China’s Zijin Gold International has made a remarkable debut on the Hong Kong stock exchange, with its shares surging over 60% on Tuesday. The company, a unit of Zijin Mining, China’s largest miner, raised more than $3 billion in one of the world’s biggest initial public offerings this year. This significant increase in share price can be attributed to the current high demand for gold, which has been driven by market volatility and expectations of US interest rate cuts.
The price of gold has continued to reach record highs, with the precious metal reaching a peak of $3,867.89 on Tuesday. Analysts predict that gold prices could soon reach $4,000, having already increased by almost 50% since the start of the year. The prospect of a US government shutdown and expected interest rate cuts have also contributed to the upward surge in gold prices.
Zijin Gold, one of the world’s fastest-growing gold producers, has interests in eight mines across Central Asia, South America, Oceania, and Africa. The company has extensive experience in global mergers and acquisitions and has a strong track record of cost management, with several of its mines becoming profitable shortly after acquisition. The proceeds from the initial public offering will be used to settle the acquisition of a gold mine in Kazakhstan and to upgrade and construct existing mines over the next five years.
The global demand for gold is expected to grow due to increased interest from central banks seeking to preserve value and diversify risk. According to consultancy Frost & Sullivan, the price of gold will also be supported by the declining quality of mines and increasing extraction costs. Hong Kong’s financial secretary, Paul Chan, noted that initial public offerings in the region have raised nearly HK$150 billion so far this year, ranking top globally. Accountancy firm Deloitte forecasts that Hong Kong will see more than 80 IPOs in 2025, raising up to HK$280 billion.
The successful debut of Zijin Gold International on the Hong Kong stock exchange highlights the growing demand for gold and the significance of the precious metal in the current market. As the global economy continues to evolve, it is likely that the price of gold will remain a key indicator of market trends and investor sentiment. With its strong track record and extensive experience in the industry, Zijin Gold is well-positioned to capitalize on the growing demand for gold and to make significant contributions to the global gold market.
