Hong Kong Stock Market Review: Gold prices rise
The price of gold rose close to 2500 yuan due to the expectation of interest rate cuts in September and tensions in the Middle East. The rebound in the price of gold was driven by multiple factors, with Chinese investors entering the market early to profit. The price of copper fell back due to the impact of interest rate cuts and the delayed turning point in the domestic economy, causing hesitation among downstream and traders to accept goods. A hard landing is good for the price of gold, while a soft landing is good for the price of copper. In August, the Hong Kong stock market will usher in the interim reporting season, with core asset performance guidance expected to exceed expectations, and core support remains continuous repurchases. The short interest ratio of stocks such as Tencent has risen, and reverse trading may occur at any time
Driven by expectations of interest rate cuts in September and tensions in the Middle East, gold is once again approaching 2500 yuan.
Previously, gold surged rapidly and then quickly pulled back, influenced by multiple factors including profit-taking by Chinese investors. With views on the weakening US dollar, domestic central bank gold purchases, and the impact of domestic exchange rates and interest rates, it is believed that Chinese investors have entered the market early, leading to greater profit motives in this rapid rise.
In the first half of the year, both gold and copper rose together, mainly driven by expectations of interest rate cuts. However, with the delay in interest rate cuts and the absence of a turning point in the domestic economy, copper prices have also continued to fall over the past two months, showing a typical ebb in sentiment. In the face of uncertainty, downstream and traders are also hesitant to take delivery.
When copper can rebound again depends on macroeconomic improvement, either driven by domestic stimulus policies or after interest rate cuts.
Although interest rate cuts are beneficial for gold, after the rate cuts, institutional allocation dynamics still come from economic expectations. If a hard landing is expected, there will naturally be greater allocation interest. With the recent sharp decline in US stocks, it is highly likely not yet indicating an economic recession. However, as interest rate cuts approach, institutions may begin to assess whether it will be a soft landing or a hard landing, which could lead to significant fluctuations in gold prices.
A hard landing is good for gold prices, while a soft landing is good for copper prices, and eventually one of the two will outperform.
Turning to the Hong Kong stock market, August will usher in the interim reporting season. Considering the current pessimistic sentiment, the performance guidance of core assets is expected to exceed expectations, with continued support from share buybacks. Recently, short-selling ratios for companies like Tencent have returned to high levels, and reverse trades may occur at any time