Gold-related stocks are among the leading decliners in the Hong Kong market.

As of writing, shares of Lingbao Gold Company Ltd (03330.HK) fell 7.03% to HKD 13.76.

Shares of Chifeng Jilong Gold Mining Co., Ltd (06693.HK) dropped 5.96% to HKD 25.86.

Shandong Gold Mining Co., Ltd (01787.HK) shares declined 5.31% to HKD 20.32.

Shares of Zijin Mining Group Co., Ltd (02899.HK) decreased by 4.36% to HKD 30.68.

Market Drivers Behind the Decline

Geopolitical tensions in the Middle East have pushed energy prices higher, reinforcing market expectations for a tighter monetary policy stance.

Adding to the pressure, Goldman Sachs has significantly reduced its year-end gold price forecast for 2026 by $500 per ounce, citing the diminished likelihood of the Federal Reserve implementing any interest rate cuts this year.

Analysts at the investment bank have revised their December gold price target down to $4,900 per ounce.

This adjustment suggests that while gold prices may still rise in the second half of the year, the potential gains are now expected to be more modest than previously anticipated.

Broader Market Analysis

Other market observers have noted a technical rebound in gold prices following news of eased US-Iran tensions and a pullback in the US dollar.

However, the foundation for this recovery is considered fragile, with significant resistance expected in the $4,450 to $4,500 per ounce range where many investors are likely holding losing positions, making a sharp, sustained rally less probable.

From a medium to long-term perspective, the fundamental narrative supporting higher gold prices remains intact despite headwinds from oil-driven inflation concerns and capital flows into the AI sector.

Key structural supports for gold, including the global debt crisis, the trend towards dedollarization, strategic purchases by central banks, and the persistence of geopolitical risks, have not been undermined.