Understanding the Market | Gold Stocks Rise Across the Board, Fed Starts Rate Cut Cycle, Long-term Gold Price Still Has Room to Rise
Gold stocks generally rose, with China Gold International up 4.19%, Zhaojin Mining up 3.88%, and Zijin Mining up 2.84%. Spot gold rose by over 1%, closing at $2586.56 per ounce. The Federal Reserve has started an interest rate cut cycle, cutting rates by 50 basis points, with good economic data performance. Huatai Securities believes that the impact of interest rate cuts on gold prices is limited, expecting gold prices to fluctuate at high levels in the short term, and in the long term, the trend of the U.S. economy and the election after the interest rate cut will drive gold prices higher
According to the Wise Finance APP, gold stocks generally rose in the morning session. As of the time of publication, China Gold International (02099) rose by 4.19% to HKD 33.6; Zhaojin Mining (01818) rose by 3.88% to HKD 13.4; Zijin Mining (02899) rose by 2.84% to HKD 15.92; Shandong Gold (01787) rose by 2.4% to HKD 16.2.
On the news front, overnight spot gold rose by over 1%, briefly returning above $2590 per ounce, ultimately closing up by 1.07% at $2586.56 per ounce. COMEX December gold futures rose by 0.5% in the final trading session, closing at $2611.5 per ounce. Previously, the Federal Reserve initiated this round of rate cuts slightly above expectations by 50 basis points, but Federal Reserve Chairman Powell emphasized that data determines the action principle. In terms of economic data, the initial jobless claims in the United States for the week ending September 14th recorded 219,000, the lowest since the week of May 18, 2024.
Huatai Securities pointed out that the combination of "50bp rate cut" and "hawkish stance" has a relatively limited impact on the gold price. Coupled with the current gold price being relatively sufficient for pricing in the U.S. rate cuts, the bank expects that in the short term, the gold price will likely continue to fluctuate at high levels without a significant deviation from market expectations. Looking ahead, the future trend of the U.S. economy and the U.S. presidential election after the rate cut will be important factors driving the gold price further upward. Based on the background of U.S. "loose fiscal policy" and "high inflation" under the rate cut structure, it is judged that the gold price may still have upward potential in the long term