Core Viewpoint - The continuous interest rate hikes by the Federal Reserve and the strong rise of the US dollar index have put significant pressure on international gold prices, which have fallen from a peak of $2078.8 per ounce in March to a low of $1618.3 per ounce last month. However, contrary to previous trends, domestic gold stores in China are experiencing poor sales despite the drop in gold prices [1][3]. Group 1: Reasons for Poor Domestic Gold Sales - The decline in international gold prices has not translated into significant price drops in domestic gold stores due to the limited decrease in domestic gold prices, which are affected by the depreciation of the Chinese yuan against the US dollar [3][5]. - The majority of gold sold in domestic stores consists of jewelry, which includes high processing and design fees that do not adjust with international gold price fluctuations, resulting in minimal price reductions for consumers [3][5]. - Domestic demand for gold has decreased significantly due to the ongoing economic downturn and the impact of repeated COVID-19 outbreaks, leading consumers to cut back on non-essential spending, including gold jewelry [5][7]. Group 2: Changing Consumer Preferences - The younger generation shows a declining interest in gold jewelry, viewing it as outdated and preferring luxury items like designer bags and high-performance cars to express their personal style and economic status [7][9]. - Consumers are becoming increasingly savvy regarding the resale of gold, often facing unfavorable buyback prices compared to their purchase prices, which diminishes their willingness to invest in gold [9].

Group 1 - The core reason for the rise in the US dollar index is attributed to the Federal Reserve's hawkish stance, with market expectations for a December rate cut dropping from 95% to 67% after Powell's comments, leading to a surge in the 10-year Treasury yield from 3.8% to 4.11% [1] - The ongoing "cash crunch" in the US money market, exacerbated by the government shutdown, has led to a significant increase in secured overnight financing rates (SOFR), which rose by 18 basis points, the largest single-day increase since March 2020, enhancing the attractiveness of the dollar [1] - Weakness in non-US currencies, particularly the Japanese yen and British pound, along with a decline in the euro, has contributed to the strengthening of the dollar index [1] Group 2 - The rise in the US dollar index has limited the upward movement of gold prices, resulting in a continued correction in the gold market [2] - The Shanghai gold price has decreased by 0.77%, closing at 912.26 yuan per gram [4] Group 3 - The US economy and job market are facing challenges from the government shutdown and trade tensions, while the Federal Reserve's hawkish signals have increased short-term policy uncertainty [6] - Geopolitical risks and financial institution failures are prompting more central banks to increase gold holdings, suggesting a potential long-term bullish trend for precious metals similar to the 1970s [6] - Short-term fluctuations in international gold prices are expected, with a potential buying opportunity if prices drop below $3,900 (900 yuan), while the market is likely to experience a consolidation phase [6]

Fundamental Analysis - Gold prices are currently hovering around $3,948 after a decline of 1.7% on November 4, closing at $3,931.78 per ounce, while December U.S. futures fell 1.3% to $3,960.50 [1][3] - The divergence among Federal Reserve officials has increased, cooling market expectations for a rate cut in December, which has helped the U.S. dollar index surpass the 100 mark, reaching a three-month high [1][3] - The ongoing U.S. government shutdown, now in its 35th day, raises concerns about economic data availability, providing some support for gold prices as a safe haven [1][4] Technical Analysis - The gold price recorded a bearish candle on the previous day, indicating pressure on recent rebounds, with a key support level around $3,920 [6] - Short-term trading is currently within a range of $3,920 to $4,030, with recent attempts to break above $4,030 failing, leading to further weakness [6] Trading Strategy - A trading strategy is suggested within the $3,925 to $4,025 range, with a stop loss of $10 and a target profit of $30 to $50 [7]

Group 1 - Gold prices experienced a significant drop, trading around $3990 per ounce, with a decline of approximately 0.25% due to a strong US dollar at a three-month high [1] - The Federal Reserve's internal division was highlighted by a rare 10-2 vote, indicating significant disagreement among policymakers regarding future interest rate cuts [1][3] - The market's expectation for a December rate cut dropped sharply from nearly 100% to 65.3% following comments from Fed Chair Powell, who emphasized the need for caution in further easing [1][3] Group 2 - Dovish representative Milan reiterated the need for substantial rate cuts, suggesting a gradual reduction of 50 basis points until rates fall below the neutral level, citing pressures in housing and private credit markets [3] - Hawkish voices, including Chicago Fed's Goolsbee, expressed concerns over persistent inflation above target levels, indicating potential upward pressure on inflation in the coming years [3] - The ongoing government shutdown has led to a data vacuum, increasing uncertainty in the market, with key labor statistics and non-farm payroll reports on hold, complicating the Fed's policy decisions [4]

Core Viewpoint - The US dollar index is experiencing a moderate increase due to reduced bets on further interest rate cuts by the Federal Reserve, supported by hawkish comments from Fed officials [1][2]. Group 1: Federal Reserve Actions - The Federal Reserve decided to lower interest rates by 25 basis points, aligning with expectations, but Chairman Jerome Powell indicated this might be the last cut of the year without stronger economic conditions [1]. - Dallas Fed President Lorie Logan and Cleveland Fed President Beth Hammack expressed intentions to keep rates unchanged rather than further lowering the federal funds target rate range to 3.75-4.0% [1]. - Kansas City Fed President Jeff Schmied noted his preference against rate cuts due to concerns over high inflation rather than the labor market [1]. Group 2: Market Reactions - The dollar index rose to approximately 99.75 during Asian trading, reflecting a strong performance against a basket of six major currencies [1]. - Traders have reduced expectations for a December rate cut, with current pricing indicating about a 68% probability, down from 93% a week prior [1]. - The dollar index continued its upward trend, increasing by about 0.10% and reaching a near five-month high of 99.84 in the previous trading session [2].

Core Viewpoint - The ICE Dollar Index increased by 0.27% to 99.791 points at the end of trading on Friday, October 31, with a cumulative rise of 2.06% for the month of October [1] Group 1 - The ICE Dollar Index reflects a strengthening of the US dollar against a basket of currencies [1] - The increase in the index indicates positive market sentiment towards the US dollar in October [1] - The monthly rise of 2.06% suggests a trend of appreciation for the dollar during this period [1]

Core Viewpoint - The recent sharp decline in London spot gold prices, which fell from a historical high of approximately $4381 to a low of $3888, is attributed to various macroeconomic factors and market sentiments regarding central bank gold purchases and geopolitical stability [1][2]. Group 1: Market Dynamics - The easing trade tensions have negatively impacted the outlook for continued gold price increases [1]. - Concerns regarding whether central banks will continue to purchase gold at such high prices have emerged [1]. - The stabilization of the Russia-Ukraine conflict is seen as a potential reason for future downward pressure on gold prices [1]. Group 2: Economic Indicators - Increased expectations for the Federal Reserve to continue interest rate cuts may lead to a mid-term rebound in the US dollar index, indirectly causing a sell-off in gold positions [1]. - The dollar index is anticipated to experience a "flashback" rise around the time of the US mid-term elections next year, influenced by the strength of the US economy and global economic cooperation [1]. Group 3: Future Projections - If gold prices retrace to the $3700-$3800 range, there is a high probability of a rebound towards the $4000 mark, with potential fluctuations until the end of the dollar's upward cycle [1]. - Post-2025, the traditional inverse relationship between the dollar and gold may weaken, particularly if the offshore RMB to USD exchange rate surpasses the 7:1 threshold, potentially triggering a rebound in the dollar index and causing stagnation in gold prices [2].

Core Viewpoint - The Bloomberg Dollar Spot Index continues its upward trend, achieving the largest increase in two weeks [1] Group 1 - The index reflects a strong performance in the dollar, indicating potential shifts in currency markets [1] - The recent gains may influence investor sentiment and trading strategies in the foreign exchange market [1]

Core Viewpoint - As of the end of July, China's foreign exchange reserves decreased to $32,922 billion, a decline of $2.52 billion or 0.76% from the end of June, primarily due to the appreciation of the US dollar and fluctuations in asset prices [1][2] Foreign Exchange Reserves - The decline in foreign exchange reserves is attributed to the rise in the US dollar index, which reached 100 points in July, influenced by expectations of high inflation and strong economic data, leading to a depreciation of non-USD currencies such as the Japanese yen, euro, and British pound by 4.5%, 3.2%, and 3.8% respectively [1][2] - The valuation of foreign exchange reserves in USD means that the depreciation of non-USD assets contributed significantly to the decrease in reserves [1] Asset Price Changes - The postponement of interest rate cuts by the Federal Reserve led to a slight decline of 0.1% in the USD-hedged global bond index, negatively impacting foreign exchange reserves, while US stock indices reached new highs, providing some support [2] Future Outlook - The National Foreign Exchange Administration expects that China's foreign exchange reserves will remain stable due to the strong economic fundamentals and resilience of the Chinese economy [3] - The current level of foreign exchange reserves is considered adequate, providing support for maintaining the RMB exchange rate at a reasonable equilibrium and acting as a buffer against potential external shocks [3] Gold Reserves - China continues to increase its gold reserves, which reached 73.96 million ounces by the end of July, marking a month-on-month increase of 6,000 ounces, representing the ninth consecutive month of gold accumulation [1][4] - The value of China's gold reserves is approximately $244 billion, accounting for 7.41% of the total foreign exchange reserves, which is the highest proportion in three months [4] - The People's Bank of China is maintaining a steady pace of gold accumulation to optimize reserve structure and manage liquidity while mitigating geopolitical risks and market volatility [4][5]

Core Insights - The price of gold jewelry has dropped below 1000 yuan per gram, leading to increased consumer interest and foot traffic in jewelry stores [1][3] - Major brands like Chow Tai Fook and Lao Feng Xiang have seen their gold prices fall to around 998 yuan per gram, with smaller brands offering even lower prices [3] - The decline in gold prices is attributed to a strong US dollar and decreasing geopolitical risks, which have reduced the demand for gold as a safe-haven asset [3] Industry Trends - The recent drop in gold prices presents a buying opportunity for consumers looking to purchase gold jewelry [4] - Consumers are advised to choose reputable stores and verify the purity and quality of gold before making purchases [4] - Despite the current price drop, gold remains a significant asset for consumers, valued both for its aesthetic appeal and as a means of wealth preservation [4]