With the Bank of Japan's interest rate decision approaching, fluctuations in the gold and silver market have become a likely event.
On December 17, data from Jinshi News indicated that Masayoshi Amamiya, former deputy governor of the Bank of Japan and a member of the government group, stated that the Bank of Japan should avoid raising interest rates too early and excessively adjusting monetary support based on neutral interest rate levels. This statement sets a key tone for the upcoming interest rate decision by the Bank of Japan, making the market outlook for gold and silver clearer, with fluctuations likely becoming the mainstream pattern before and after the decision is made.
From the perspective of the Bank of Japan's policy guidance, if Masayoshi Amamiya's views hold significant reference value. As the former deputy governor of the central bank and a member of the government group, his statements often align closely with the policy tendencies within the central bank. This suggests that in this interest rate decision, the Bank of Japan is likely to continue its accommodative monetary policy stance, even if it takes action to raise interest rates, it will maintain a moderate posture. This policy choice will directly cause a chain reaction on the yen exchange rate and the dollar index: the yen is unlikely to gain strong support due to easing expectations, which will indirectly drive the dollar index higher, an important external factor affecting gold and silver prices.
The dollar-denominated nature of gold and silver determines the negative correlation between the dollar's movement and gold and silver prices. Theoretically, an upward movement in the dollar index will directly suppress gold and silver prices, weakening their cost-effectiveness in the international market. However, at the same time, the Bank of Japan's easing expectations also signal global liquidity easing. Coupled with the existing geopolitical uncertainties and concerns about economic recovery, the safe-haven attributes of gold and silver will be activated, becoming an important force supporting their prices. Under the dual effects of suppression and support, it is difficult for the gold and silver market to form a unidirectional trend, and the formation of a fluctuating pattern is backed by solid fundamental logic.
For investors, the core focus of this Bank of Japan interest rate decision is not whether to raise rates, but rather the guidance on future monetary policy in the policy statement. If the central bank hints at a potential gradual tightening of monetary policy in the statement, even if no aggressive rate hikes are taken this time, it will change the market's long-term expectations for the yen and the dollar, thereby breaking the oscillation balance of gold and silver; if the statement continues to emphasize the need for easing, then the support for the gold and silver market will be retained, and the oscillating trend may extend further.
From a trading perspective, before the decision is finalized, gold and silver prices are likely to maintain a range-bound volatility characteristic. Investors should avoid chasing prices and focus on the breakthroughs of key support and resistance levels. After the decision is announced, trading strategies should be adjusted in a timely manner based on the details of the policy statement, being cautious of short-term significant fluctuations in the market due to policy expectation discrepancies. Overall, the Bank of Japan's interest rate decision has become an important catalyst for the current gold and silver market, while the oscillation remains the main tone before the decision is finalized, and the subsequent trend will need to wait for further clarification of policy signals.
