- Hong Kong gold stocks fell sharply, with Zijin Mining (2489:HK) dropping over 9% to hit a new low for the year, Lingbao Gold (3330:HK) falling over 8%, Tongguan Gold (0340:HK) nearly 7%, and major mining companies like Shandong Gold (600547:CH) also experiencing significant pullbacks.
- In the short term, gold prices have fallen below the critical threshold of $4,200 per ounce, with bearish sentiment dominating the market. Investors are awaiting the release of the U.S. Core Personal Consumption Expenditure (PCE) Price Index this week for the latest clues on the Federal Reserve's (Fed) interest rate path.
- The latest survey by the World Gold Council (WGC) indicates that the long-term trend of gold purchases by global central banks remains unchanged, with 89% of surveyed central banks expecting global gold reserves to increase over the next 12 months. However, this long-term support factor is unlikely to fully offset the selling pressure from the high-interest-rate environment in the short term.
Rising Fed Rate Hike Expectations Weigh on Precious Metals
Recent macroeconomic data shows that the U.S. economy is more resilient than expected, leading to renewed expectations of Fed rate hikes. As a non-yielding asset, gold prices are highly sensitive to rising real interest rates. When the opportunity cost of holding gold increases, signs of institutional funds exiting precious metal ETFs become apparent. Additionally, the recent fluctuations in geopolitical negotiations have led some risk-averse funds to take profits after gold prices broke key technical levels, putting pressure on the market.
Key Technical Levels Breached Trigger Quantitative Selling
From a technical perspective, the international spot gold price falling below the psychological and technical threshold of $4,200 per ounce has triggered programmatic selling by some trend-following funds in the market. The Hong Kong gold sector, having accumulated significant gains previously, is valued relatively high. Under the dual impact of increased volatility in overseas markets and downgrades in sector ratings by institutions, there is a strong desire for capital to exit, causing stocks like Zijin Mining to hit new lows for the year.
Market Awaits Core PCE Indicator for Short-Term Guidance
Market analysts point out that the gold market is expected to remain volatile this week, and investors should be cautious of the risk of short-term bullish stampedes leading to sell-offs. The U.S. Core PCE data to be released this Friday will be a key basis for determining the direction of the Fed's monetary policy. If the data shows signs of an inflation rebound, the market's pricing of monetary policy tightening may be further reassessed, and gold prices may continue to test lower support levels in the short term.
Long-Term Central Bank Gold Demand Offsets High-Interest Downside
Despite the short-term impact of tightening macro liquidity on prices, the trend of global central banks diversifying their asset allocations has not fundamentally changed in the medium to long term. The latest official survey by the World Gold Council shows that 45% of surveyed central banks plan to increase their gold reserves in the next 12 months, a record high. This systematic official buying power is expected to build a relatively solid bottom structure for gold prices in the medium to long term.
