In the early morning of Thursday, Beijing time, the Federal Reserve held its last interest rate meeting at the end of this year. As in the past, the results of the meeting itself have been fully expected by the market. What is important is the dot plot after the meeting and the expectation of next year's interest rate path revealed by the Federal Reserve Chairman's speech, which is the core that affects market prices.
After last week's meeting, gold prices in the stock market plummeted.It shows that the market has lowered its expectation of the number of interest rate cuts next year. I'm afraid this expectation will not change until the new president takes office and the next interest rate meeting, so I hope everyone will remain cautious about the market.
Does it have any impact on the US stock index?
Looking at the Federal Reserve meetings at the end of the past few years, market expectations tend to go to extremes, either extremely optimistic or extremely pessimistic. Just like at the end of 2023, the market generally expects the Federal Reserve to cut interest rates in 2024, with 6 interest rate cuts a year. Interest rates will be adjusted at almost every meeting. As a result, what you see is that the Federal Reserve has delayed its first interest rate cut until September. Almost no one can completely guess (relatively big A, hey... the gap is far away).
Then for the US stock index, it means that this negative sentiment is relatively short-lived. After all, it is normal for the index to rise all the way and undergo short-term adjustments. The adjustment range should not be too large. The layout also depends on the policy orientation after Trump takes office next year.
Technically, the U.S. stock index has fallen below the 20-day moving average, so the short-term definitely needs to be repaired before it can continue to be bullish. I don't think the magnitude of short selling is large, so I suggest you hold more positions and wait and see.
Has gold peaked?
At present, the price of gold is still very strong. The slowdown in the rate of interest rate cuts by the Federal Reserve has a relatively large impact on precious metals.
However, the slowdown in the rate of interest rate cuts does not mean that interest rates will not be cut. Therefore, after the short-term negative sentiment is released, there are still strong bargain-hunting funds entering the market. intervene. The real big negative of gold prices lies in the actual changes in geopolitics after Trump took office in January, such as whether Russia and Ukraine can negotiate peace?
Will the situation in the Israel-centered Middle East calm down? These events are all catalytic events for the recent upward fluctuation of gold prices. If they are all resolved peacefully, the premium on gold prices will definitely be greatly squeezed, resulting in a certain degree of decline. Therefore, whether the price of gold peaks or not depends not on the Federal Reserve, but on how the geopolitical situation evolves.
Technically, the watershed of gold's trend lies in the 20-week moving average, which once fell below last week, but rebounded back to the vicinity of this line on Friday. Therefore, this week is an important time point for the gold price to go out. If it goes down, the stage high will appear, and it will take a period of adjustment before it can reach a new high. Of course, if you hold on here and rise again, then it is still worth looking forward to a short-term rise to new highs.
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