🇺🇸December US interest rate cut + 🇯🇵Japan interest rate hike double impact
Is gold standing at the starting point of a new trend?
The focus of the financial market in December is undoubtedly: US interest rate cut, Japan interest rate hike. These two seemingly independent events are actually shaping the next important trend in gold together.
Firstly, the official start of the US interest rate cut cycle means the end of the dollar's strong cycle, with real interest rates declining significantly lowering the cost of holding gold, which benefits gold naturally. Historically, every interest rate cut cycle has brought about a mid-term rise in gold, with investors switching their risk preferences and liquidity becoming abundant again, which is the biggest support for gold prices.
On the other hand, although the Japanese central bank's interest rate hike is small in magnitude, its symbolic significance is very strong — major global central banks are shifting from tightening to policy rebalancing. The rise in Japanese bond yields will attract some capital from the dollar to the yen, putting pressure on the dollar index and dispersing liquidity, which also positively impacts gold. At the same time, the repatriation of Japanese funds and the unlocking of carry trades will increase the demand for global safe-haven assets, making gold the natural first choice.
When the US interest rate cut + Japan interest rate hike occur simultaneously, the market will face a common result:
👉 Global liquidity warming + Dollar weakening → Precious metals welcome trend-level support
Short-term volatility will still exist, but in terms of mid-term structure, the bullish foundation for gold is more solid than at any time in the past. If the market experiences a pullback next, it looks more like an opportunity to position for the next trend rather than a risk point.
The end-of-year market is often a period for funds to position in advance, and gold is in a window where fundamentals, policies, and macro expectations are completely resonating. Those who are steady will choose to focus on the trend amidst the noise, rather than every shake of the K-line.
