Understanding the Market | Gold stocks collectively rebound as the Federal Reserve's hawkish expectations cool down, and the weakening dollar index supports the rebound in gold prices
Gold stocks collectively rebounded, with ZHAOJIN MINING rising 3.89%, Zijin Mining rising 2.42%, and CHINAGOLDINTL rising 2.56%. The U.S. November PCE and core PCE data came in below expectations, leading to increased market expectations for a Federal Reserve interest rate cut, a weakening dollar index, and gold prices rebounding to over $2,630. Guojin Securities expects gold prices to fluctuate in the short term, while in the medium term, due to factors such as geopolitical issues, fiscal deficits, and inflation expectations, gold prices are expected to rise to $2,600-$2,700 per ounce, with a potential challenge to $3,000 in the future
According to Zhitong Finance APP, gold stocks have collectively rebounded. As of the time of writing, ZHAOJIN MINING (01818) rose by 3.89% to HKD 10.68; ZIJIN MINING (02899) increased by 2.42% to HKD 14.4; CHINAGOLDINTL (02099) went up by 2.56% to HKD 38.05; and Shandong Gold (01787) climbed by 1.74% to HKD 12.86.
On the news front, the U.S. November PCE and core PCE data fell short of expectations, leading the market to increase bets on the Federal Reserve cutting interest rates in March next year. The U.S. dollar index retreated, and U.S. Treasury yields softened across the board, resulting in an overall increase in global risk appetite. The dollar index has pulled back from its highs. Driven by the weakening dollar, gold has rebounded, rising above the USD 2630 level during Friday's U.S. trading session.
Guojin Securities believes that there is room for fluctuation in gold prices in the short term. In the medium term, ongoing geopolitical volatility, future fiscal deficits and inflation expectations, as well as global central bank gold purchases, are expected to boost gold price performance. The firm predicts that the gold price's operating center in 2025 is likely to rise to USD 2600-2700 per ounce. With Trump in office, there is a significant possibility of an increase in the fiscal deficit rate, and re-inflation may follow. The combination of these two core factors, along with the return of SPDR holdings based on interest rate cut trades, suggests that London spot gold may aim for USD 3000