12.11 Clock Spirit Evening Golden Silk Dew Sharing Trend
The Federal Reserve announced its third rate cut of the year by 25 basis points, bringing the benchmark interest rate down to 3.50%-3.75%, in line with market expectations. However, there were significant internal voting differences: out of 9 votes in favor, 3 were against, including one member advocating for a 50 basis point cut, while two others believed rates should be maintained, marking the first time since 2019 that there were three dissenting votes.
The policy statement removed the wording 'low unemployment rate' and acknowledged a slowdown in job growth. The dot plot suggests a possible further cut of 25 basis points in 2026. To supplement liquidity, the Federal Reserve will make large purchases of Treasury bills, but emphasized that this is not quantitative easing. Following the decision, U.S. stocks rose, and the dollar weakened.
Meanwhile, Trump publicly criticized the small rate cut, while Federal Reserve Chairman Powell responded that future policies need to observe data, attributing part of the inflation pressure to tariff policies. Currently, inflation remains above the 2% target, and the labor market shows signs of weakness. The Federal Reserve faces a difficult balance between controlling inflation and stabilizing the economy.
Alright, back to the point, gold was under pressure and fell back during the day, failing to continue its previous upward momentum. Although there is support around the short-term level of 4200, the market lacks sufficient momentum to push prices further up. As the gains from earlier rate cut expectations are gradually digested, gold prices may re-enter a weak fluctuation pattern.
In the afternoon, the market only rebounded to around 4226. Evening operations can focus on the range of 4220-4225, considering a light short position in this area, with the primary target looking at the key support level of 4200 below; if it effectively breaks down, it can look towards around 4190. Overall, it is currently not advisable to be overly bearish, and the market is expected to maintain a fluctuating trend as the main tone.
