On Monday (October 21), gold stocks in the Hong Kong stock market defied trends to rise, with several stocks like Lingbao Gold, Zhaojin Mining, China Gold International, and Zijin Mining increasing by over 3%. Among them, Lingbao Gold rose by 5.67%. Gold prices reached a historic high of $2,724.47 per ounce, primarily influenced by geopolitical tensions in the Middle East and uncertainty surrounding the U.S. presidential election.
Currently, the threat of conflict between Israel and Iran is escalating, and although U.S. President Biden has called for a ceasefire, Israel's hardline stance keeps the situation tense. Meanwhile, the U.S. election is reaching a fever pitch, with the intense competition between Trump and Harris adding to market uncertainty. Gold, as a safe haven asset, has benefited from these factors, having risen more than 30% since the beginning of the year. Additionally, ongoing purchases by global central banks and expectations of continued Fed easing have also supported gold prices.
From a macroeconomic perspective, Deutsche Bank's latest report points out that gold prices have risen significantly at times this year without relying on financial fair value support. The Fed still has room for further easing, which is expected to drive gold prices to exceed their financial fair value by the year's end, achieving the largest increase since 1998. At the same time, the relative rate of change between gold and the dollar has reached its highest level in the past 25 years, indicating that global investors' demand for safe-haven assets remains strong.
In terms of the stock market, despite increasing global economic and market risks, gold stocks have attracted investors due to their safe haven nature. As expectations for continued Fed easing persist, investors will continue to focus on the trend of gold prices and their impact on related stocks.
