{"id":440661,"date":"2026-10-23T07:00:15","date_gmt":"2026-10-23T00:00:15","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/hsbc-gold-no-short-term-hedge-for-stocks-but-three-forces-keep-long-term-case-intact-440661\/"},"modified":"2026-10-23T07:00:15","modified_gmt":"2026-10-23T00:00:15","slug":"hsbc-gold-no-short-term-hedge-for-stocks-but-three-forces-keep-long-term-case-intact","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/hsbc-gold-no-short-term-hedge-for-stocks-but-three-forces-keep-long-term-case-intact-440661\/","title":{"rendered":"HSBC: Gold no short-term hedge for stocks, but three forces keep long-term case intact"},"content":{"rendered":"<div>\n<p dir=\"ltr\">Spot gold fell to under $4,040 an ounce on Thursday, its lowest since August and roughly a quarter below its January peak. The move came as the Nasdaq <a href=\"https:\/\/investinglive.com\/news\/investinglive-americas-fx-news-wrap-22-oct-nasdaq-sinks-as-ai-worries-bite-treasury-yields-tumble\/\" rel=\"follow\">dropped more than 2.5%<\/a>, the kind of joint sell-off HSBC describes. The main pressure on bullion runs through oil: crude (Brent) above $110 a barrel feeds inflation fears, which push up expectations of further Fed tightening and lift Treasury yields and the dollar, raising the cost of holding a metal that pays no interest. Near-term direction is likely to depend on whether equities stabilise and margin pressure eases, and on whether yields pull back from current highs. Steady central bank demand may limit the downside, but it has not been enough to reverse the trend.<\/p>\n<p dir=\"ltr\">&#8212;<\/p>\n<p dir=\"ltr\">\nHSBC argues gold still belongs in portfolios for the long run, but warns that when stocks fall, crowded leveraged positions turn the metal into a source of cash rather than protection.<\/p>\n<p dir=\"ltr\">Summary:<\/p>\n<ul dir=\"ltr\">\n<li>HSBC Asset Management strategists say gold\u2019s bull run, which took prices well above $5,000 an ounce earlier this year, has stalled, with prices lower and volatility higher.<\/li>\n<li>They say gold has failed to protect portfolios during recent stock market falls, because leveraged positions in gold are sold to meet margin calls.<\/li>\n<li>HSBC still sees a strategic case for gold based on the debasement trade, central bank reserve diversification and geopolitical fragmentation.<\/li>\n<li>The latest report gives no price target. In July, HSBC said gold would likely trade in a range near term, identified US yields as the main driver, and expected further gains by year-end.<\/li>\n<li>HSBC\u2019s chief precious metals analyst said in May that gold\u2019s decline during the Iran conflict showed it working as a source of liquidity, not failing as a haven.<\/li>\n<li>Spot gold fell to around $4,040 on Thursday, its lowest level since August. Its lower still as I psot now.<\/li>\n<\/ul>\n<p dir=\"ltr\">\nGold still has a long-term role in portfolios, according to strategists at HSBC Asset Management, but investors should not rely on it to cushion short-term stock market falls. Forced selling by leveraged holders has repeatedly pulled the metal down alongside equities.<\/p>\n<p dir=\"ltr\">In a recent report, the strategists said gold\u2019s strong rally, which lifted prices well above $5,000 an ounce earlier this year, has stalled, with prices falling and volatility rising. Gold has underperformed since that early-year run as soaring oil prices, rising interest rates and higher bond yields weighed on demand. Even so, they argued that the long-term case for holding gold remains intact, supported by geopolitical fragmentation and by central banks diversifying their reserves. Concerns about debt and inflation should also keep the so-called debasement trade alive, in which investors move capital into hard assets. They added that while volatility has risen, it is not extreme by historical standards.<\/p>\n<p dir=\"ltr\">The more pointed message concerns gold\u2019s behaviour during equity sell-offs. Because a large amount of leveraged money has piled into gold, a sharp fall in stocks triggers margin calls, and investors sell gold to raise cash. HSBC concluded that gold may be a solid hedge against systemic risk in a multipolar world, but cannot be counted on to reduce short-term volatility. No single asset protects against every type of stress, the strategists said, which is why investors should diversify the assets they rely on for diversification.<\/p>\n<p dir=\"ltr\">Thursday\u2019s trading fit that description. Spot gold fell to around $4,050 an ounce, its lowest level since August, on the same day the Nasdaq slid more than 2.5% in a broad sell-off in chip stocks.<\/p>\n<p dir=\"ltr\">Notably, the latest report gives no price target. That contrasts with HSBC\u2019s more confident tone in July, when Global Chief Investment Officer Willem Sels and Global Head of Wealth Insights Lucia Ku said US Treasury yields had become the main driver of gold prices. They noted at the time that gold had not rallied during the Middle East conflict and had largely moved in line with equities. They expected the metal to stay in a range in the near term because of elevated real yields and a strong dollar, but still anticipated further gains by year-end on the back of diversification demand, central bank purchases and steady ETF inflows. With gold now about a quarter below its January peak, the absence of a target in the latest note suggests a more cautious stance.<\/p>\n<p dir=\"ltr\">James Steel, HSBC\u2019s chief precious metals analyst, put a different spin on the same pattern in an interview in May. He rejected claims that gold\u2019s fall after the strikes on Iran showed it had failed as a safe haven. As oil prices rose, inflation fears returned, bond yields and the dollar climbed and equities fell, investors needed cash, and gold provided it. In his view, the liquidation was a reaction to stress in wider financial markets: investors were cashing in an insurance policy, not abandoning it. Steel also noted that gold\u2019s old positive link with oil had broken down, with the correlation weak and at times negative.<\/p>\n<p dir=\"ltr\">He pointed to structural support from Asia, where regulatory changes now allow major Chinese insurers and Indian asset managers to hold bullion. That has shifted Chinese demand towards large institutional bars and away from jewellery and coins. He said more asset managers that had never held gold are starting to add it as an alternative asset, valued because it is both a hard asset and highly liquid.<\/p>\n<p dir=\"ltr\">Read together, HSBC\u2019s comments describe a market caught between two forces: long-term structural demand on one side, and short-term sensitivity to yields, the dollar and equity-driven forced selling on the other. Until Treasury yields ease or stock market volatility settles, the second force is likely to dominate.<\/p>\n<p dir=\"ltr\">&#8212;<\/p>\n<p dir=\"ltr\">\n<p dir=\"ltr\">Gold is falling. But what happens next? Watch this week&#8217;s Exness Trade of the Week for a closer look at XAUUSD.What&#8217;s really behind gold&#8217;s latest decline? Watch the video to explore the market forces shaping its next move.Could gold be heading for another leg lower? See what Treasury yields, technology stocks and price action may be telling us.Gold traders, there&#8217;s more to this decline than meets the eye. Watch our latest market analysis.Is gold&#8217;s recent selloff a warning sign or a potential turning point? Explore both scenarios in this week&#8217;s Exness Trade of the Week.What do US Treasury yields and tech stocks have to do with gold? Watch the video to see how these markets may be connected.Before drawing conclusions about gold&#8217;s next move, consider the bigger picture. Watch our latest XAUUSD analysis.Gold has been under pressure. What could change the outlook? Find out what market developments deserve attention next.One market, several moving parts. Discover how gold&#8217;s price action, bond yields and technology stocks fit into the current picture.Where could XAUUSD go from here? Watch this week&#8217;s Exness Trade of the Week for the key market factors and possible scenarios.<\/p>\n<p dir=\"ltr\">\n<p>                            This article was written by Eamonn Sheridan at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Spot gold fell to under $4,040 an ounce on Thursday, its lowest since August and roughly a quarter below its January peak. The move came as the Nasdaq dropped more than 2.5%,&hellip;<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-440661","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/440661","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=440661"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/440661\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=440661"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=440661"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=440661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}