Understanding the Market | Most Gold Stocks Rise as the Federal Reserve Cuts Interest Rates as Expected; In the Early Stages of the Rate Cut Cycle, Gold Prices May Continue to Fluctuate and Trend Upward
Most gold stocks rose, with LINGBAO GOLD up 4.74%, ZHAOJIN MINING up 4.5%, CHI SILVER GP up 4%, and SD GOLD up 2.97%. The Federal Reserve lowered interest rates by 25 basis points as expected, amid slowing economic growth, decelerating job growth, rising unemployment rates, and high inflation. Analysts believe that in the early stages of the rate-cutting cycle, gold prices will continue to fluctuate upward, and the market will focus on re-inflation risks, making gold more attractive in the early stages of the rate-cutting cycle
According to Zhitong Finance APP, most gold stocks have risen. As of the time of publication, Lingbao Gold (03330) rose by 4.74% to HKD 17.24; Zhaojin Mining (01818) rose by 4.5% to HKD 29.28; CHI SILVER GP (00815) rose by 4% to HKD 0.52; SD GOLD (01787) rose by 2.97% to HKD 36.74.
In terms of news, recently, the U.S. non-farm payroll data for August was released. Huafu Securities believes that the Federal Reserve's decision to cut interest rates by 25 basis points as expected aligns with forecasts, and for the first time in its statement, it acknowledged "the slowdown in economic growth in the first half of the year, the slowdown in job growth, a slight increase in the unemployment rate, and persistently high inflation," showing a more dovish tone regarding balancing inflation and employment risks. Precious metals have performed strongly driven by interest rate cuts and risk aversion. Changjiang Securities stated that the gold price will continue its upward trend in the early stages of the rate-cutting cycle. It is important to note that under the learning effect, the market may focus on re-inflation risks after the rate cut, which will trigger a significant repair of the silver-gold ratio.
CITIC Construction Investment pointed out that the seasonally adjusted non-farm employment population for August in the U.S. and the full-year non-farm employment forecast for 2025 were both lower than expected. The unemployment rate in August reached its highest level since October 2021, with the number of first-time unemployment claims exceeding expectations, and the University of Michigan consumer confidence index for September falling below expectations, indicating a weak employment situation in the U.S. and a potential for economic recession. At the same time, the U.S. PPI for August was significantly lower than expected, while the CPI and core CPI met expectations. The inflation situation led to the Federal Reserve's rate cut in September, and the market expects the Fed to cut rates two more times before the end of 2025. In this context, the financial attributes of gold make it more attractive in the early and mid-stages of the rate-cutting cycle
