Understanding the Market | Gold stocks lead the decline, LINGBAO GOLD falls nearly 4%, US inflation indicators soar, raising interest rate hike expectations
Gold stocks fell sharply, as of the time of publication, LINGBAO GOLD dropped 3.88%, trading at HKD 21.3; Zijin Mining fell 3.61%, trading at HKD 37.42; China Gold International decreased by 3.27%, trading at HKD 171.3; Shandong Gold declined 3.16%, trading at HKD 28.84. On the news front, the unexpected surge in PPI inflation has raised expectations for a Federal Reserve interest rate hike, with the market now estimating the probability of a 25 basis point increase within the year to be around 50%. The U.S. government reported on Wednesday that the PPI in April rose 6% year-on-year, the highest level since December 2022, while core PPI increased by 5.2%, both significantly exceeding market expectations. Both energy and transportation costs have risen, and service sector inflation has reached a four-year high. Additionally, the Senate has previously approved Walsh to serve as a Federal Reserve governor for a term of 14 years. With the approval of this chair appointment, Walsh will officially take office after completing the relevant signing procedures at the White House, succeeding the current chair Powell, whose term ends on May 15
According to Zhitong Finance APP, gold stocks are among the biggest losers. As of the time of publication, Lingbao Gold (03330) is down 3.88%, trading at HKD 21.3; Zijin Mining (02899) is down 3.61%, trading at HKD 37.42; China Gold International (02099) is down 3.27%, trading at HKD 171.3; Shandong Gold (01787) is down 3.16%, trading at HKD 28.84.
On the news front, the unexpected surge in PPI inflation has raised expectations for interest rate hikes by the Federal Reserve, with the market now estimating a nearly 50% probability of a 25 basis point increase within the year. The U.S. government reported on Wednesday that the April PPI rose 6% year-on-year, the highest level since December 2022, while core PPI increased by 5.2%, both significantly exceeding market expectations. Both energy and transportation costs have risen, and inflation in the service sector has reached a four-year high. Additionally, the Senate has previously approved Walsh to serve as a Federal Reserve governor for a term of 14 years. With this appointment being confirmed, Walsh will officially take office after completing the relevant signing procedures at the White House, succeeding the current chairman Powell, whose term ends on May 15
