Gold stocks traded lower across the board in Hong Kong today, with most major players seeing declines.
As of press time, China Silver Group (00815) dropped 5.36% to HK$0.265, China Gold International Resources Corp Ltd (02099) fell 4.68% to HK$167, and Zijin Gold International (02259) slid 3.85% to HK$114.9. Lingbao Gold Group (03330) declined 4.01% to HK$18.91, while Zijin Mining Group Co Ltd (02899) was down 3.76% at HK$32.26.
The selloff comes amid a sharp rise in oil prices fueled by escalating US-Iran tensions in the Middle East, which has pushed US Treasury yields to their highest levels this year. Market participants now estimate a roughly 30% probability that the Federal Reserve could raise interest rates at its July 29 meeting, while the chance of holding rates steady stands at about 70%. The 10-year Treasury yield climbed to around 4.7%, hitting levels not seen since January 2024, while the 30-year yield briefly surged to 5.19% overnight, nearing the highest levels since 2007.
According to analysts at CICC Wealth Futures, the escalation of the US-Iran conflict, particularly with Israel and the Houthis joining in, has significantly increased the odds of further instability. This has driven oil prices sharply higher, dealing a heavy blow to gold, which had just started a rebound. Gold prices have retreated significantly, and if oil continues to rally in the short term, gold will undoubtedly remain under pressure. The biggest risk for the gold market right now is an uncontrolled surge in oil prices.
Meanwhile, Guosheng Securities believes that the recent rebound in gold and silver is the result of a rotation of funds away from technology stocks and into other sectors, rather than the start of a new trend-based rally.
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