Hong Kong Stock Review: The Two Sides of Rising Gold and Falling Technology

Hong Kong stocks are under pressure, while some gold stocks and commodities have once again strengthened against the trend. International gold prices have risen above $4,600, as the market re-evaluates dollar credit, fiscal risks, geopolitical issues, and liquidity uncertainties.

Gold has surged recently, with one of the direct catalysts being the U.S. Treasury's expansion of long-term bond repurchases. The dollar has weakened accordingly, coupled with cooling U.S. economic data, leading the market to reassess the marginal easing of the monetary environment.

On the other hand, the yield on 30-year U.S. bonds remains at a 19-year high. This means that while gold is rising, long-term bond yields are also high, and the market is concerned not just about interest rates, but also about the U.S. fiscal deficit and long-term purchasing power of the currency.

Thus, today some gold stocks in Hong Kong have strengthened against the trend. However, many gold stocks have already doubled from their lows, and gold prices themselves are still far from historical highs, so the space for further valuation increases is naturally not as great as before. Moving forward, it will be interesting to observe whether the rise in gold will continue to transmit to silver, Bitcoin, and other assets that also benefit from concerns over dollar credit.

The real pressure on Hong Kong stocks comes from technology stocks.

Alibaba announced a placement of approximately HKD 80 billion in shares, causing its stock price to drop by more than 10% at one point. Although the company believes that the payback period for AI investments has shortened from three years to about two and a half years, the market is primarily focused on equity dilution and when the massive AI capital expenditures will yield returns.

The external environment is also cautious. Asian technology stocks are generally under pressure, and U.S. Nasdaq futures are also weakening. The breakdown of trade negotiations between the U.S. and Canada, along with uncertainties surrounding new sanctions on Iran, naturally leads funds to prefer buying gold rather than continuing to value high-beta assets.

For the past week, the market has been trading around the same macro issue—money is becoming more expensive. Gold benefits from dollar, fiscal, and geopolitical risks; technology stocks, on the other hand, face high long-term interest rates, massive capital expenditures, and financing costs. Both sides are essentially different expressions of the same issue.

There are several key events this week. Tonight, the PDD earnings report will serve as the latest verification of domestic consumption and e-commerce competition; on Wednesday, NVIDIA's earnings report and the U.S. Core PCE will be released, and on Friday, Warsh will give his first important policy speech at Jackson Hole.

Among these, NVIDIA's potential impact may be significant. Recently, the market has been particularly focused on the company's provision of financing support and guarantees for data center projects. If clearer data on computing power demand and capital expenditure returns can be provided, it may temporarily alleviate concerns over AI financing and stabilize market sentiment