Gold stocks in Hong Kong are predominantly trading higher. At the time of writing, ZIJIN GOLD INTL (HKEX: 02259) is up 3.63% to HK$111.4. SD GOLD (HKEX: 01787) has gained 3.86% to HK$20.44. CHINAGOLDINTL (HKEX: 02099) has risen 3.56% to HK$148.5, while ZIJIN MINING (HKEX: 02899) is 2.99% higher at HK$31.64.
The upward movement follows a rally in spot gold, which climbed above $4,200 per ounce at the market open. This strength comes after recent U.S. employment data showed non-farm payrolls increased by just 57,000 in June, roughly half of the market's expectation of 113,000. The weaker-than-expected jobs report has led markets to significantly scale back expectations for further interest rate hikes by the Federal Reserve.
Additionally, a sustained decline in international oil prices has helped ease market concerns about rising inflation risks. Reports indicate that OPEC+ has agreed to increase its production quota by 188,000 barrels per day starting in August.
Analyst Outlook on the Sector
Analysis from CITIC Securities suggests that gold prices and gold stocks have been severely oversold since the onset of U.S.-Iran tensions. The firm notes that gold stocks currently offer strong safety margins based on both price-to-earnings (P/E) ratios and resource valuations.
The brokerage forecasts a trading range for gold of $4,000 to $4,500 per ounce in the third quarter of 2026. It further suggests that if market expectations for interest rate hikes undergo a full correction, gold prices could potentially rebound to a range of $4,500 to $5,000 per ounce.
The gold sector is expected to benefit from a simultaneous improvement in profit expectations and valuation levels, presenting what analysts view as a comprehensive investment opportunity.
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