Spot gold fell below the $4,100 per ounce threshold on June 23, with London spot gold dropping over 2% to a low of $4,090.50 per ounce, while spot silver declined nearly 5% to below $61.80 per ounce. The decline followed hawkish signals from new Federal Reserve Chair Kevin Walsh, prompting Wall Street institutions to downgrade gold price forecasts. Chinese A-share gold stocks experienced widespread limit-down moves on Tuesday, with domestic Shanghai gold futures closing down 2.04% at 897.90 yuan per gram.
Spot Gold Drops 2.16% to $4,090.50 Per Ounce on June 23
Wind data showed that on June 23, spot gold (London spot gold) fell more than 2%, breaking below the $4,100 per ounce level with a decline reaching 2.16% at its lowest point of $4,090.50 per ounce. Spot silver fell nearly 5% at one point to below $61.80 per ounce. In futures markets, COMEX gold fell 2.25% to a low of $4,108.2 per ounce, while COMEX silver dropped 5.69% to $61.85 per ounce. As of press time, spot gold prices recovered above $4,100, with the decline narrowing to 1.77%.
Chinese Gold Stocks Hit Limit-Down as Shanghai Futures Fall 2.04%
In the domestic market, as of the June 23 close, Shanghai gold futures contract 2608 closed at 897.90 yuan per gram, down 2.04%, with a year-to-date decline reaching 8.85%. On Tuesday, the A-share precious metals sector experienced heavy losses. As of market close, multiple stocks including Shandong Gold International, Zijin Mining, and Chifeng Jilong Gold Mining hit limit-down.
Bank of America Downgrades Gold Target After Fed Chair Walsh Signals
Following unexpectedly hawkish signals from new Federal Reserve Chair Kevin Walsh, major Wall Street institutions lowered their gold price forecasts. According to a CNBC report on the 22nd, Bank of America's commodities strategist team led by Michael Widmer wrote in a research note on Friday: "After the interest rate meeting, the risk of the Federal Reserve raising rates within the year has increased significantly. It will be difficult for gold to see substantial gains in the short term." Widmer stated that the current inflation situation remains concerning and will likely force further tightening of monetary policy, making Bank of America's previous target price of $6,000 per ounce for gold now appear difficult to achieve. The strategist noted that the weakening of gold prices is closely related to the rising probability of rate hikes before year-end, stating: "In other words, if monetary policy shifts from 'rate cuts in an inflationary context' to further tightening, all else being equal, gold's upside potential would be weakened by approximately 50%."
Yongying Fund Manager Cites Geopolitical Risks and Central Bank Buying Trends
Regarding the recent decline in gold prices, Liu Tingyu, fund manager of Yongying Fund's Gold Stock ETF, stated that although the U.S. and Iran have signed a memorandum of understanding electronically, Israel continues to attack Lebanon, meaning the Strait of Hormuz still faces the possibility of closure again. At the same time, Walsh's debut was interpreted by the market as a hawkish signal, with traders' expectations of Federal Reserve rate hikes warming up periodically, leading to renewed adjustments in gold and gold stocks. "However, the trend of global central bank gold purchases continues, and the logic of de-dollarization and weakening U.S. dollar credibility continues to support gold's long-term allocation value. Gold stocks are essentially profit leverage on gold prices, not a linear mapping of gold prices," Liu Tingyu said. Liu further pointed out that looking ahead, rate hike expectations and geopolitical situations may amplify volatility repeatedly, but if oil prices subsequently fall and inflationary pressures ease, monetary policy easing expectations may again support gold's financial attributes. "In the medium to long term, the logic of U.S. deficit expansion, global de-dollarization, and central bank gold purchase demand has not changed, and the cost-effectiveness of gold stocks has improved after adjustments."
FAQ
What caused spot gold to fall below $4,100 per ounce on June 23?
Spot gold fell below $4,100 per ounce on June 23 following hawkish signals from new Federal Reserve Chair Kevin Walsh, which increased market expectations for rate hikes within the year. The decline reached 2.16% at its lowest point to $4,090.50 per ounce.
How did Chinese gold stocks perform on June 23?
Chinese A-share gold stocks experienced widespread limit-down moves on June 23, with multiple stocks including Shandong Gold International, Zijin Mining, and Chifeng Jilong Gold Mining hitting limit-down. Shanghai gold futures contract 2608 closed at 897.90 yuan per gram, down 2.04%.
Why did Bank of America downgrade its gold price forecast?
Bank of America's commodities strategist team led by Michael Widmer downgraded gold forecasts after the Federal Reserve interest rate meeting, stating that the risk of rate hikes within the year has increased significantly due to persistent inflation concerns. The team noted that their previous $6,000 per ounce target now appears difficult to achieve.
