Debon Securities: The expectation of the Federal Reserve's interest rate cuts continues to rise, and gold prices are expected to continue to rise
Debon Securities released a research report stating that in the long term, gold prices are expected to continue to rise due to factors such as the expansion of the US dollar. In the short term, the rising expectations of Federal Reserve interest rate cuts and the stimulation from CPI data may lead to an end of the fluctuation in gold prices, returning to an upward trend. Investors are recommended to pay attention to related stocks such as Zijin Mining and ZHONGJIN GOLD. Recent expectations for interest rate cuts have continued to rise, which is expected to have a positive impact on gold prices
According to the Zhitong Finance APP, Debang Securities has released a research report stating that in the long term, gold prices are expected to continue to rise driven by factors such as the expansion of the US dollar scale; in the short term, the sustained increase in expectations for Federal Reserve interest rate cuts and recent short-term stimuli from data such as CPI are likely to allow gold prices to end their fluctuations and return to an upward trend. Opportunities for allocation in gold and related stocks are expected to gradually emerge, with recommendations including: Zijin Mining (601899.SH), ZHONGJIN GOLD (600489.SH), Shandong Gold (600547.SH), Shanjin International (000975.SZ), Hunan Gold (002155.SZ), Chifeng Gold (600988.SH), Shengda Resources (000603.SZ), and Hengbang Co., Ltd. (0022237.SZ).
Event: The latest data from the U.S. Bureau of Labor Statistics shows that in February, the Consumer Price Index (CPI) rose 2.8% year-on-year, lower than the market expectation of 2.9%, while the core CPI year-on-year growth rate fell to 3.1%, hitting a nearly four-year low. After the data was released, the 30-day Federal Funds rate rose from 96.33 to around 96.38, with market expectations for interest rate cuts increasing due to the CPI data.
Recent expectations for U.S. interest rate cuts have continued to rise, which is expected to boost gold prices. From the performance of gold prices, since mid-February, gold prices have maintained a fluctuating trend; however, on the other hand, from the market's expectations for interest rate cuts, the 30-day Federal Funds rate has continued to rise since mid-February, reaching a high of 96.53. As of March 12, 2025, according to CME data, the probability of the Federal Reserve starting to cut rates in June is 79.8%, up from 78.7% a week ago and 33.7% a month ago. Recent expectations for interest rate cuts have continued to rise, but gold prices have faced some pullback pressure after a rapid increase earlier and have not consistently correlated with the expectations for interest rate cuts. Currently, the market's expectations for interest rate cuts, driven by CPI data, may further increase, potentially leading to a sustained rise in gold prices.
The process of de-dollarization continues, driving long-term growth in gold prices. The scale of the U.S. dollar continues to increase, with the M2 level in the U.S. expected to rise continuously in the fourth quarter of 2024, where the M2 scale of the dollar reached 21.3 trillion, 21.5 trillion, and 21.6 trillion in October, November, and December, respectively, with month-on-month increases of approximately 0.31%, 0.93%, and 0.86%. In addition, the overall reserve scale of the dollar is also gradually declining; as of the third quarter of 2024, the dollar accounted for about 53.4% of global foreign exchange reserves, down 1.4 percentage points from 54.8% in the same period last year. With the continuous expansion of the dollar scale and the gradual unfolding of global de-dollarization, it is expected that gold prices will maintain an upward trend over the long term