Review and key perspectives on the gold market:
Last week, the gold market experienced a bottoming-out and recovery amidst significant swings in macroeconomic expectations. The London spot gold price closed at $4,158 per ounce (a weekly decline of 1.4%), while the domestic AU9999 gold closed at 936 yuan per gram (a weekly increase of 2.9%).
FOMC CORP.'s June meeting: The "debut" of Chairman Warsh released a hawkish signal, with the dot plot reversing expectations for a rate cut within the year. In the early hours of June 18, Beijing time, the newly appointed Federal Reserve Chairman, Kevin Warsh, presided over his first FOMC meeting. The committee unanimously voted to keep the federal funds rate unchanged within the range of 3.50%-3.75%, aligning with market expectations. However, the meeting conveyed a distinctly hawkish signal, with the core change stemming from the dot plot. The median projection for the federal funds rate at the end of 2026 was significantly revised upward from 3.4% in March to 3.8%, implying one 25-basis-point rate hike within the year. Specifically, nine members projected at least one rate hike in 2026, while nine anticipated keeping rates unchanged or implementing cuts. In contrast, no officials had projected a rate hike within the year back in March. CME interest rate futures indicate a probability exceeding 80% for a rate hike this year.
Summary of Economic Projections (SEP): Inflation expectations were substantially revised upward. The median projection for PCE inflation at the end of 2026 was sharply raised from 2.7% to 3.6%, while core PCE was adjusted from 2.7% to 3.3%. GDP growth and unemployment rate projections were slightly revised downward, with the long-term neutral rate remaining unchanged at 3.1%. This suggests that FOMC members believe the current interest rate level of 3.50%-3.75% remains above the long-term neutral rate, and that any rate hike would be more of a "preventive" short-term measure rather than a shift in long-term policy direction. This assessment also explains the significant rise in the 2-year U.S. Treasury yield, while the increase in the 10-year long-term yield was relatively limited. Regarding the communication framework, the statement was condensed to its shortest length since 2007, with all forward guidance removed, no longer hinting at future interest rate directions. Chairman Warsh also announced the establishment of five working groups focused on policy communication and framework research, and he himself did not submit a dot plot projection.
Overall, gold currently faces a tug-of-war between the "increased rate hike expectations driven by a hawkish dot plot" and the "geopolitical uncertainties combined with central bank gold purchases." In the short term, the gold price is highly likely to maintain a volatile pattern, with attention on the $4,000 support level. From a medium- to long-term perspective, the structural factors supporting gold—global central bank gold purchases, reserve structure rebalancing, and U.S. fiscal pressure—remain unchanged despite short-term fluctuations.
Key signals for gold investors to monitor in the coming week: (1) U.S. PCE inflation data; (2) Follow-up developments in U.S.-Iran negotiations in Switzerland; (3) The final reading of U.S. Q1 real GDP.
Related Products:
Gold ETF Huaan (518880) / Link A (000216) / Link C (000217)
Gold Equity ETF Huaan (159321)
Comparison of RMB-denominated gold price performance versus international gold price:
Data source: Wind, Huaan Fund, as of 2026/6/18
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