Understanding the Market | Gold stocks generally rise as the Federal Reserve's latest interest rate decision lands, with spot gold initially suppressed before rebounding
Complete. Here is the key summaryThe Federal Reserve maintains interest rates, and gold stocks rise broadly. Lingbao Gold and China Gold International both see increases of over 4%. Spot gold initially dipped but later recovered, surpassing the $4,100 mark. Everbright Futures pointed out that the market is focused on the Federal Reserve's policies and the probability of a rate hike in September, suggesting a defensive approach with light positions to observe and respond to geopolitical and macroeconomic uncertainties
According to Zhitong Finance APP, gold stocks rose broadly this morning. As of the time of writing, Lingbao Gold (03330) rose 4.75% to HKD 19.86; China Gold International (02099) rose 4.72% to HKD 184.2; Zijin Mining International (02259) rose 4.76% to HKD 123.3; Chifeng Gold (06693) rose 4.36% to HKD 34.46.
On the news front, on Wednesday, spot gold staged a strong reversal, quickly surging after the Federal Reserve announced it would keep interest rates unchanged, reclaiming the USD 4,100 level. The Federal Reserve maintained the target range for the federal funds rate at 3.5% to 3.75%, but three regional Fed presidents voted against it, advocating for a 25 basis point rate hike, reflecting an increasing internal support for tightening policies. Notably, the market faced renewed conflict in Iran, with Brent crude oil soaring by 8% to return to USD 90, and the yield on 30-year U.S. Treasuries surged to its highest level since June 2007.
Everbright Futures believes that the Federal Reserve's interest rate decision has led to gold initially declining before rising, indicating that the market's focus is on Fed policy. With the probability of a rate hike in September increasing, any rebounds during this period should be viewed with caution. For gold, the overall strategy remains defensive in response to the current geopolitical fluctuations and macroeconomic uncertainties, with a focus on light positions and observation in an unclear market