Understanding the Market | Gold stocks fell across the board as tariffs and geopolitical conflicts eased, putting significant pressure on international gold prices
Gold stocks fell across the board, with LINGBAO GOLD down 5.83%, SD-GOLD down 5.51%, and CHIFENG GOLD down 5.17%. The spot gold price briefly fell below USD 3,270 per ounce. Substantial progress was made in the China-U.S. economic and trade talks, and India and Pakistan announced a ceasefire, easing geopolitical risks. Analysts pointed out that geopolitical risks, the Federal Reserve's hawkish stance, and liquidity shocks will trigger a correction in gold, and attention should be paid to the downside risks in the short term. The market's pricing of future uncertainty risks has decreased, leading to fluctuations in gold prices
According to Zhitong Finance APP, gold stocks fell across the board. As of the time of publication, Lingbao Gold (03330) dropped 5.83% to HKD 8.89; Shandong Gold (01787) fell 5.51% to HKD 22.3; Chifeng Gold (06693) decreased by 5.17% to HKD 25.7; China Gold International (02099) declined 2.96% to HKD 49.1.
In terms of news, on May 12, spot gold opened more than 1% lower, and the decline further expanded, with prices once falling below USD 3,270 per ounce. According to reports, He Lifeng, the Chinese leader in the China-U.S. economic and trade talks and Vice Premier of the State Council, attended a press conference stating that China and the U.S. reached an important consensus and made substantial progress in the talks. Regarding geopolitical risks, India and Pakistan announced on May 10 that both sides agreed to achieve a comprehensive ceasefire that afternoon. After the ceasefire announcement, although there were still small-scale frictions at the India-Pakistan border, the overall situation remained calm. Additionally, Russian President Putin issued a statement early on the 11th local time, proposing that Russia and Ukraine restart direct negotiations unconditionally in Istanbul, Turkey, on the 15th.
Xu Ying, Chief Macro Analyst at Dongzheng Futures Derivatives Research Institute, analyzed that the current easing of geopolitical risks, the Federal Reserve's hawkish stance, and liquidity shocks will trigger a correction in gold. Gold has not yet stabilized in the short term, and the risk of decline still needs to be monitored, with bottom-fishing waiting for a decrease in volatility. Huatai Futures pointed out that as Trump's attitude towards imposing high tariffs and Federal Reserve Chairman Powell has softened, the market's pricing of future uncertainty risks has temporarily decreased, leading to a pullback in gold prices, which are currently trapped in a volatile pattern, while also needing to pay attention to whether liquidity risk shocks will occur again thereafter
