Is gold going to fall?

Let's talk about the upcoming macro environment of the Federal Reserve.

The Federal Reserve's dot plot leans dovish, indicating two rate cuts in 2026, one rate cut in 2027, and no change in rates in 2028. This means that the widespread liquidity that everyone expected is no longer viable, and CZ's assertion about $BTC benefiting from the Federal Reserve's large-scale liquidity injection is also no longer valid.

We see that the Federal Reserve has purchased $40 billion in government bonds, which many people believe is an expansion of the balance sheet.

However, this $40 billion belongs to RMP, and its purpose is not to stimulate the economy or actively inject liquidity, but rather to maintain the safety threshold of the minimum reserves in the banking system. This is to prevent the banking system from being stripped too much by factors such as funds allocation from the Treasury, tax payments, and year-end settlements.

QE = actively expanding the balance sheet, with the goal of lowering long-term interest rates and increasing system liquidity. This is commonly referred to as liquidity injection.

QT = actively shrinking the balance sheet, with the goal of draining liquidity and tightening financial conditions.

RMP = completely different from QE, it is about maintaining water levels and avoiding systemic water shortages.

The essence of RMP is that the Federal Reserve replenishes the water that has been lost, not adding more water to the pool.

So this is not an expansion of the balance sheet; the Federal Reserve has clearly stated in its announcement two points: RMP will maintain a relatively high pace before April 2026 (as the Treasury will significantly increase non-reserve liabilities in April), but after April, with the seasonal factors disappearing, the purchase scale will quickly decline.

What truly determines liquidity is not RMP, but whether SLR is relaxed, whether banks can expand their balance sheets, whether the Treasury continues to replenish reserves, and whether the Federal Reserve will reduce the scale of ON RRP.

Next, we need to continue to pay attention to the non-farm data on December 16 (November) and the CPI data on December 18 (November). Non-farm payrolls are likely to be bad because November is during the later stages of the U.S. government shutdown, which significantly impacts the economy. Pay special attention to the CPI in November; if it does not rebound after the rate cuts in September and October, it will reduce obstacles to further easing by the Federal Reserve.

In summary, the current macro environment is not optimistic, and at least the widespread liquidity injection by the Federal Reserve in 2026 that everyone hopes for is not seen as a possibility for now.
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