pennfierceiiispinningreel6000| The Federal Reserve enters the window for interest rate cuts: the probability of gold price rising has increased significantly
News summary
The Federal Reserve's expectation of cutting interest rates in September increased, and gold prices rose by an average of 8% in the first three months, but the trend of gold prices after the interest rate cut is uncertain.pennfierceiiispinningreel6000Central banks in emerging countries continue to purchase gold, and the medium-and long-term gold price is still in an upward stage.
Newsletter text
[September may become a key point for the Federal Reserve to cut interest rates, and gold prices are expected to rise]
As the U.S. election approaches, non-agricultural data slows down and inflation risks decline, September this year may become a critical period for the Federal Reserve to implement its policy of cutting interest rates. The potential possibility of cutting interest rates is likely to become a major factor driving the rise of gold prices.
By analyzing the changes in gold prices before and after the Federal Reserve cut interest rates 12 times since 1970, it can be found that gold prices generally showed an upward trend 1 to 3 months before the interest rate cut, with an average growth rate of 8%. However, after the implementation of the interest rate cut policy, the rise and fall trend of gold prices is uncertain, and the subsequent direction of the fundamentals of the U.S. economy will be the decisive factor.
If after the interest rate cut policy, the U.S. economic growth rate increases slightly and secondary inflation risks are effectively controlled, the promotion effect of the interest rate cut on gold prices may be weakened, and gold prices will face correction pressure.
At the same time, the global process of "de-dollarization" and diversification of the international reserve system are leading to a continued increase in gold purchases by central banks in emerging countries. This phenomenon makes gold prices expected to maintain an upward trend in the medium and long term.
The expected implementation of the interest rate cut policy is expected to further catalyze the rise of gold prices. On the eve of interest rate cuts since 1970, gold prices have generally risen, with an average increase of 8%. After the implementation of the interest rate cut policy, gold prices have a 50 - 50 probability of rising and falling, with the largest increase reaching 43%, and the largest decrease being 24%.
Specifically, the high point of gold prices before interest rate cuts is usually ahead of the first day of interest cuts, with an average of 11 days leading. After the launch of the interest rate cut policy, the trend of gold prices is highly uncertain, mainly affected by factors such as inflation level, the US dollar index, the trend of the US economy, and changes in demand for gold reserves.
Risk warnings include the unexpected resilience of the U.S. economy and the uncertainty of geopolitical risks. Investors need to pay close attention to changes in these factors to make informed investment decisions.
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