The Federal Reserve announced on December 18th local time that it will lower its target range for the federal funds rate by 25 basis points to between 4.25% and 4.50%. This is the third consecutive interest rate cut by the Federal Reserve since September this year, with a cumulative rate cut of 100 basis points throughout the year.
Affected by the expectation of the Federal Reserve cutting interest rates next year, international gold prices have fallen sharply. COMEX gold futures for December delivery on the New York Mercantile Exchange plunged more than 2% after trading, trading around $2610 per ounce.
Jewelry gold price returns to the "7" prefix, netizens: ready to buy
From specific data, the latest quotes from multiple well-known gold brands reflect this downward trend.
For example, the gold price at Chow Tai Fook fell to 788 yuan per gram, while on the 18th, the gold price was 802 yuan per gram. On the 20th day of Zhou Sheng, the price is 786 yuan per gram, and on the 18th day, it is 800 yuan per gram.
Image source: Chow Tai Fook, Chow Sang Sang official website
The price of gold jewelry has returned to the "7" prefix. Among them, the gold prices of jewelry from Chow Tai Fook, Chow Sang Sang, Lao Miao Gold, Liu Fu Jewelry, and Chao Hong Ji are 788 yuan/gram, 786 yuan/gram, 790 yuan/gram, 788 yuan/gram, and 788 yuan/gram, respectively.
In addition, brands such as Chow Tai Fook, Chow Tai Sang, and King Supreme have also maintained a price of 788 yuan/gram. The gold prices of brands such as Lao Fengxiang and Millennium Star have also declined, but the decline is slightly different.
On December 19th, the topic # Gold jewelry price drops by 16 yuan per gram overnight # once topped the hot search list, sparking heated discussions.
A netizen said, "Seeing that the gold price is already calm, when will we start hoarding again at 4
Some netizens also expressed that they are ready to buy it.
How will the gold price go in the future?
Recently, the Federal Reserve cut interest rates by 25 basis points as scheduled and hinted at slowing down the pace of rate cuts. The dot plot of the Federal Reserve's interest rate forecast shows that the rate cut in 2025 will be adjusted from 4 times to 2 times. The international gold price fell sharply by more than $50 after the interest rate decision, briefly falling below the $2600/ounce mark.
According to Wu Zewei, a researcher at the Star Map Financial Research Institute, the sharp drop in gold prices on the 19th was mainly due to the significant cooling of expectations for the Federal Reserve to continue cutting interest rates. However, the gold price is still in an upward trend, and from a medium to long term perspective, there is still considerable room for increase. It is expected that the gold price adjustment will not last for a long time and will rise again after a brief adjustment.
According to a research report by CITIC Securities, the macro performance of gold in 2025 should focus on fiscal and inflation performance, while the trading side should pay attention to central bank gold purchases and geopolitical conflicts. Standing in the context of medium to long term narrative, we believe that the style of "stabilizing the fiscal" in the United States in 2025 may not necessarily drive further upward gold prices, and attention still needs to be paid to the scale of fiscal expansion.
Looking at the whole year, the gold market has not yet ended and is expected to show a high volatility trend, with the central level possibly still around $2800 per ounce. In the second quarter of 2025, due to the influence of the strong US dollar on gold prices, there may be pressure. In the second half of the year, we should focus on the mismatch between US inflation and growth pace, which will drive gold prices. In the medium and long term, driven by the US debt narrative and the trend of "de dollarization", there are still large allocation opportunities for gold in the medium and long term.
Western Pacific Bank predicts that the outstanding performance of international gold prices in 2024 may continue into 2025. The global central bank's monetary easing policy may slow down, and the rise in bond yields may have a certain adverse impact on international gold prices. However, the ongoing instability in the Middle East and the continued rise in safe haven demand may curb the downward trend of international gold prices. It is expected that the international gold price will still remain at $2700 per ounce in 2025.
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