HANetf's Harry Halewood: Gold's rebound makes miners a 'leveraged play on gold conviction'

Harry Halewood, product specialist for the HANetf Gold Miners Screened UCITS ETF (LSE: ESGO), discussed gold's recent rebound with Proactive's Stephen Gunnion. The price of gold surged after its January all-time high, climbing 8-9% in the past week. Halewood attributed the uptick to events in the Middle East, changing investor positioning, and evolving expectations regarding U.S. monetary policy.

Additionally, softer-than-expected U.S. jobs data and a neutral CPI reading lessened concerns about an imminent Fed rate hike, which is favorable for gold, as it is a non-income-generating asset.

Halewood emphasized that miners are essentially a "leveraged play on gold conviction." This is because their returns are contingent on the disparity between the gold price and their all-in sustaining costs. Consequently, price gains can lead to significant margin expansions. He further noted that miners have maintained robust cash flows despite price and cost volatility.

Should the gold price rally persist, miners stand to gain substantially by allocating their capital towards augmenting output and enhancing operational efficiency.