In the early morning of Tuesday, Beijing time, traders increased their bets on gold and commodities as the international economy and geopolitical environment are in a state that is conducive to promoting the Fed’s interest rate cut.
As of press time, London spot gold rose nearly $40 in the day, reaching $3,680/ounce for the first time in history ; COMEX gold also rose nearly 1%, setting a record high of $3,720/ounce .
Commodities have also generally risen, among which London copper also broke through US$10,190/ton, not only surpassing the previous high in March this year, but also a new high since June last year .
Overall, traders are preparing for the Fed’s rate cut this week — not only to welcome the first rate cut in 2025, but also betting on a series of interest rate cuts that will occur in several subsequent meetings.
Swap transactions have been priced. The Fed will cut interest rates once this year, and there is a high possibility that there will be a third rate cut . This expectation pushes up U.S. stocks, lowers U.S. Treasury yieldsThe key point of this week’s “gambling” is whether the Federal Reserve will challenge the current market consensus.
Since the beginning of this year, gold has risen by more than 40% due to geopolitical turmoil, Trump’s trade policy, and continuous buying from central banks in various countries, and has recently broken through the inflation-adjusted historical value high. In addition, the Federal Reserve is also under pressure from Trump to cut interest rates, including attempting to remove Director Lisa Cook .
Gold that does not rebate is generally regarded as a safe-haven asset in uncertain times and often performs well in low-interest rate environments. Goldman Sachs previously analyzed that if 1% of the US Treasury bonds held by the private sector flow into gold, the price of gold may be pushed up to $5,000 per ounce.
According to the latest news, on Monday night local time in the United States (early Tuesday morning Beijing time), the U.S. Senate will vote on Trump’s nomination of economic adviser Milan to work part-time in the Federal Reserve Board. If approved, he will attend the Fed Open Market Committee meeting that began on Tuesday and convey the “White House voice” on the “dash chart” – undoubtedly a curve of a sharp interest rate cut.
