Hong Kong Stock Moves | Gold Stocks Lead Declines as Fed Holds Hawkish Stance, Inflation Pressure May Squeeze Rate Cut Room

According to Cailian Press, gold stocks led the decline. As of press time, China Gold International (02099) fell 7.2% to HKD 152; Zijin Gold International (02259) dropped 6.36% to HKD 172.3; Lingbao Gold (03330) declined 5.45% to HKD 26; Zijin Mining (02899) decreased 4.98% to HKD 35.48.

On the economic front, data released by the U.S. Bureau of Labor Statistics on the 18th showed that the Producer Price Index (PPI) for February increased significantly both month-over-month and year-over-year, exceeding expectations and indicating renewed inflationary pressures in the U.S. Traders further reduced bets on the Federal Reserve cutting interest rates this year, causing the dollar index to rise slightly and putting pressure on gold, silver, and other precious metals.

Additionally, the Federal Reserve announced that the federal funds rate will remain in the range of 3.50% to 3.75%, in line with market expectations. According to the latest dot plot, Fed policymakers expect to cut rates once this year and again in 2027, though the exact timing remains unclear. Amid high oil prices, Powell maintained a cautious hawkish stance, stating that U.S. inflation remains stubborn, and uncertainties are rising. If inflation shows no progress, there will be no rate cuts. He also mentioned that several Fed officials favor reducing the number of future rate cuts.