Gold Stocks Lead Declines in Hong Kong Market as Hot U.S. Inflation Data Fuels Rate Hike Expectations

Gold-related stocks were among the biggest decliners in the Hong Kong market. At the time of writing, LINGBAO GOLD (03330) fell 3.88% to HK$21.3; ZIJIN MINING (02899) dropped 3.61% to HK$37.42; CHINAGOLDINTL (02099) declined 3.27% to HK$171.3; SD GOLD (01787) was down 3.16% to HK$28.84.

The sell-off was triggered by a hotter-than-expected U.S. Producer Price Index (PPI) report, which has intensified market expectations for further Federal Reserve interest rate hikes. Market pricing now indicates a roughly 50% probability of a 25-basis-point rate increase this year.

Data released by the U.S. government on Wednesday showed that the PPI for April rose 6% year-over-year, marking the highest level since December 2022. The core PPI increased 5.2% year-over-year, with both figures significantly surpassing market forecasts. The surge was driven by rising energy and transportation costs, while services inflation hit a four-year high.

In a separate development, the U.S. Senate has approved the appointment of a new Federal Reserve Governor for a 14-year term. Following the completion of the White House signing process, the appointee will officially assume the role, succeeding the current Chair whose term concludes on May 15th. Gold Stocks Lead Declines in Hong Kong Market as Hot U.S. Inflation Data Fuels Rate Hike Expectations

Gold-related stocks were among the biggest decliners in the Hong Kong market. At the time of writing, LINGBAO GOLD (03330) fell 3.88% to HK$21.3; ZIJIN MINING (02899) dropped 3.61% to HK$37.42; CHINAGOLDINTL (02099) declined 3.27% to HK$171.3; SD GOLD (01787) was down 3.16% to HK$28.84.

The sell-off was triggered by a hotter-than-expected U.S. Producer Price Index (PPI) report, which has intensified market expectations for further Federal Reserve interest rate hikes. Market pricing now indicates a roughly 50% probability of a 25-basis-point rate increase this year.

Data released by the U.S. government on Wednesday showed that the PPI for April rose 6% year-over-year, marking the highest level since December 2022. The core PPI increased 5.2% year-over-year, with both figures significantly surpassing market forecasts. The surge was driven by rising energy and transportation costs, while services inflation hit a four-year high.

In a separate development, the U.S. Senate has approved the appointment of a new Federal Reserve Governor for a 14-year term. Following the completion of the White House signing process, the appointee will officially assume the role, succeeding the current Chair whose term concludes on May 15th.