On Tuesday, the Hong Kong stock market's gold sector continued to decline, impacted by the ongoing strengthening of the US dollar and a reduction in market demand for gold. As of press time, China Gold International (02099) fell by 3.72% to HKD 33.65; Zijin Mining (02899) dropped by 3.03% to HKD 15.34; Lingbao Gold (03330) decreased by 1.91% to HKD 3.08; and Shandong Gold (01787) fell by 1.42% to HKD 13.92. Gold prices fell by over 2% under the pressure of a stronger dollar and diversified demand for safe havens, exerting downward pressure on Hong Kong-listed gold stocks.
Huatai Futures analysts stated that after Trump’s election victory, the demand for the US dollar surged, propelling it significantly higher, with the dollar index reaching a high of 105.70, which has restrained gold. At the same time, the rapid growth of the digital currency market has attracted some safe-haven funds, weakening the appeal of gold. Gold ETFs have seen continuous outflows over the past two weeks, indicating a reduced demand for gold allocation among investors. According to market data, gold ETF holdings have decreased for two consecutive weeks, showing a gradual flow of safe-haven funds into other assets.
Although gold currently faces multiple negative factors, some analysts believe that future geopolitical risks and inflation expectations may provide some support for gold prices. If Trump promotes more expansionary fiscal policies during his tenure, inflation may heat up again, leading to a decline in real interest rates. In a low interest rate environment, gold is typically favored as a hedging tool, possibly offsetting some of the pressure caused by a stronger dollar.
In summary, the future trajectory of the gold market depends on whether the strength of the dollar can persist and if Trump's policies can trigger an increase in inflation. If the US implements active fiscal stimulus policies, it might support gold demand over time. Investors should pay attention to the dollar's trend, changes in geopolitical situations, and global inflation expectations in the current volatile environment to assess the outlook for gold allocation.
