Gold stocks soar as metal regains shine

Poh Kong (pic) was also one of the top gainers on the local stock exchange, alongside another well-known jeweller Tomei Consolidated Bhd.

PETALING JAYA: Gold-related stocks on Bursa Malaysia are once again back on investors’ radar as the price of the precious yellow metal rose to its highest level in 14-weeks.

Listed jewellers Poh Kong Holdings Bhd and Niche Capital Emas Holdings Bhd, as well as gold miner Bahvest Resources Bhd were among the most active equities yesterday.

Poh Kong was also one of the top gainers on the local stock exchange, alongside another well-known jeweller Tomei Consolidated Bhd.(pic below)

Property developer Yong Tai Bhd, which only announced in March 2021 its venture into gold mining on a 100-ha site in Pahang, also saw an uptick in its share price.

Despite yesterday’s poor stock market performance, where a total of 1,061 decliners trumped 195 gainers, gold-related stocks were mostly up by the time the market closed.

Shares of Tomei jumped by almost 30% to RM1.31, while Poh Kong rose by about 27% to RM1.04.

Bahvest increased 5.15% to 51 sen and Yong Tai was up 2% to 25.5 sen.

Despite the renewed investor interest in gold-related stocks, two listed companies in the industry, namely, Borneo Oil Bhd and Zhulian Corp Bhd fell 12.5% to 3.5 sen and 3.14% to RM1.85, respectively.

Yesterday, gold spot prices exceeded US$1,850 (approximately RM7,644) per ounce, marking an increase of almost 7% since March 2021.

The last time gold prices hovered around current levels was in early February this year.

Gold prices in recent weeks have been boosted by the weaker US dollar and falling Treasury yields in the United States.

An analyst who spoke to StarBiz said that the return of inflation globally also led to the higher gold prices.

“Gold is often seen as a hedge against inflation. When the US dollar weakens, naturally investors would consider gold as an alternative.

“Looking ahead, stronger inflation and more uncertainties globally revolving around Covid-19 may further strengthen gold prices as investors try to hedge risk, ” the analyst said.

He added that the gold-buying spree by central banks and consumers in China and India, following a dip in gold prices since August last year, has also driven the demand for the bullion.

Late last month, Bloomberg reported that India’s gold imports from Switzerland in March 2021 rose to the highest in almost eight years as jewellery buyers took advantage of the lower gold prices.

Meanwhile, China’s gold imports from Switzerland surged nearly four-fold to a seven-month high following the resumption of purchases in February. Quoting sources, Bloomberg said China’s central bank is approving imports of about 75 tonnes a month to meet domestic consumption.