Understanding the Market | Gold stocks decline again as the Federal Reserve's hawkish rate cuts boost the dollar, putting pressure on precious metal prices in the short term
Gold stocks fell again. As of the time of writing, China Gold International dropped 2.49% to HKD 37.2; Shandong Gold fell 2.47% to HKD 12.62; Zijin Mining decreased 1.95% to HKD 14.08; Lingbao Gold declined 0.73% to HKD 2.72. On the news front, the Federal Reserve previously cut interest rates by 25 basis points as expected and projected only two rate cuts totaling 50 basis points next year, lower than previous expectations. Powell "hawkishly" stated that the Federal Reserve is cautious about rate cuts, indicating that it is "close to or has reached" the point of slowing or pausing rate cuts, emphasizing that future rate cuts will require new progress in inflation. After the announcement of the monetary policy meeting, the US dollar and US Treasury bonds surged, and spot gold briefly fell below the USD 2,600 mark. Huatai Futures stated that after the monetary policy meeting, the US dollar maintained a relatively strong stance, and the recent rate cuts by the central banks of the UK and Sweden further boosted the dollar, thereby suppressing precious metal prices. However, in the long term, the gradual easing of global monetary policy will still support precious metal prices
According to Zhitong Finance APP, gold stocks have fallen again. As of the time of writing, China Gold International (02099) is down 2.49%, trading at HKD 37.2; Shandong Gold (01787) is down 2.47%, trading at HKD 12.62; Zijin Mining (02899) is down 1.95%, trading at HKD 14.08; Lingbao Gold (03330) is down 0.73%, trading at HKD 2.72.
In terms of news, the Federal Reserve previously lowered interest rates by 25 basis points as expected and is projected to only cut rates twice next year for a total of 50 basis points, which is lower than previous expectations. Powell's "hawkish" stance indicates that the Federal Reserve is cautious about rate cuts, stating that it is currently "close to or has reached" the point of slowing down or pausing rate cuts, emphasizing that future rate cuts will require new progress in inflation. After the announcement of the monetary policy meeting, the US dollar and US Treasury bonds rose significantly, and spot gold once fell below the USD 2,600 mark.
Huatai Futures stated that after the monetary policy meeting, the US dollar maintained a relatively strong stance, and the recent rate cuts by the central banks of the UK and Sweden have further boosted the dollar, thereby suppressing precious metal prices. However, in the long term, the gradual easing of monetary policy globally will still support precious metal prices