Rate Hike Expectations Rise: European Natural Resources Fund Sees Shift in Market Sentiment

The European Natural Resources Fund is now expecting a rate hike in September, with the odds rising from 53.7% to 81.9%. Commodity prices are also on the rise, particularly copper and uranium. Li Gangfeng, an analyst at the fund, attributes this increase in expectations to the market's response to geopolitical tensions.

Gold prices have been affected by these increased rate hike expectations, falling below $4,100 for two days before rebounding. However, physical demand is still driving up gold prices, with a 64.4% surge in 2025 despite reduced net long positions in futures markets.

The fund's U.S. dollar-denominated gold price, North American gold-mining stock ratio has declined by 4.6%, indicating that mining stocks are underperforming physical gold. This is attributed to the growing emphasis on environmental, social, and governance (ESG) factors in investment decisions.