Golden Prospect Precious Metals Ltd on Tuesday reported a narrowed interim loss as net capital loss on investments decreased.

The closed-end investor focused on gold and precious metals companies said in the six months to June 30, pretax loss narrowed to £2.7 million from £9.4 million a year prior. This was driven by a contraction in the net capital loss on investments held at fair value to £2.3 million from £8.9 million a year ago.

Looking ahead, the company noted the possibility of stagflation, adding that: ‘Persistent inflationary pressures and tepid economic growth has historically been an environment in which gold markets have

performed well’.

However, it said that zinc mining production in China was likely to fall amid a worsening steel outlook, which it expects to decline.

Golden Prospects Precious said: ‘Despite the prospect of stagflation and worrying debt levels, precious metal producers remain heavily out of favour and thus trade at a discount to historic multiples and also versus more economically exposed industrial mining peers that have held up remarkably well.

‘In the current environment, precious metal equities remain an attractively valued hedge to the elevated risks arising from tighter interest and the apparent need to increase already worrying levels of debt together with ongoing geopolitical strains.’

Golden Prospects Precious shares were 0.6% lower at 27.03 pence each on Tuesday afternoon in London.

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