Guotai Haitong: The Federal Reserve's interest rate cuts extend the medium-term trend, and gold prices may fluctuate at high levels
Guotai Haitong released a research report indicating that poor U.S. employment data has led to an increase in market expectations for a Federal Reserve rate cut in September, and liquidity may become marginally looser. Gold prices are expected to fluctuate at high levels, while industrial metal prices are likely to rise due to seasonal demand recovery and favorable macro policies. The unexpected decline in U.S. non-farm payrolls in August and the rise in the unemployment rate indicate increased risks in the labor market. Attention should be paid to the upcoming inflation data and its impact on gold prices
According to the Zhitong Finance APP, Guotai Haitong released a research report stating that the U.S. employment data unexpectedly dropped, leading to an increase in market expectations for the Federal Reserve to cut interest rates in September, with liquidity potentially becoming marginally loose. At the same time, there is uncertainty regarding U.S. tariff policies and inflation, which may cause gold prices to fluctuate at high levels. In terms of industrial metals, the market is waiting for the gradual recovery of demand in the peak season, as well as the boost from favorable macroeconomic factors both domestically and internationally, which is expected to provide upward momentum for prices.
The main points from Guotai Haitong are as follows:
Cycle Judgment: The U.S. employment data for August unexpectedly dropped, increasing the downside risk in the labor market. The market expects that the Federal Reserve is highly likely to restart interest rate cuts in September, with liquidity potentially becoming marginally loose; at the same time, there remains uncertainty regarding U.S. tariff policies and inflation, which may lead to gold prices fluctuating at high levels. Recently, domestic manufacturing sentiment has slightly improved, and favorable macroeconomic policies are anticipated, which may provide upward momentum for industrial metal prices. As we enter the traditional peak season, the processing operating rate in downstream industries has increased, and the market is waiting for the recovery of terminal demand. Meanwhile, supply-side disruptions still exist, and the supply-demand pattern is marginally improving, providing strong support for industrial metal prices.
Precious Metals: Attention should be paid to U.S. inflation's guidance on interest rate paths, with prices expected to fluctuate.**
In August, the U.S. non-farm payrolls unexpectedly fell to 22,000 (previous value 73,000, forecast 75,000), and ADP employment figures also unexpectedly declined, while the unemployment rate rose to 4.3%. The downside risk in the U.S. labor market has increased, leading to rising market expectations for the Federal Reserve to cut interest rates in September. Additionally, on September 5, Trump signed an executive order adjusting the scope of tariffs, including reducing reciprocal tariffs on certain goods to zero. There is uncertainty regarding U.S. tariff policies, and with marginally loose liquidity, this provides support for gold prices. Furthermore, attention should be paid to the upcoming U.S. inflation data for August, as under the current circumstances, precious metal prices are expected to fluctuate. In the medium to long term, the risk of U.S. federal government debt remains, and the status of the U.S. dollar faces challenges. Under the reconstruction of the global monetary system, gold is expected to continue performing well.
Industrial Metals: Waiting for the recovery of peak season demand and macroeconomic boosts to prices.**
On the macro front, recent data from the U.S. indicates a weakening labor market, increasing the probability of the Federal Reserve cutting interest rates in September, with a liquidity turning point approaching. Meanwhile, the domestic manufacturing PMI index for August rose by 0.1 percentage points to 49.4%, indicating an improvement in sentiment. Subsequent favorable macroeconomic policies are expected to continue to be released, gradually repairing demand expectations and providing upward momentum for industrial metal prices. Additionally, the market is still in a transitional phase between the off-peak and peak seasons, with the processing operating rates of major industrial metals in downstream industries having increased. At the same time, some varieties are experiencing temporary supply-side disruptions due to maintenance and seasonal factors, which may marginally improve the supply-demand pattern and provide support for prices.
Risk Warning: Downstream demand weaker than expected, large supply-side releases, and the pace of Federal Reserve interest rate cuts not meeting expectations
