Asian gold stocks rise as bullion rebounds from near six-week low

Asian gold stocks experienced a surge on Friday as the price of bullion recovered from a six-week low. This upward movement was driven by easing oil prices and a weaker dollar, which helped counteract concerns about potential further interest rate hikes by the U.S. Federal Reserve. Gold prices surged over 2% on Thursday, recovering from the previous day's low, as declining oil prices quelled inflation worries and the dollar weakened.

On Friday, spot gold prices reached $4,360.36 per ounce, while U.S. gold futures increased by 0.3% to $4,399.70. This rebound came after a significant drop on Wednesday, following the Federal Reserve's decision to raise interest rates by 25 basis points to 3.75%-4% and hinting at additional rate hikes this year. Lower Treasury yields and a decline in the dollar bolstered interest in the non-yielding metal.

Notable gains among Asian gold miners included Sumitomo Metal Mining and Westgold Resources, both up by 2.4%, Genesis Minerals with a 4.3% increase, Evolution Mining adding 2.9%, and Northern Star Resources rising 2.5%. Other notable gains were registered by Regis Resources (1.9%), Ramelius Resources (2.3%), and Perseus Mining (1.9%).

Chinese miners also benefited, with Zijin Gold International rising 1%, Chifeng Jilong Gold Mining gaining 1.7%, and Zijin Mining Group remaining flat at 0.1%. However, some stocks declined, with Lingbao Gold falling 1.2%, Shandong Gold dropping 2.6%, and Zhaojin Mining Industry falling 3.3%. The recovery in gold prices occurred as oil prices continued their downward trend, alleviating concerns about higher energy costs potentially keeping inflation elevated and necessitating tighter monetary policy.

Brent crude oil prices fell about 1% to around $103.77 per barrel on Friday. Despite the positive momentum, the outlook for gold remains contingent on the trajectory of U.S. monetary policy, with the Federal Reserve's September rate hike marking its first in three years, and 16 of the 18 policymakers at the Fed anticipating at least one further rate increase by the end of 2026.