Hong Kong’s precious metals market has been jittery lately, with gold prices showing particular weakness. On May 16, 2025, spot gold slipped to $3,213.56 per ounce, down 0.8% for the day and 3.3% for the week—its worst weekly performance since November last year. A stronger U.S. dollar and unexpectedly robust economic data out of the U.S. were key drivers behind the decline.
According to the U.S. Commerce Department, housing starts in April rose by 1.6% on a seasonally adjusted annual rate to 1.361 million units, defying forecasts for a slight dip. While single-family housing starts edged down 2.1% to 927,000 units, this was offset by gains in multi-family construction. The numbers point to underlying resilience in the U.S. housing market, even with interest rates remaining elevated.
These positive indicators have weakened demand for traditional safe-haven assets like gold, as investors now see the U.S. economy as being on firmer footing. Easing tensions in U.S.-China trade relations and a rising dollar have further diluted gold’s appeal. A stronger dollar typically draws investors toward dollar-based assets, reducing the demand for gold.
On the technical side, analysts note that gold is facing downward pressure. If prices fail to hold above the critical $3,200 support level, there’s potential for a further slide toward $3,100 or lower.
While geopolitical risks haven’t fully faded, risk appetite among investors has clearly cooled, with many now in wait-and-see mode. Market attention has shifted to the upcoming Federal Reserve meeting minutes and economic data releases, which could offer clues on potential policy shifts—and whether gold might stage a recovery in the second half of the year.
For local investors, this is a time to closely monitor global economic signals and central bank policy tones. Asset allocation should be adjusted cautiously according to individual risk tolerance. In the near term, gold may remain in consolidation until a new catalyst emerges.
