Asian Gold Stocks Slide as Rate Hike Bets Surge
Asian gold mining stocks declined across the board on Monday after gold prices plummeted more than 3% on Friday due to Federal Reserve Chair Kevin Warsh's hawkish comments.
The selloff followed a sharp increase in bets on a September rate hike, with the probability rising to around 58%, up from about 36% previously. This led to a decline in gold prices, which fell to $4,567 an ounce, its lowest since August 20.
Lingbao Group was among the hardest hit, falling 5.7% to HK$22.34, while Shandong Gold bucked the trend with an 8.1% gain to HK$27.58. Australian miners were also lower, with Evolution Mining down 5.1%, Northern Star Resources off 4.3%, and Newcrest Mining falling 5.5%.
The reversal in bullion prices poses a threat to the earnings momentum that had supported the sector's recent advance, particularly for companies with higher-cost operations. Shandong Gold was an exception, extending its gains after a strong first-half earnings report showed attributable net profit of RMB3.54 billion, up 26.2% year over year.