Rate Of Return
GDXU Return RateThe Fed's interest rate cut storm is coming, where will gold and silver go?
The Impact Mechanism of Federal Reserve Interest Rate Policies on Gold and Silver Prices
I. Historical Reference: The High Inflation Period of the 1970s-80s
Drivers of Inflation
The baby boom population dividend triggered a surge in demand, leading to a "wage-price" spiral (inflation rate exceeding 20%).
The Middle East oil crisis exacerbated the dilemma of coexisting inflation and recession.
Policy Responses and Market Reactions
Paul Volcker implemented aggressive interest rate hikes (reaching 20%) to successfully curb inflation, ending the gold price surge.
Gold performed best under the combination of "high inflation + loose policies" (nominal interest rates ↓ + inflation ↑ = accelerated decline in real interest rates).
II. Current Market Environment Characteristics
Dual Possibility Background
Scenario 1: Preemptive rate cuts under controlled inflation (similar to 2020-2022).
Scenario 2: Forced rate cuts under deflationary pressures (similar to 2011-2016).
Key Observation Indicators
The direction of real interest rate changes is the core determining factor.
The "forward guidance" in the Federal Reserve's policy statements is more important than specific rate adjustments.
III. Risk Warnings and Historical Lessons
Typical Scenarios for Gold Price Declines
Zero interest rate policy period (post-2008).
Prolonged deflationary environment (lasting 9 years from 2011-2016).
Recent Focus Points
Signals on the interest rate path released by the Federal Reserve's policy meetings (especially the 28th meeting).
Powell's stance on the "inflation-recession" balance will directly impact market expectations.
Core Logic Chain: The trend of real interest rates (nominal interest rates - inflation rate) determines the direction of gold and silver prices. Federal Reserve policies influence real interest rates by altering rate expectations. Currently, we must be wary of historical repetition risks—either replicating the 1970s surge or reliving the prolonged decline of the 2010s.
$Gold(IN00380.US) $Silver(IN00270.US)
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