Understanding the Market | Gold Stocks Plunge During Trading as Rate Cut Expectations Weaken, Goldman Sachs Indicates Further Strength Risk for the Dollar
Gold stocks plummeted during the session, with Zijin Mining down 5.85%, SD GOLD down 3.51%, CHINAGOLDINTL down 2.14%, and LINGBAO GOLD down 2.04%. The US dollar remains strong, with the dollar index surpassing 110, reaching a two-year high. Goldman Sachs expects the dollar to rise about 5% over the next year, with further strengthening risks. Market confidence in the Federal Reserve cutting interest rates has weakened, and changes in inflation expectations have a significant impact on gold prices
According to Zhitong Finance APP, gold stocks plummeted during trading. As of the time of publication, Zijin Mining (02899) fell by 5.85%, trading at HKD 14.48; SD-GOLD (01787) dropped by 3.51%, trading at HKD 13.74; CHINAGOLDINTL (02099) decreased by 2.14%, trading at HKD 43.45; LINGBAO GOLD (03330) fell by 2.04%, trading at HKD 3.85.
On the news front, following the first non-farm data of 2025, the US dollar continued to be strong. As of January 13, the dollar index briefly broke through the 110 mark, reaching a new high in over two years. Goldman Sachs predicts that with the implementation of new tariffs and the continued strong performance of the US economy, the dollar will rise by about 5% over the next year, with risks of further strengthening. It is worth noting that this is the second time Goldman Sachs has raised its dollar forecast in about two months. Due to the ongoing growth of the US economy and the potential for tariffs proposed by Trump to exacerbate inflation, market confidence in the Federal Reserve continuing to cut interest rates has recently weakened.
Industry insiders analyze that the current changes in inflation expectations have a significant impact on gold prices. If US inflation expectations continue to rise or remain high, it may support gold prices. The America First policy under Trump is expected to heat up in Q1 2025, with the market anticipating better performance of the US economy and a stronger dollar, and he may suppress inflation, making the rebound in inflation expectations unsustainable, which is unfavorable for gold