The gold market has been incredibly hot over the past year. I’ve been observing this wave of行情, and I’ve noticed many investors are starting to shift their focus to gold concept stocks, hoping to share in the gains. Instead of just holding physical gold, it’s better to look at leading companies recommended in gold stocks, as their profit potential is often more aggressive.

Last year’s gold price rally was truly wild. In just a few months, it hit a new all-time high over twenty times, with the price breaking through the $3,500 mark, a 15% increase. The main drivers were a few factors: geopolitical tensions boosting safe-haven demand, Fed rate cut expectations weakening the dollar, and global central banks continuing to buy gold. The supply and demand structure has also become tighter, with mineral supplies limited, all supporting gold prices.

Interestingly, this gold price surge was directly reflected in related concept stocks. For example, Canadian mining giant Newmont (NEM) surged over 30% last year, South African old-timer DRDGold rose 57%, and Alamos Gold maintained a 27% increase even after a correction. The SPDR Gold Shares ETF (GLD), which tracks spot gold prices, also approached a 20% return at the start of the year. These gold stocks recommended indeed show promising profit opportunities.

Why are gold concept stocks so attractive? Essentially, it’s leverage. The profitability of gold mining companies is highly correlated with gold prices. When gold prices rise, these companies’ profits often increase far more than the gold price itself. Take Newmont as an example: its net profit in the first quarter last year exploded 11 times compared to the same period last year, with earnings per share of $1.68, far exceeding market expectations. Despite gold production dropping 8.3%, driven by the gold price soaring to a record high of $2,944, their profitability remained strong.

Barrick Gold (GOLD) also performed well, with first-quarter gold production reaching 758k ounces, and revenue hitting $3.13 billion, up 13.8% year-over-year. More importantly, the average realized price rose from $2,075 to $2,898, resulting in an adjusted EPS of $0.35, surpassing analyst estimates.

Besides traditional mining companies, streaming companies like Wheaton Precious Metals (WPM) are also worth watching. They don’t mine directly but sign precious metal purchase agreements with mines worldwide, enjoying discounts. Last year’s first quarter saw EPS of $0.55, with revenue exceeding $470 million, both beating expectations. Royal Bank of Canada even raised its target stock price from $75 to $80.

In Taiwan stocks, there are fewer gold concept stocks, but some highlights exist. Koyo Electronics (1785), a leader in precious and rare metals, reported first-quarter revenue of NT$758k, up 30.6% year-over-year, with gross profit soaring 70.6% to NT$8.24B. Jinyiding (8390), benefiting from TSMC’s supply chain expansion and rising precious metal prices, posted first-quarter revenue of NT$1.22B, with net profit attributable to the parent of NT$117 million, EPS of NT$1.22. Chia-Lung (9955), although loss-making for years, benefited from rising global precious metal prices, with first-quarter revenue of NT$320 million, up 12% year-over-year, and EPS of NT$0.38.

The logic of investing in gold concept stocks is quite clear. First, these companies directly benefit from rising gold prices, especially when inflation expectations heat up and economic uncertainties increase, boosting demand for gold as a safe haven, which drives up the stock prices. Second, the volatility of gold concept stocks is often greater than gold itself, offering higher returns during upward movements. Third, investing in these companies rather than holding physical gold avoids storage and security hassles.

Of course, it’s important to recognize the risks. Gold concept stocks are volatile, and their declines can be sharper. Also, different companies face management risks, production costs, operational efficiencies, and management difficulties, which can cause losses if a single company encounters operational problems.

If you want to enter the market, I suggest two directions. One is to buy ETFs that track gold stocks, such as VanEck Gold Miners ETF (GDX) and the small-cap gold miners ETF (GDXJ), which can effectively diversify risk. GDX leans toward large companies like Newmont and Barrick, while GDXJ focuses on small-cap stocks, so investors can choose according to their needs. The second is to buy individual stocks directly through brokers or overseas trading platforms, either US-listed gold concept stocks or domestic stocks.

Looking ahead, I think a few trends are worth noting. In the short term, gold prices may fluctuate due to trade optimism, but the long-term support factors remain—geopolitical uncertainties, de-dollarization waves, and central banks’ continued gold purchases all underpin safe-haven demand. High gold prices will stimulate miners to expand production, especially in resource-rich regions. Plus, AI and big data technologies are increasingly applied in mining, improving exploration and production efficiency, giving the entire industry strong growth momentum.

Overall, gold concept stocks are indeed a worthwhile investment focus right now. As long as you grasp industry development trends and adopt reasonable investment strategies, there are great opportunities to earn good returns in this field. Those interested can start by testing the waters with ETFs or studying the fundamentals of a few leading companies before deciding whether to buy individual stocks.