Gold, Copper Prices Surge Amid Tight Supplies, Central Banks' Demand
International gold and copper prices have surged in recent times, driving collective gains in Hong Kong-listed mining stocks. According to Caixin Global on August 7, Lingbao Gold (03330.HK) rose more than 7%, while Jiangxi Copper Company Limited (00358.HK) gained over 4%. Zijin Mining (02899.HK) also saw increases exceeding 3%.
The rally in gold and copper prices can be attributed to tight supply-demand fundamentals. Codelco, the world's largest copper mining company, has missed production targets for seven consecutive years and is projected to have an output shortfall of over 300,000 tonnes by 2026. This has led to a negative global copper mine supply growth forecast for 2026.
Gold prices have also been boosted by central banks globally purchasing a net 289 tonnes of gold in Q2 this year, a 62% year-on-year increase and the highest level for any second quarter on record. The World Gold Council notes that gold's appeal as a safe-haven asset remains robust due to global reserve diversification and demand for hedging against geopolitical risks.
The ban on exports of copper and cobalt concentrates by the Democratic Republic of Congo (DRC) has also had a near-term catalyst effect on the non-ferrous metals sector. Additionally, surging AI-related demand is driving up prices for tin, copper, indium, germanium, and other non-ferrous metals.