Bank of America Securities has downgraded its ratings for Laopu Gold (06181) and Chow Tai Fook (01929) from "Buy" to "Neutral." The target price for Laopu Gold was reduced from HK$860 to HK$774, while Chow Tai Fook's target was lowered from HK$17.5 to HK$13.1. The bank noted that gold price volatility and slowing macroeconomic growth have increased risks to the growth outlook. The conflict in Iran has added uncertainty to the gold price uptrend. Over the past two years, rising gold prices have been a key driver for gold jewelry stocks, as gold is considered a reliable store of value. However, even if gold prices continue to rise, the bank believes there are limits to sustained growth in gold jewelry consumption in line with price increases. Consumer fatigue and fading product cycles may periodically weigh on sales. The bank pointed out that national gold and retail sales growth slowed to 13% in the first two months of this year, and it expects Chow Tai Fook's same-store sales growth in the first quarter to moderate from the 21% seen in the fourth quarter of last year. While a decline in gold prices could boost same-store sales growth for weight-based products, this may be offset by weaker gross margins and inventory write-downs. As for Laopu Gold, the bank raised its 2024 profit forecast by 20%, reflecting better-than-expected performance in the previous year and the first quarter of this year.