The Hidden Capital Games During the Federal Reserve's Rate Cut Cycle
I suddenly realized that this ongoing capital game, lasting thirty years, has never changed its script. While everywhere on the streets people are proclaiming that gold must rise during a rate cut cycle, historical data tears apart the bloody truth: in the past thirty years, during six rate cut cycles, five were accompanied by a cliff-like crash in the gold market, with an average decline of over 18%. This is the carefully designed harvesting script of Wall Street.
The snowflakes that fell on the top hat of Federal Reserve officials on Christmas Eve 24 years ago have yet to melt, and the market has already caught the scent of a rate cut in June 2025. The inflow of funds into gold ETFs surged sharply, and the gold price raced from $2600 to the $3000 mark.
The most exquisite aspect of this capital game is that it always makes retail investors play the role of the last baton bearer, but the paradox of the capital market lies in this. When China's tough counter-tariffs trigger a global chain reaction, and the U.S. has to rein in its unilateralism, gold unexpectedly staged a comeback after the bad news was exhausted, setting a new historical high.
The reality that the U.S. holds the largest gold reserves in the world has long turned gold into a puppet of monetary policy. When even the aunties at the local market are discussing gold investments, remember to check your wallet; that may be the last calm before the storm.
Market conditions change every day. If you always feel like you are a step behind, feel free to come and chat.
