The Hong Kong stock market saw a collective decline in gold stocks in early trading, with Zijin Mining (02899) leading the way with a nearly 4% drop. Lingbao Gold (03330), China Gold International (02099), and Shandong Gold (01787) also experienced significant drops in their stock prices.
The decline in gold stocks comes after Federal Reserve Chairman Powell’s speech last Friday, which initially drove gold prices to a record high. Traders interpreted Powell’s speech as a signal that the Federal Reserve would cut interest rates, leading to a sharp decline in the dollar and U.S. Treasury yields. However, there are now signs that the financial markets may have been too optimistic about the extent of the Fed’s interest rate cuts for next year.
In New York trading on Monday, gold fell 2.5% after reaching a record high of $2,135.39 an ounce. This decline follows a more than 3% rise in Asian trading. Goldman Sachs has warned that the level of easing reflected in financial markets is “excessive,” which is reflected in the gains in bond yields and the dollar on Monday.
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