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Gold stocks fall as Fed's Kashkari says inflation still too high
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Gold stocks listed in Hong Kong fell sharply on October 21, 2024, with China Gold International dropping 7.10%, Lingbao Gold falling 5.29%, Shandong Gold declining 3.48%, and Zijin Gold International losing 2.70%. The sell-off followed hawkish comments from Minneapolis Federal Reserve President Neel Kashkari, who said on October 20 that inflation remains too high across all sectors of the U.S. economy, not just energy. Kashkari's remarks came after the Fed's 'hawkish rate hike' last Wednesday. Goldman Sachs subsequently revised its rate path forecast, now expecting another 25-basis-point rate hike in October. Guolian Futures commented that the core logic for precious metals will revolve around December Fed policy expectations, U.S. Treasury yields, and oil-driven inflation expectations, constrained by U.S. inflation and employment data, fiscal conditions, and geopolitical developments. In the short term, oil price volatility, high bond yields, and U.S. midterm elections are expected to keep precious metals in a volatile pattern under the 'high interest rates plus geopolitical uncertainty' backdrop.
Source report
Gold-related stocks fell broadly in Hong Kong trading. As of press time:
- China Gold International (02099) dropped 7.10% to HKD 233.00
- Lingbao Gold (03330) fell 5.29% to HKD 23.26
- Shandong Gold (01787) declined 3.48% to HKD 22.18
- Zijin Gold International (02259) slipped 2.70% to HKD 154.80
Market Drivers
Hawkish Fed Commentary
Minneapolis Federal Reserve President Neel Kashkari said on October 20 that inflation remains too high across all sectors of the U.S. economy, not just in rising oil prices. "Even if we strip out volatile energy and food prices, inflation is still too high in terms of where the economy is headed," Kashkari stated in an interview.
Rate Hike Expectations
Following the Fed's "hawkish rate hike" last Wednesday, Goldman Sachs quickly revised its interest rate path forecast. The investment bank now expects the Federal Reserve to raise interest rates by another 25 basis points at its October policy meeting.
Analyst Outlook
According to Guolian Futures, the core logic for precious metals going forward will revolve around:
- December Fed policy expectations
- U.S. Treasury yields
- Oil-driven inflation expectations
These factors are jointly constrained by U.S. inflation and employment data, fiscal conditions, and geopolitical developments.
In the short term, macro uncertainties—including oil price volatility, high U.S. Treasury yields, and the U.S. midterm elections—will continue to disrupt the market. Against the backdrop of "high interest rates plus geopolitical turmoil," precious metals are likely to maintain a range-bound pattern, passively influenced by various macro variables.
Source
智通财经网Regional
Part of this Story
Hong Kong gold stocks plunge as Fed officials signal further rate hikes