold-related stocks include benefiting from gold price increases, often with stocks rising more than gold itself. It also helps diversify assets; during economic downturns or cyclical stock declines, gold-related stocks tend to perform well, providing risk mitigation. However, the downside is higher volatility, with larger swings both up and down. Additionally, investors must bear company management risks, including production costs, operational efficiency, and regulatory constraints.

Looking ahead, I believe there are still many opportunities in gold-related stocks. On one hand, the long-term factors driving gold prices upward remain, with ongoing geopolitical tensions such as the Russia-Ukraine conflict, Middle East instability, and US-China trade negotiations continuing to support safe-haven demand. On the other hand, high gold prices will stimulate miners to expand capacity, especially in resource-rich regions like Africa, Australia, and South America. The global gold mining industry is expected to grow steadily in the coming years, with Asia and North America being key growth markets. Moreover, AI and big data technologies are revolutionizing gold exploration and production, improving efficiency across the entire process, which will enhance miners’ profitability.

In summary, gold-related stocks are indeed a promising investment direction in today’s capital markets. As long as you grasp industry development trends and adopt reasonable investment strategies, there’s a good chance to achieve solid returns. Of course, it’s essential to understand your risk tolerance and choose suitable targets and methods based on your investment goals.