Powell's dovish stance, market bets on possible rate cuts within the year, Gold ETF Huaxia (518850) strong three consecutive days of gains

March 31, influenced by Powell’s dovish remarks, the market began to price in further cuts by the Federal Reserve again. Gold strengthened during the trading session, breaking through $4,600 in one move. The gold concept surged strongly. As of 9:50, the Huaxia Gold ETF (518850) was up 1.46%, the Huaxia Gold Stock ETF (159562) was up 1.22%, and the Huaxia Nonferrous Metals ETF (159189) was up 0.05%.

On the news front, Federal Reserve Chair Powell said on the 30th at an event at Harvard University that the Fed tends to keep interest rates unchanged and for now “ignores” the impact of energy shocks; however, he also warned that if a rise in prices over time changes the public’s inflation expectations, the Fed may not be able to continue standing by. Powell’s remarks eased market concerns about the Fed raising rates, and traders started to shift to betting that the Fed may have rate cuts within the year.

Guolian Minsheng Securities’ analysis pointed out that the situation between Iran and the U.S. has been fluctuating. Previously, the gold price reflected more liquidity pressure. As the oil price’s central level moves up and global inflation expectations rise, gold will benefit from value-preservation demand. Gold and oil may move in sync. The core contradiction in the current gold market lies in the game between safe-haven demand and the interest-rate environment. Going forward, as inflation rises and value-preservation demand is expected to boost gold prices, the medium-to-long term outlook for gold remains favorable. The main storyline remains central banks buying gold + weakening confidence in the U.S. dollar, with a favorable view that the gold price’s mid-range will move higher.

(Editor: Dong Pingping)

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