Gold stocks boost on gold price hike

Gold investors are happy. But gold stock investors are even happier. Compared with less than 50 percent profit from investing in gold this year, gold stocks offered investors more than a 200 percent return. How could this happen and is this normal?

Gold was 800 dollars an ounce at the beginning of the year and is now at 1200 dollars. But that performance is dwarfed by gold mining stocks, once again showing the financial market is more dynamic than the real economy.

Zhang Gang, Analyst of Southwest Securities, said, "Gold stocks outperformed real gold prices. In major gold shares, so far this year the smallest performance is Zijing Mining, a 120 percent increase. Other shares like Hengbang Share Holdings jumped more than 250 percent. Apparently, buying gold stocks is better than buying gold."

Experts say the reason for the performance is mainly because gold concept shares are very limited in the A share market. Only 9 companies out of more than two thousand are gold business related. So they have been pushed by the immense liquidity on the market.