I. Market Background: Rate Cut Expectations and Central Bank Gold Buying Surge Drive Precious Metals Cycle Upward
In September 2026, the global macroeconomic environment saw significant changes. Fed Chair Walsh signaled a "less hawkish" stance in recent remarks, pushing expectations for a Q4 2026 rate cut above 70%. Meanwhile, global central bank gold purchases hit a record high, with net purchases reaching 220 tons in Q2, up 25% year-on-year, particularly strong demand from emerging markets like China, Russia, and India. These dual factors pushed London gold back to the $4300 mark, while silver hit a new yearly high due to surging industrial demand (photovoltaics, AI chips).
For Singapore investors, the STI index, as a representative of Singapore blue-chip stocks, shows increasing correlation with Asian precious metal mining enterprises' US stocks. Historical data shows that when gold rises 10%, the average gain of Asian precious metal mining ADRs can reach 15%-20%, far exceeding STI's同期 performance. Thus, allocating to these US stocks has become a key strategy in Singapore blue-chip portfolios.
II. Performance of Asian Precious Metal Mining Enterprises' US Stocks: Performance Divergence and Valuation Recovery
1. Zijin Mining: Record Production, Emerging Cost Pressures
Zijin Mining (Zijin Mining, ADR code: ZIJMY), one of Asia's largest gold miners, produced 32 tons in Q2 2026, up 12% year-on-year, with 8 tons from the early commissioning of its Serbia copper-gold mine. However, global energy price hikes pushed Q2 costs up 8% to $1200/oz, above the market's expected $1150/oz. Despite this, CICC recently raised its target price to HK$18, citing the company's production growth potential over the next three years (expected to reach 45 tons in 2027) to offset cost pressures.
In terms of valuation, Zijin Mining's PE is 15x, below the industry average of 18x, and its PB is 2.2x, at a historical low. Singapore investors can participate via its ADR (ZIJMY) to enjoy dual gains from RMB appreciation and gold price increases.
2. Indonesia's ANTM: Surge in Reserves, Goldman Sachs Upgrades Rating
Indonesia's state-owned mining company (ANTM, ADR code: ANTMY) produced 15 tons of gold in Q2, 5% above market expectations, mainly due to the new Sumatra mine. More notably, it recently announced a 20% surge in gold reserves to 1200 tons, securing production growth for the next five years. In a report on September 10, Goldman Sachs upgraded ANTM from "Neutral" to "Buy" with a $25 target, citing reserve growth and improved cost control.
ANTM's PE is 12x, PB 1.8x, below the industry average, and its dividend yield is as high as 4.5%, suitable for Singapore investors seeking high dividends. Additionally, ANTM's correlation with STI (0.65) is higher than Zijin's (0.58), indicating stronger linkage to Singapore blue-chip stocks.
3. Performance Divergence: Dual Challenges of Cost and Production
Despite some strong performers, Asian precious metal mining enterprises' US stocks show overall performance divergence. For example, a Philippine gold miner saw Q2 production drop 10% due to delayed new mine commissioning, leading to a 15% stock price fall. Another Korean miner's net profit fell 8% year-on-year due to rising energy costs. This divergence stems from differences in cost structures (e.g., energy dependence) and production growth rhythms. For Singapore investors, selecting companies with cost control and production growth potential is key.
III. Valuation Logic: In-Depth Analysis from PE to PB
1. PE (Price-to-Earnings): Valuation Trough Below Industry Average
Currently, the average PE of Asian precious metal mining enterprises' US stocks is 16x, while gold is at a high of $4300/oz. Theoretically, miners' profits should surge, but PE remains at a historical low. This is due to lingering concerns about Fed rate hikes and cost pressures at some firms. However, as rate cut expectations rise, market sentiment will improve, and PE is likely to recover to the industry average of 18x.
Taking Zijin Mining as an example, its PE is 15x. If gold stays above $4300 and costs remain stable, its EPS could grow 20%, pushing the stock up 30%. For Singapore investors, allocating to low-PE miners offers a higher safety margin.
2. PB (Price-to-Book): Core Indicator of Asset Value
PB is a key metric for valuing precious metal miners, as their core assets are gold reserves. Currently, the average PB of Asian precious metal miners is 2.1x, with Zijin at 2.2x and ANTM at 1.8x, both below the historical average of 2.5x. This means their asset values are undervalued, especially ANTM, whose PB still has room to rise after a 20% reserve surge.
Singapore investors can use PB to screen for companies with high reserve growth potential, like ANTM, whose PB still has upside after a 20% reserve increase, making it suitable for long-term holding.
3. Dividend Yield: Appeal of High Dividends
Some Asian precious metal miners offer high dividend yields, e.g., ANTM's 4.5% and Zijin's 3.2%. In the current low-rate environment, high-yield assets are attractive to Singapore investors. Additionally, dividend stability matters—Zijin's yield has been relatively stable over five years, suitable for investors seeking steady returns.
IV. STI Index and Precious Metal Miners' Correlation: Capturing Dual Opportunities
As a representative of Singapore blue-chip stocks, the STI index shows increasing correlation with Asian precious metal mining enterprises' US stocks. H1 2026 data shows that when STI rises 1%, Asian precious metal mining ADRs average 1.2% gains, while a 1% gold price rise leads to 1.5% ADR gains. This indicates miners' performance is more influenced by gold prices than STI.
For Singapore investors, two approaches are available: direct investment in Asian precious metal mining ADRs, or indirect participation via related blue-chip firms (e.g., DBS, OCBC). For example, DBS's precious metals trading accounts for 15% of its investment banking business, and OCBC's gold ETF has a $5 billion scale—both benefit from rising precious metal prices.
V. Investment Recommendations: Precious Metals Allocation Strategy in Singapore Blue-Chip Portfolios
1. Select Companies with Cost Control and Production Growth Potential
In the current market, selecting companies with cost control and production growth potential is crucial. For example, Zijin's early commissioning of its Serbia copper-gold mine reduced unit costs; ANTM's 20% reserve surge secures future production growth. These firms can maintain profit growth amid gold price volatility, suitable for long-term holding.
2. Focus on Dividend Yield and PB Metrics
Companies with high dividend yields and low PB offer high investment value. For example, ANTM's 4.5% yield and 1.8x PB suit investors seeking high dividends and asset value. Zijin's 15x PE and 2.2x PB suit those pursuing growth and valuation.
3. Combine STI and Gold Price Trends
Singapore investors should closely monitor STI and gold price trends. When STI rises and gold rises, it's the best time to allocate to precious metal miners. For example, in September 2026, STI rose 2% and gold 3%—allocating to Zijin and ANTM then could yield dual gains.
VI. Risk Warnings
Despite their investment value, precious metal miners carry risks: 1) Fed rate hikes exceeding expectations, leading to gold price drops; 2) Global energy price hikes increasing miners' costs; 3) Geopolitical risks affecting production. Singapore investors should diversify to reduce single-asset risk.
In September 2026, Fed rate cut expectations and central bank gold buying created a valuation restructuring opportunity for Asian precious metal mining enterprises' US stocks. Singapore investors can allocate to precious metals in blue-chip portfolios by selecting cost-controlled, growth-potential firms, combining STI and gold trends, to capture dual hedging and appreciation opportunities.
