Hedging retreat, gold price correction, can "growth potential" of Chifeng Jilong Gold Mining (06693, 600988.SH) support the next journey?

In the scorching summer of 2026, the global capital markets are experiencing a fierce game of "risk aversion" and "greed", and the spotlight of this game is unsurprisingly on gold and its related assets. It is noted that the price of gold skyrocketed in the first half of the year, not only confirming earlier market predictions of gold surpassing $3000 or even higher, but also making gold a deserving "hard currency" in global asset allocation. However, as July approached and geopolitical tensions, especially the US-Iran conflict, began to ease, the extreme risk aversion sentiment that had pushed gold to its peak quickly cooled down, leading to a noticeable pullback and volatility in gold prices at high levels. In this roller coaster market, the performance of gold stocks is particularly eye-catching. As a industry benchmark, Chifeng Jilong Gold Mining (06693, 600988.SH)'s recently announced mid-year performance profit announcement for 2026 undoubtedly injected a dose of confidence into the market. Certainty of "volume and price rise" In the capital markets, performance forecasts are often seen as a "touchstone" for stock prices. The profit announcement released by Chifeng Jilong Gold Mining this time still revolves around the most essential driving factor of the gold industry - "volume and price rise". According to the latest announcement, Chifeng Jilong Gold Mining is expected to have a net profit of 1.7 billion to 1.78 billion yuan in the first half of the year, a year-on-year increase of 54% to 61%. The company stated that behind this impressive data is mainly the significant increase in the price of gold compared to the same period last year, with the average selling price of gold rising by about 43% year-on-year, while also benefiting from the company's continued strengthening of production organization and operational management. From the "price" perspective, although the price of gold has fallen recently, looking at the longer term, the average price of gold in the first half of 2026 is still at historically high levels. For mining companies, the marginal cost of gold mining is relatively fixed, which means that the excess income brought by the rise in gold prices can almost be fully converted into net profit. With its competitive cost control capability in the industry, Chifeng Jilong Gold Mining has seen a faster than expected recovery in its profit statement during the period of high gold prices. From the "volume" perspective, the "growth" label of Chifeng Jilong Gold Mining is becoming increasingly clear, with both overseas mines expanding production and domestic mines exploring deeper veins, providing a constant source of growth in production. However, in the overall upward trend, short-term performance fluctuations cannot be ignored. According to calculations, the company's net profit for the second quarter is expected to be 712 million to 792 million yuan, a decrease of 19% to 27% compared to the first quarter. The decline in this quarter-over-quarter data objectively reflects the temporary pressure on gold prices in the near term and the drag on short-term profits from the concentrated technology upgrades and repairs of some mines. But this is not a deterioration of the company's fundamentals, but rather a "short-term pain" in the production capacity release cycle. With the completion of subsequent technological upgrades and the steady ramp-up of overseas mining capacity, the internal value generated through volume growth can still lock in the certainty of profit growth. This is the fundamental reason why the capital market continues to pay high attention to quality gold stocks in the current turbulent environment - seeking certainty of profit growth in an uncertain macro environment. "A safe haven" under geopolitical uncertainties In fact, investment has never been a linear one-way street. Just when the market was full of expectations for the gold mid-year report, a sudden change in geopolitical variables has thrown cold water on the gold price. Recently, there have been signs of easing tensions in the much-watched US-Iran conflict. This news, like the first domino falling, quickly triggered a retreat in market risk aversion sentiment. Gold, as a traditional safe haven asset, is often positively correlated with the level of geopolitical tensions. When the clouds of war dissipate, funds will quickly withdraw from the gold market and flow towards higher risk preference equity assets. As a result, international gold prices, after a strong performance in the first half of the year, have recently shown a clear pullback from the highs, with spot gold prices retracting some of the year's gains. This short-term sharp fluctuation has made the market start to worry: has the "bullish" market for gold come to an end? Has the underlying rationale for the rise of gold stocks like Chifeng Jilong Gold Mining fundamentally reversed? In the face of market volatility, rational strategic judgment is particularly crucial. Although the easing of US-Iran tensions has exerted pressure on gold prices in the short term, examining it from a more macroscopic perspective, the underlying logic supporting long-term rise in gold prices has not fundamentally changed. Firstly, the "gold-buying fever" of global central banks remains the strongest support for gold prices. According to data from the World Gold Council, the trend of global central banks increasing their holdings of gold reached its peak in 2024, and this trend has not fundamentally changed in 2026. In particular, emerging market central banks represented by China and Russia, for reasons of diversifying foreign exchange reserves and de-dollarization strategic considerations, are still steadily buying gold. This rigid demand from official entities provides a solid "floor" for gold prices. According to Guosen research report data, in recent years, global central banks have continuously increased their holdings of gold, with gold purchases reaching 243.7 tons in the first quarter of 2026, and the Chinese central bank has been buying gold for 20 consecutive months. Secondly, the US debt problem and the shaking of the credit currency system are the ultimate drivers of a long bull market for gold. Regardless of how the pace of interest rate cuts by the Federal Reserve changes, the large size of US debt and the constantly rising deficits are undermining the credibility of the US dollar. As billionaire John Paulson said, the world is seeking to break away from the paper currency system, and the trend of using gold as a reserve currency will not change. In this macro background, gold is not just a commodity, but also a "ultimate currency" to combat the devaluation of credit currencies. Therefore, the recent drop in gold prices due to the easing of US-Iran tensions should be more seen as a "technical correction" rather than a "trend reversal". For companies like Chifeng Jilong Gold Mining, short-term fluctuations in gold prices may affect market sentiment, but they do not change the internal value generated through volume growth. Conclusion Looking back at the midpoint of 2026, the gold market is at a critical stage of "separating the genuine from the false". As gold prices have pulled back from their highs, the previously soaring trend in the gold sector is likely coming to an end, and the market is accelerating its return to rational pricing. When the tide recedes, those truly quality companies that rely on their own production growth to deliver profits will face real tests and opportunities. Chifeng Jilong Gold Mining's impressive mid-year profit report has actually sent a clear signal to the market: in the "new normal" of fluctuating high gold prices, companies with quality mining resources, production capacity release capabilities, and excellent cost controls can still navigate through the cycle by "adding quantity to deficiency" or even achieving "volume and price rise". For investors, facing the fluctuations in gold prices brought about by changes in geopolitical situations, it may be more appropriate to return to rational asset allocation logic. Gold, as a "ballast stone" to hedge against macro risks, still holds long-term value, but the short-term price game will undoubtedly intensify. In the background of the fading widespread surge, market funds are likely to focus more on the fundamentals of companies. In the future, mining companies with the ability to realize performance and long-term growth potential may have opportunities for revaluation, while targets lacking fundamental support may face adjustment pressures. In this "midfield battle" of gold, who can laugh last ultimately depends on who can withstand the waves and run farther.