Understanding the Market | Gold stocks' afternoon decline widens, China Gold International and CHIFENG GOLD drop nearly 4%
Gold stocks expanded their decline in the afternoon, with China Gold International falling 3.82% to HKD 125.8, CHIFENG GOLD dropping 3.74% to HKD 28.34, and SD GOLD decreasing 3.7% to HKD 33.3. Spot gold fell below USD 3,640 per ounce, as the Federal Reserve cut interest rates by 25 basis points, with Powell stating that the policy balance has shifted. Huatai Futures believes that gold prices may be under pressure in the short term, but the logic of the easing cycle remains unchanged; Dongxing Securities pointed out that there is a risk of a short-term pullback in gold
According to Zhitong Finance APP, gold stocks expanded their decline in the afternoon. As of the time of publication, China Gold International (02099) fell by 3.82%, trading at HKD 125.8; CHIFENG GOLD (06693) dropped by 3.74%, trading at HKD 28.34; SD GOLD (01787) decreased by 3.7%, trading at HKD 33.3; Zijin Mining (02899) fell by 2.22%, trading at HKD 28.14.
In terms of news, on September 18, spot gold fell below USD 3,640 per ounce, down 0.69% for the day. On September 17, Wednesday, Eastern Time, the Federal Reserve announced a 25 basis point rate cut, adjusting the range to 4.00%-4.25%, marking the first rate cut by the Federal Reserve since December 2024. Federal Reserve Chairman Jerome Powell subsequently stated at a press conference that this was a risk management-type rate cut, and there was not much support from the FOMC for a 50 basis point cut. He noted that due to increased downside risks to employment, the policy balance had shifted. Therefore, he believed it was appropriate to make a decision closer to a "neutral" policy stance at this meeting.
Huatai Futures stated that while the Federal Reserve's rate cut has been implemented, Powell's remarks revealed some hawkish signals, combined with profit-taking after the announcement, which may exert some pressure on gold prices in the short term; however, the logic of the easing cycle remains unchanged, and the financial attributes of precious metals are expected to continue to be amplified. Dongwu Securities believes that although the logic of a long-term bull market in gold still exists, there may be short-term pullback risks. Major concerns include: gold is at overbought levels, which may increase volatility; the fund flows of gold ETFs have not formed a consistent trend; spot liquidity is limited; Comex speculative net long positions in gold have declined; and market sentiment in China is not sufficiently "enthusiastic."
