Gold stocks opened significantly lower. At the time of writing, Lingbao Gold (03330) was down 13.87% at HKD 2.0; China Gold International (02099) fell 12.28% to HKD 18.0; Shandong Gold (01787) dropped 10.8% to HKD 3.948; Zijin Mining (02899) declined 9.98% to HKD 3.772; Zijin Gold International (02259) decreased 8.14% to HKD 2.008.
The market movement was triggered by news that US President Trump nominated Kevin Warsh for the position of Federal Reserve Chair, igniting hawkish expectations in the market and leading to a panic sell-off in precious metals.
On January 30, spot gold in London plunged 7.8%, marking its largest single-day drop since February 1980, while COMEX gold futures in New York plummeted 9.3% in a single day.
In response, Guotai Haitong Securities believes the "Warsh moment" served as the catalyst for a significant market adjustment, particularly affecting precious metals, but it was merely the trigger for a correction following excessive short-term speculation, not the fundamental cause; prices for gold and similar assets may still find support after this adjustment.
Tianfeng Securities indicated that market sentiment had already reached a fragile state due to the rapid rise in gold prices beforehand, making it susceptible to any news-driven changes that could trigger concentrated selling by short-term speculators.
In the short term, gold may enter a period of wide fluctuations, yet it still has the potential to resume its upward trend within the year. Given the current critical juncture in global competitive dynamics, the narrative for gold is far from over, and sustained long-term allocation demand from global central banks is expected to continue, providing fundamental support for gold prices.
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