Understanding the Market | Gold Stocks Continue to Decline as Rising Interest Rates Increase the Cost of Holding Gold; Wall Street Investment Banks collectively Lower Gold Price Expectations
Gold stocks continue to decline. As of the time of writing, SD GOLD is down 4.83%, trading at HKD 18.7; ZIJIN GOLD INTL is down 5.17%, trading at HKD 94.4; CHIFENG GOLD is down 3.76%, trading at HKD 24.04; CHINAGOLDINTL is down 2.6%, trading at HKD 127.3. On the news front, Wall Street investment banks collectively lowered their gold price forecasts: Goldman Sachs has reduced its year-end target price to USD 4,900, while Deutsche Bank sees an extreme scenario of USD 3,800. Meanwhile, expectations for interest rate hikes have been significantly raised, with Bank of America predicting three rate hikes within the year, and Goldman Sachs expecting no rate cuts before 2027. The correlation between gold and energy prices has weakened, re-binding to real interest rates. Rising U.S. Treasury yields are increasing the cost of holding gold, putting pressure on gold ETFs with capital outflows. Dongfang Securities believes that gold prices may remain volatile before concerns over interest rate hikes ease. In the medium to long term, risks related to U.S. federal government debt still exist, the status of the U.S. dollar faces challenges, and under the restructuring of the global monetary system, there are still opportunities for gold to perform continuously. Guoyuan International believes that the current core focus of the Hong Kong stock gold sector has shifted from geopolitical risk premiums to "the sustainability of gold price rebounds + the decline in U.S. Treasury yields + the ability of companies to realize profits."
According to Zhitong Finance APP, gold stocks continue to decline. As of the time of publication, Shandong Gold (01787) is down 4.83%, trading at HKD 18.7; ZIJIN GOLD INTL (02259) is down 5.17%, trading at HKD 94.4; CHIFENG GOLD (06693) is down 3.76%, trading at HKD 24.04; CHINAGOLDINTL (02099) is down 2.6%, trading at HKD 127.3.
On the news front, Wall Street investment banks have collectively lowered their gold price expectations: Goldman Sachs has reduced its year-end target price to USD 4,900, while Deutsche Bank sees an extreme scenario of USD 3,800. Meanwhile, expectations for interest rate hikes have been significantly raised, with Bank of America predicting three rate hikes within the year, and Goldman Sachs expecting no rate cuts before 2027. The correlation between gold and energy prices has weakened, re-binding to real interest rates. Rising U.S. Treasury yields are increasing the holding costs of gold, putting pressure on gold ETFs with capital outflows.
Dongfang Securities believes that gold prices may remain volatile before concerns over interest rate hikes ease. In the medium to long term, risks related to U.S. federal government debt still exist, the status of the U.S. dollar is facing challenges, and under the reconstruction of the global monetary system, gold still has opportunities for sustained performance. Guoyuan International, on the other hand, believes that the current core focus of the Hong Kong stock gold sector has shifted from geopolitical risk premiums to "the sustainability of gold price rebounds + the decline in U.S. Treasury yields + the ability of corporate earnings to realize."
