On June 12th, Eastern Time, the spot international gold price closed up by 0.34%, reporting at $2,324.73 per ounce.

In a report on June 13th, China Gold stated that gold still has phased opportunities before the Federal Reserve's rate cut, with its price center at $2,500 per ounce.

After the cooling of U.S. inflation, the gold and silver prices that had fallen once again started to rise.

On June 12th, Eastern Time, the spot international gold price closed up by 0.34%, reporting at $2,324.73 per ounce.

Following the release of the latest U.S. Consumer Price Index (CPI) data, the spot international gold price pulled up from below $2,315 per ounce and then rose to the highest intraday level.

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However, after the Federal Reserve issued its resolution statement, its price fell back from the line of $2,335 per ounce, and the increase narrowed.

As of the close of the day, the COMEX gold futures price also closed up by 0.61%, reporting at $2,340.70 per ounce.

Affected by the rise in gold prices and other factors, the price of silver also continued to rise.

On June 12th, Eastern Time, the COMEX silver futures price closed up by 1.97%, reporting at $29.808 per ounce.

However, the rebound of the spot silver price on that day failed to regain the $30 per ounce threshold.

In the Chinese market, the prices of jewelry gold and gold bars also continued to rise.

On June 13th, Beijing Time, the physical gold prices of brands such as Chow Tai Fook, Lao Feng Xiang, and Zhou Liu Fu rose by 0.14% during the day, with prices ranging from 712 yuan/gram to 713 yuan/gram.

Data from the Shanghai Gold Exchange showed that as of the close on June 13th, the Au99.99 gold contract closed at 545.97 yuan/gram.

Prior to this, gold and silver prices had fallen for several weeks.

At the end of May, the gold price adjusted, with COMEX gold futures falling from a historical high of $2,430 per ounce, with the maximum drawdown approaching 5%.

On June 7th, the COMEX gold futures price fell from $2,370 per ounce to nearly $2,300.

In the following days, its price hovered around $2,300 per ounce until after the close on June 12th, Eastern Time, when its price rose back above $2,324 per ounce.

Behind this, the U.S. CPI data is the key to igniting the momentum of the metal market.

In May, the U.S. core CPI excluding food and energy rose by 0.2% month-on-month, and by 3.4% year-on-year, the lowest since 2021.

To some extent, this has convinced people that U.S. inflation has returned to the Federal Reserve's 2% target.

In the view of some market analysts, gold may show signs of warming up in the future.

China Gold stated in a report on June 13th that before the Federal Reserve's rate cut, gold still has phased opportunities, with its price center at $2,500 per ounce.

Huatai Securities also stated in a report on the same day, looking forward to the market, the logic of gold's medium and long-term rise has not been reversed, and it still recommends strategic allocation when the price is low.

The increase in global market volatility due to multiple factors such as geopolitical factors in the election year, overseas interest rate reduction cycle, and domestic policy game, is all conducive to the rise in gold prices.

"Slowing inflation is better than the Federal Reserve's hawkish resolution," said Jerry Chen, a senior analyst at Jia Shen Group.

"Although the Federal Reserve also made a hawkish statement on June 12th, it seems that this has not reversed the optimistic sentiment triggered by the inflation data."

Gold has multiple attributes such as consumption, investment, and risk aversion.

This means that gold can be a consumer good, an investment, or a kind of currency.

An article in the Chicago Mercantile Exchange stated that gold is a de facto currency, and almost every major central bank has a large reserve of gold.

However, gold is a non-interest-bearing currency, so when the expectation of interest rate cuts forms, the price of gold tends to rise.

Inflation and employment are the dual goals of the Federal Reserve's monetary policy.

When inflation pressure is relatively low and employment pressure is relatively high, the Federal Reserve tends to cut interest rates.

Behind this, the inflation and employment data released monthly provide guidance for the Federal Reserve's monetary policy.

On June 12th, local time, the U.S. inflation data released such a signal.

In May, the U.S. CPI was flat month-on-month, mainly due to the decline in gasoline prices.

The core CPI rose by 0.16% month-on-month, the smallest increase since August 2021.

Among them, the car insurance prices that had increased significantly in the past few months fell by 0.1% month-on-month.

The month-on-month growth rate of other CPI items such as air tickets, new cars, and clothing also declined.

Federal Reserve Chairman Powell said that although the above data is not enough to support rate cuts, officials welcome the latest data and hope to see more such reports in the future.

After the interest rate meeting, the Federal Open Market Committee (FOMC) slightly adjusted its wording in the statement, stating that inflation has made "moderate further progress" in recent months towards the committee's 2% inflation target.

The previous statement said "lacked" further progress.

Behind this, the market bets that the Federal Reserve may open up room for rate cuts.

UBS stated that in 2024, the Federal Reserve will cut interest rates twice, with the first time in September.

Powell said that the current monetary policy is restrictive, indicating that if the current high interest rates continue for too long, it may lead to a slowdown in economic growth.

This coincides with the views of most investment banks.

On June 12th, Goldman Sachs released a report stating that it expects the Federal Reserve to cut interest rates twice in September and December.

The conditions required for this are that the next three inflation data will be in a similar downward range.

The bank expects that in the fourth quarter of 2024, the U.S. personal consumption expenditure (PCE) will be 2.7%, slightly lower than the FOMC's forecast of 2.8%.

Shi Cheng, a precious metals and non-ferrous researcher at Huatai Futures, believes that the moderate decline in U.S. inflation indicates that the Federal Reserve has more conditions to accelerate the interest rate reduction process.

In addition, the current nominal interest rates in the United States are likely to have peaked, which also means that the future U.S. interest rate level will gradually decline.

Compared to gold, silver is both an investment asset and an industrial metal used in electronic products and solar panels.

Michael Di Rienzo, President and CEO of the Silver Institute, said that there is still room for the price of gold to rise, and the price of silver will also rise accordingly.

In addition, the green energy transition will also drive the demand for silver.

A study by the Silver Institute, an industry organization, stated that due to the expected increase in industrial demand, the silver market has entered the fourth year of structural market deficit.

In the first four months of this year, India's silver imports have exceeded the entire year of 2023.

Shi Cheng also said that the photovoltaic sector has a huge demand for silver, with an expected demand of more than 4,500 tons in 2024.

In the past few months, one of the major drivers supporting the rise in gold prices has changed.

Taking the People's Bank of China (hereinafter referred to as "the central bank") as an example, in the second quarter, its gold purchase speed slowed down, with a net purchase of 60,000 ounces of gold in April, and no net purchase in May.

This means that the central bank's gold reserves have ended the "18 consecutive increases".

According to data from the World Gold Council, compared with March, the global central bank's gold purchase volume in April decreased from 39 tons to 36 tons.

However, in April, the global central bank's net gold purchase volume rebounded to 33 tons.

In the first quarter of 2024, the global central bank's net gold purchase volume reached 290 tons, the highest quarterly central bank gold demand since the statistics began.

In Shi Cheng's view, the central bank's cessation of gold purchases is mainly due to the high price of gold, and appropriately adjusting the pace of gold purchases helps to control costs.

After the price adjustment, it is expected that the central bank will continue to increase the pace of gold purchases.

In the fourth quarter of 2019, the central bank also had a similar situation of suspending gold purchases.

At that time, the gold price had risen sharply for several months, and the year-on-year increase by the end of September was as high as 26.1%.

However, after the gold price turned to fluctuate and weaken, the central bank resumed the purchase of gold.

In the view of Wang Lixin, CEO of the World Gold Council's China region, the change in gold prices will have a certain technical impact on the central bank's gold reserves.

However, the pace of the central bank's gold reserves is not entirely affected by short-term price fluctuations, and there are also strategic choices.

He said that the central bank's foreign exchange reserves have three levels of consideration: safety, liquidity, and return.

"Among these three, the importance cannot be adjusted.

Safety is the first, liquidity is the second, and the third is the return rate, and the central bank does not look at short-term returns, but at medium and long-term returns."

He said.

Wang Lixin said that in the past ten years, the central bank's foreign exchange reserves have been undergoing a diversified transformation, and the newly added assets must be different from those held in the past, and can play a special role.

It must be able to prevent risks, have good safety, and have a large enough market capacity.

Among them, gold has become a better option.

According to Huatai Securities' calculations, as of February, the total scale of global reserve assets was $15.3 trillion, of which gold was $2.3 trillion, accounting for 15% of the market price.

In 2008, the proportion was about 10%.

Looking forward to the market, Amar Singh, head of the Asia-Pacific and Middle East Metals Department of StoneX Market Research Institute, said that the physical demand for gold is strong, and in 2024, the gold price can easily reach $2,600-$2,700 per ounce.

UBS believes that the gold price correction may be a prelude to a stronger rebound, and its correction is unlikely to scare investors.

It is expected that any further correction will be seen as an opportunity to establish positions.

The reason behind this is that, first, the Federal Reserve will still be in the interest rate reduction channel, although the timing and magnitude of the rate cut are uncertain; second, the continuous purchases by central banks and the stable demand in key physical markets provide support for gold prices; and third, gold is still a powerful asset to hedge against macroeconomic uncertainty and geopolitical risks.

Shi Cheng also said that the market believes that the possibility of the U.S. nominal interest rate peaking is relatively large, which means that the Federal Reserve is still in the interest rate reduction channel.

In this context, precious metals still have configuration value, and in June, they may temporarily fall into a volatile pattern.The latest dot plot indicates that while Federal Reserve policymakers have stated that they currently anticipate only one interest rate cut this year, with the March forecast predicting three cuts, they now expect four rate cuts by 2025, more than the previously anticipated three.

However, Federal Reserve officials have differing views on the best path for rate cuts.

The Fed's dot plot shows that four decision-makers expect no rate cuts this year, seven expect one cut, and eight expect two cuts.

Regarding the demand for gold purchases by global central banks, Wang Lixin believes that, judging from the first-quarter data, 2024 should still be a year when central banks increase their gold reserves, but there are still challenges in catching up to the levels of the past two years.

In addition, 2024 is also known as a global election year, which to some extent increases the geopolitical risks in the world.

When risks intensify, the prices of assets such as gold tend to rise.

On the evening of June 9th local time, the European Parliament elections concluded voting.

Preliminary vote counts showed an increase in seats for right-wing and far-right forces, with ruling parties in some major European countries like France and Germany performing worse than far-right parties.

This indicates a shift to the right in the European political spectrum, with far-right parties tending to advocate for their countries to "Brexit," which is not conducive to political stability in the region.

On June 10th, European stocks, bonds, and currencies suffered losses, with the French stock market plunging and the euro falling to its lowest against the US dollar in a month.

Additional political uncertainty lies in the United States.

In 2024, the US will hold another round of presidential elections.

By the end of May, the US presidential primaries were nearing their end.

A public opinion poll result released at the end of May showed that the approval rating of the presumptive Democratic presidential candidate Biden fell to its lowest level in nearly two years.

Furthermore, according to several nationwide US election polls, Biden's approval rating is nearly on par with that of the presumptive Republican presidential candidate Trump, but in several key "battleground states" that could determine the outcome of the presidential election, Trump maintains a slight lead.