HK Stock Market Move | Gold stocks across the board are falling, as tensions between the US and Iran rise, pushing up inflation expectations. The strength of the US dollar and US bonds is keeping precious metals valuation under pressure at high levels.

Golden stocks across the board fell, as of the time of publication, TONGGUAN GOLD (00340) dropped by 3.16% to 1.84 Hong Kong dollars; Shandong Gold Mining (01787) fell by 3.05% to 17.81 Hong Kong dollars; ZIJIN GOLD INTL (02259) fell by 2.85% to 95.5 Hong Kong dollars; Zijin Mining Group (02899) fell by 2.73% to 29.18 Hong Kong dollars; Chifeng Jilong Gold Mining (06693) fell by 2.25% to 27.84 Hong Kong dollars. On the news front, the escalating tension between the US and Iran has raised market expectations for a rate hike by the Federal Reserve. In the early trading on July 13, gold continued to decline, with spot gold breaking below $4100. The US Central Command reported that the US has launched its third round of military strikes against Iran within a week. Subsequently, the Iranian Revolutionary Guard Navy announced the blockade of the Strait of Hormuz early on the 12th, prohibiting passage of all ships until the ban is lifted. In addition, "Fed Whisperer" Nick Timiraos wrote an article stating that some Fed officials are becoming more concerned about inflation, and they may push for a discussion on raising interest rates at the Fed's meeting on July 28-29. Minmetals Futures believes that precious metals are fluctuating downward in the Middle East and under market expectations of a Fed rate hike. The collapse of temporary coordination negotiations between the US and Iran has led to a rebound in energy prices, with the inflation trading logic returning to the market mainstream. The steady rise in US Treasury yields, coupled with a strong US dollar index, has led to a continuous increase in real interest rates, suppressing the valuation of precious metals. With the Fed prioritizing taming inflation, if the US-Iran conflict escalates and disrupts the global oil supply pattern, the pace of US inflation decline may be forced to be postponed. In this context, the upside potential for precious metals is limited.