Understanding the Market | Gold stocks rise during trading as limited room for interest rate cuts and inflation concerns support gold prices

Zhitong
2025.01.13 02:29
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Gold stocks rose during the trading session, with SD GOLD up 3.04%, ZHAOJIN MINING up 2.68%, ZIJIN MINING up 1.06%, and LINGBAO GOLD up 0.96%. Despite the slowdown in economic data and the downward revision of interest rate cut expectations, demand for safe-haven buying increased, leading to a weekly rise in gold prices of 2.36%. Analysts believe that inflation concerns will support gold prices, and the room for interest rate cuts is limited, suggesting that gold prices may fluctuate upward amid inflation worries in the future

According to Zhitong Finance APP, gold stocks rose during the trading session. As of the time of publication, Shandong Gold (01787) rose by 3.04% to HKD 14.24; ZHAOJIN MINING (01818) rose by 2.68% to HKD 12.24; Zijin Mining (02899) rose by 1.06% to HKD 15.3; LINGBAO GOLD (03330) rose by 0.96% to HKD 4.22.

In terms of news, last week, after a slight decline in gold prices on Monday, there were four consecutive increases. Although there were negative factors such as slowing economic data and statements from Federal Reserve officials indicating a pause in interest rate cuts, the uncertainty surrounding Trump's trade policies increased demand for safe-haven buying, leading to a weekly increase of 2.36% in COMEX gold futures, closing at USD 2,717.4 per ounce. In terms of data, the U.S. added 256,000 non-farm jobs in December, the largest increase in nine months, exceeding the expected value of 165,000, with the previous value revised down from 227,000 to 212,000; the unemployment rate in December was 4.1%, lower than expected and down from 4.2% in November.

Ping An Securities analysis believes that the current market has high expectations for the realization of policies after Trump's inauguration, with concerns about rising inflation and continuously revised expectations for interest rate cuts, which puts pressure on gold prices. However, inflation concerns provide support for gold prices. Currently, the room for revising down interest rate cut expectations is limited, and the marginal variable is the change in inflation expectations. Trump's determination to implement policies is strong, and gold prices are expected to fluctuate upward amid inflation concerns in January.

Tianfeng Securities pointed out that looking ahead to 2025, the U.S. debt balance is still rising rapidly, further weakening the credit of the dollar. While boosting central bank gold purchasing demand, the overflow of funds from U.S. Treasury allocations will also provide momentum for gold prices to rise. As we enter a rate-cutting cycle, the upward space for gold prices opens up; however, the relatively sticky inflation in the U.S. may lead to expected fluctuations in the pace of interest rate cuts, exacerbating the volatility of gold prices

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