Gold-related stocks are leading the decline in the Hong Kong market. At the time of writing, Chifeng Gold (06693) fell 4.21% to HK$26.88, Zijin Mining International (02259) dropped 4.03% to HK$100.1, Shandong Gold (01787) declined 3.58% to HK$18.29, and China Gold International (02099) was down 3.32% at HK$136.7.
The catalyst for the sell-off stems from former President Trump's public statement that the ceasefire between the US and Iran has ended. This has triggered a broad sell-off in the US bond market, with the 10-year Treasury yield rising more than 20 basis points since last Friday's close. The 30-year yield has now closed above the key psychological level of 5% for three consecutive trading sessions.
Analysts note that the prospect of conflict tends to push energy prices higher, sparking market concerns about inflation and the potential for higher interest rates. Such an environment typically acts as a headwind for non-yielding assets like gold.
Central Bank Gold Purchases Continue
It is noteworthy that data released by the central bank shows China's gold reserves reached 75.44 million ounces by the end of June, an increase of 480,000 ounces from the previous month. This marks the 20th consecutive month of gold accumulation by the People's Bank of China, with the scale of monthly purchases expanding for the fourth month in a row.
Furthermore, a recent survey by the World Gold Council revealed that nearly 90% of the central banks polled believe global central bank gold reserves will continue to increase over the next 12 months.
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