● Fed Pivot Ignites Dollar Surge, Bond Market Panic

October FOMC: Consecutive Rate Cuts · End of QT, December Uncertain — Immediate Commentary and Market Impact

This article includes a 5-line key summary of the October FOMC, the transmission mechanism of rate and QT decisions, the reaction of short- and long-term rates and the dollar index, a possible scenario for a rate cut in December, and a checklist for the Korean market.
In particular, we have separately summarized points that are rarely addressed in other content, such as the intention behind the shift to short-term Treasury reinvestment, bank reserve paths, Treasury supply-demand mismatch, and expected inflation anchoring risk.
The content is structured like news using key SEO terms such as FOMC, the Fed, benchmark rates, inflation, and quantitative tightening.

Headline News Summary

• The Fed cut the benchmark rate by 0.25 percentage points, adjusting it to 3.75–4.00%.
• The vote was 10 to 2, with one member advocating a 0.50 percentage point cut, and one opposing a hold.
• Quantitative tightening (QT) is set to end on December 1.
• Maturing asset reinvestments will shift to a focus on short-term Treasury bills (T-bills).
• It was made clear that the possibility of an additional rate cut in December was not pre-determined.

Decision Details: Rates · Voting · QT · Reinvestment

• The benchmark rate of 3.75–4.00% marks the second cut this year, formalizing a pivot phase.
• The 10 to 2 vote, with hawks and doves coexisting, reveals divisions within the committee.
• Ending QT signifies halting the balance sheet reduction that expanded after 2020.
• The Fed had reduced its holdings of U.S. Treasuries and MBS by approximately $2.3 trillion, but will no longer be reducing them.
• Reinvestment will shift to short-term Treasuries, shortening the portfolio maturity.

Statement Changes: September vs. October

• Phrases like “available indicators” have been used to indicate reduced data availability due to shutdown.
• The statement confirmed a cooling labor market by maintaining references to slowing employment growth and a slight uptick in unemployment.
• Inflation was assessed as remaining at a level higher than at the start of the year.
• The plan to end QT was explicitly mentioned in the statement, clarifying the shift in policy stance.

Key Points from Powell’s Press Conference

• He reaffirmed that the balance of risks has shifted from a singular inflation risk to one of slowing employment.
• He emphasized a data-dependent approach, stating that the December rate cut path remains “undecided”.
• He reiterated the commitment to gradually move toward the estimated neutral rate of about 3%.
• The consideration of reinvesting in short-term Treasuries is aimed at stabilizing short-term liquidity and reducing the balance sheet duration.

Assessment of U.S. Inflation, Economy, and Employment

• The headline CPI remains in the 3% range, and core inflation is also at about 3%, still at the upper end of the target.
• Energy prices and tariff-related policies are contributing to upward pressure on short-term prices.
• Real growth is estimated at around 3.9% for Q3, suggesting that the U.S. economy remains robust.
• However, employment is cooling, and uncertainty is high due to data gaps.

Market Reaction: Why the “Stiffening” Occurred

• Short-term rates are under downward pressure due to the benchmark rate cut.
• The long-term segment (10-year U.S. Treasuries) rose, driven by expectations of inflation and fiscal/supply concerns.
• As a result, a mild bear steepening is observed, with the spread between short and long-term rates widening.
• The dollar index strengthened due to the rate differential and risk aversion, while the stock market experienced a correction.
• The “undecided” guidance for a December cut acted as a disappointment factor for stocks.

Policy Transmission Mechanism: The Process of Ending QT

• Ending QT stops the outflow of reserves, mitigating liquidity pressures in the banking system.
• Reinvestment in short-term Treasuries contributes to stabilizing the short-term repo market by absorbing MMF’s RRP balances.
• Shortening the duration is designed more to stabilize the short-term segment rather than necessarily lower long-term rates.
• It is more accurately understood as “ceasing tightening → preparing for easing” rather than an immediate shift to QE.

December Scenario Map

• Scenario A: 25bp cut + lower dot plot, mixed long-term rates, potential rebound in stocks.
• Scenario B: Hold + accommodative forward guidance, coexistence of short-term disappointment and long-term stability.
• Scenario C: Maintain “undecided” on cuts + repeated data dependency, increased volatility, and selective risk-off.
• Key determinants: inflation surprises, employment surprises, fiscal/Treasury issuance calendar, and financial conditions index.

Korean and U.S. Monetary Policy Schedule Check

• The December FOMC meeting is a major event, with the dot plot (SEP) being released.
• The Bank of Korea’s Monetary Policy Committee also has its final meeting of the year remaining, prompting a review of interest rate dynamics.
• The KRW/USD exchange rate is sensitive to the dollar index and the path of long-term rates, so managing volatility is necessary.

Investment and Management Checklist

• Rates: It is necessary to review the duration basket in anticipation of the steepening risk, with declining 2-year yields versus rising 10-year yields.
• Credit: Consider rebalancing by reducing beta amid widening spreads and focusing on high-quality assets.
• Equities: Adjust the weighting of sectors sensitive to long-term rates (such as high dividend and consumer staples) and select growth stocks with clear earnings visibility.
• Exchange Rates: In a regime of a strong dollar, implementing currency hedging policies and managing settlement exposures are important.
• Commodities: Upward pressure on energy prices can lag and be reflected in core inflation, making cost pass-through strategies necessary.

Key Points Often Overlooked (Not Covered Elsewhere)

• Ending QT is a mechanism to support the liquidity floor, not an immediate jump to QE.
• Reinvestment in short-term Treasuries absorbs RRP balances, smoothing the reserve path.
• Shortening duration does not guarantee lower long-term rates; in fact, combined with fiscal and supply factors, it can increase volatility in the long-term segment.
• The shift in the balance of risks may be a harbinger of a “temporary tolerance of overshooting inflation targets.”.
• If increased net Treasury supply coincides with regulatory factors, the risk of long-term inflation expectations becoming unanchored may resurface.

One-Page Practical Summary

• Positioning: Review the combination of 2s10s steepener, bottom-up quality growth, and long dollar positions.
• Events: Mark your calendars for the CPI, employment reports’ normalization, the Treasury issuance schedule, and the December SEP.
• Risks: Monitor risks such as a resurgence in inflation, a sharp rise in long-term rates, an overly strong dollar, and widening credit spreads.
• Opportunities: The end of QT may help alleviate short-term money market volatility by preventing a reserve floor, potentially opening selective risk asset rally points.

< Summary >

• The Fed cut the benchmark rate by 25bp to 3.75–4.00% and signaled that QT will end on December 1.
• The possibility of an additional rate cut in December remains undecided, reaffirming a data-dependent approach and a shift in the balance of risks.
• While short-term stability coexists with long-term uncertainty, the key reactions are the steepening between short and long-term rates and a strong dollar.
• Ending QT supports the liquidity floor rather than signaling QE, and reinvestment in short-term Treasuries helps stabilize reserve flows.
• Investment and management strategies require defensive flexibility centered on duration, quality, and currency hedging.

[Related Articles…]
FOMC rate cut and end of QT, the next steps in the inversion of short- and long-term rates
Post-QT dollar liquidity and 10-year U.S. Treasuries’ directional outlook

*Source: [ 경제 읽어주는 남자(김광석TV) ]

– [속보] 10월 FOMC 연속 금리인하와 양적긴축(QT) 종료 : ‘12월 금리인하 여부’는 결정되어 있지 않아 [즉시분석]

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● Dovish Fed Shock, Dollar Plunge, AI Mania

October FOMC Core Guide: Statement Language Changes, Powell Press Conference Tone, Bond · FX · AI Sector Scenarios Fully Summarized

This article contains a checklist of phrases likely to change in the statement, key points of Powell’s press conference questions, market reactions by interest rate policy scenario, the ripple effects on the dollar exchange rate and emerging markets, and asset allocation strategies for the AI infrastructure, semiconductor, and power sectors, all in one place.
In particular, it separately summarizes the liquidity microstructure (ON RRP, SRF, Treasury refund schedule) that is rarely covered on other channels, the interaction between QT and Treasury issuance, and the year-end G-SIB regulation along with short-term rate volatility risk.
It compresses into news format what might change depending on the flow of the U.S. economy and the pace of inflation slowdown, so that it can be immediately applied to real portfolios.

6 Things the Market Will Immediately Check at This October’s FOMC

• Keywords for changes in the statement language.
  Check whether expressions like “additional tightening,” “appropriate additional policy,” or “data-dependent” are maintained, eased, or removed.
  See if the phrase “inflation remains at elevated levels” is toned down, or if the assessments of “economic activity” and “employment” move in a more balanced direction.

• Powell press conference tone and sentence structure.
  If the phrase “risk balance” appears for the first time or is emphasized, it is an early signal for a probability of a rate cut.
  If the expression “the restrictive level of interest rates will be maintained for sufficiently long” is strengthened, it indicates a gradual dovish step.

• QT (balance sheet reduction) path and liquidity mentions.
  If the ON RRP balance is in the low range, concerns about reserve scarcity increase.
  Whether the use of the SRF (standing repo facility) is acknowledged as a buffer indicates stress in the short-term funding market.

• Recognition of changes in Financial Conditions.
  If the tightening effect encompassing rising interest rates, stock prices, spreads, and the dollar is mentioned, the additional hiking risk is low.

• Updates on evaluations of energy and housing inflation.
  How the expected re-rising of oil prices impacts inflation expectations is key.
  Confirm whether the housing component is reaffirmed to be easing in the future.

• The sentence on risk balance.
  Check whether more weight is given to the risk of slowing growth or the risk of a re-ignition in inflation.

Market Reactions by Scenario (Bonds · Equities · FX · Crypto)

• Scenario A: Language easing + dovish Powell tone.
  Bonds: 2-year yields decline, with a gradual steepening of the yield curve across maturities.
  Equities: Preference strengthens for growth stocks, AI infrastructure, and semiconductors, while defensive sectors underperform relatively.
  FX: Dollar weakness, with the won and yen likely to strengthen.
  Crypto: Risk-on tendencies increase, while sensitivity to regulatory news remains.

• Scenario B: No change + emphasis on data dependence (baseline).
  Bonds: Volatility decreases, and the yield curve moves within its range.
  Equities: A market centered on earnings and guidance, with big tech and industrials relatively strong.
  FX: Dollar remains firm, while trade currencies differentiate according to sector momentum.
  Crypto: Trading within a range.

• Scenario C: Hawkish surprise (warning of re-accelerated inflation, strict stance on QT).
  Bonds: Short-term rates surge, with a bear steepening leading to a switch in preference to value and bank stocks.
  Equities: A correction in growth and high-value stocks, with energy and materials showing relative strength.
  FX: Dollar strength, with the won and yen weakening, and concerns over capital outflows from emerging markets.
  Crypto: A risk of expanded volatility and downward pressure.

Data Checklist: Key Indicators Powell Is Likely to Mention

• PCE Price Index: The key is the presence of downward momentum in the core 3-month and 6-month annualized figures.
• Wages · Employment: The direction of non-farm payrolls, the unemployment rate, average hourly earnings, and a deceleration in the job openings-to-hires ratio (JOLTS).
• Service Prices: Whether the housing component through OER and rents continues its disinflation trend.
• Energy · Commodities: Changes in oil, refining margins, and the contribution of food prices.
• Financial Conditions Index: Whether higher rates and widening spreads have already tightened the real economy.

Bonds and Interest Rate Policy: Positioning Roadmap

• Short-term: The 2-year is most sensitive to “language changes.”
  In a dovish language scenario, extend duration; in a hawkish one, a bearish hedge is necessary.
• Medium-term: The 5-year and 10-year depend on the “term premium” and the Treasury issuance calendar.
  When the repo market liquidity and Treasury refund schedule align, the ceiling on interest rates changes.
• Practical Tip: In the OIS swap market, manage risk by combining the implied probability of a rate cut with a 2s10s steepener/flattener strategy.

Dollar Exchange Rate and Emerging Markets: Key Points for the Won and Yen

• The dollar responds to “relative growth · relative rates” and “risk-off” sentiment.
  If the U.S. economy remains robust and inflation persists, the dollar tends to stay strong.
• Korean Won: Korea’s recovery in exports and the semiconductor cycle act as supports.
  In a dovish FOMC, the exchange rate moves downward; in a hawkish scenario, the first resistance level is likely to be retested.
• Japanese Yen: The key factors are the interest rate differential and the unwinding of carry trades.
  If a dovish FOMC tone coincides with hints of normalization in Japanese policy, a rapid reversal is possible.

Equities and Asset Allocation: Sector-Specific Responses

• Growth Stocks · AI: Although these are sensitive to interest rates, data center CAPEX, power, and network investments are structural drivers.
  In a dovish tone, expect multiple expansion; in a hawkish tone, increase the proportion of hardware and component stocks with clear earnings visibility.
• Industrials · Energy: These sectors tend to perform relatively well in a bear steepening environment.
• Financials: Improvement in NIM in a steepener across short and long maturities revitalizes expectations.
• Defensives: Their role in cushioning volatility makes them useful for cross-hedging.
• Asset Allocation: When the correlation between stocks and bonds is positive, mix in cash, short-term bonds, and alternative assets; when it shifts to negative, increase duration.

AI Trend Insights: 5 Impacts the FOMC Has on the AI Cycle

• Data Center CAPEX Financing Costs.
  As monetary policy eases, hyperscalers accelerate their investment execution, boosting demand for power, cooling, and networking.
• A Turning Point in the Semiconductor Cycle.
  While HPC and HBM demand remain solid, a hawkish tone may cause multiple discounts to be reflected first.
• Valuation of Power Infrastructure and Regulated Utilities.
  As peak loads rise with increased AI demand, a rate cut is favorable for the DCF of regulated utilities.
• Software Revenue Recognition.
  Corporate IT budgets are sensitive to interest rates and macro uncertainties.
  A dovish tone could accelerate the adoption of AI copilots and agents.
• The Small-Cap AI Ecosystem.
  An improved capital-raising environment increases the survival rate of startups in models, chips, and systems.

Points Rarely Covered by Other YouTube Channels or News Outlets

• The Dynamics of QT and Treasury Issuance.
  While QT persists, if the Treasury increases the proportion of short-term debt, the money market is buffered, but expanded coupon issuance can raise the term premium and push the ceiling of medium- to long-term rates higher.
• Low Levels in the ON RRP Range and Reserve Scarcity.
  If RRP balances hit the bottom, variability in bank system reserves increases, and as dealers’ balance sheets become burdened by managing year-end G-SIB surcharges, spreads can spike.
• The Signal Function of the SRF.
  An increase in SRF usage indicates accumulating “technical stress,” and if Powell openly acknowledges this, it may signal an adjustment in the pace of QT.
• Treasury Refund Schedule and Exchange Rates.
  A month with large-scale refunds can open up global dollar liquidity and reduce exchange rate volatility.

Quick Checklist for Traders

• If the term “additional tightening” is weakened in the statement, consider entering a long position and steepener on the 2-year.
• If Powell repeatedly mentions “restrictive for a long time,” rather than selling volatility, a calendar spread may be advantageous.
• If the phrase “risk balance” appears for the first time, it is a signal to short the dollar and expand exposure to emerging markets.
• If specific numerical figures are mentioned regarding QT and liquidity, prepare for increased short-term rate volatility.

From the Perspective of Korean Investors: Bridging the U.S. Economy and Domestic Markets

• The KOSPI is driven by the earnings direction of semiconductors, secondary batteries, and internet-related sectors.
  A dovish FOMC improves foreign investor inflows along with the exchange rate.
• For bonds, 3- to 5-year durations are most efficient in hedging the beta risk of policy changes.
• In won asset allocation, dynamically adjust dollar hedges and increase the utilization of dividend stocks and REITs as interest rate policy changes.

FAQ: 5 Frequently Asked Questions for This Meeting

• Will there be guidance on the timing of a rate cut?
  Rather than providing explicit guidance, it is likely to emphasize data dependence and decision-making at each meeting.
• Will QT be adjusted?
  Discussions about adjusting the pace occur when liquidity stress accumulates.
• Once inflation nears the target, will a pivot follow immediately?
  Expressions such as “until we have sufficient confidence” may be repeated to caution against the risk of a re-ignition in inflation.
• Is there a concern about a strong dollar?
  While not an explicit target, it is indirectly reflected through the trajectory of financial conditions.
• Will the assessment of inflation components by sector change?
  The key is the confidence in the easing of housing inflation and the evaluation of energy price volatility.

Risks and Opposite Scenarios

• If a hawkish tone surprises along with strong employment data, volatility in growth stocks increases.
• If a geopolitical or supply shock causes a rapid surge in oil prices, the inflation trajectory could be disrupted.
• If there is tightening in the money markets at year-end, short-term rates and exchange rate volatility may expand.

Practical Positioning Examples (For Educational Purposes)

• Base case: Start with a portfolio of 45% equities, 40% bonds, and 15% alternatives/cash, then adjust equities by ±5 and duration by ±2 years according to the FOMC tone.
• Dovish tone: Increase weights in Nasdaq, AI infrastructure, and Korean semiconductors, while reducing the dollar hedge. Consider a partial long position on break-even inflation.
• Hawkish tone: Increase allocations to energy and banks, reduce exposure to high-value growth, increase the dollar, and add tail hedges using interest rate swaption strategies.

What You Gain by Reading Until the End

This framework deciphers the interest rate policy path using the three elements of statement language, tone, and liquidity, and allows for a structural realignment of asset allocation across bonds, equities, FX, and AI.
It distinguishes between the U.S. economic cycle and the pace of inflation slowdown, offering a strategy that modularizes positions by scenario.
It also provides a consolidated summary of the link between exchange rates and the domestic market.

< Summary >

• If the statement language and Powell’s tone shift toward “risk balance,” it is a dovish signal.
• In a dovish scenario, the typical response is a drop in 2-year yields, a rise in growth stocks and AI, and a weakening dollar.
• In a hawkish scenario, prepare for a bear steepening, with strength in value and energy stocks and a strengthening dollar.
• The liquidity microstructure such as QT, ON RRP, and SRF is key to year-end volatility.
• Korean investors adjust asset allocation in relation to exchange rates and the semiconductor cycle.

[Related Articles…]

• A Turning Point in U.S. Interest Rate Policy and 2025 Core Asset Allocation Strategies
• AI Infrastructure and the Power Crisis, A One-Stop View of Data Center Economics

*Source: [ Maeil Business Newspaper ]

– [LIVE] 10월 FOMC 성명서 해설 l 파월 기자회견

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● Gold Bloodbath, Peak Gold Panic

Gold Price Plummets for the First Time in 12 Years, Should You Buy or Sell: Practical Strategy Interpreting Peak Gold, M2, and Dollar Risks

Key Points to Check in Today’s Article

This article summarizes the actual trigger of the recent plummet and the five structural causes as if it were a news report.

It breaks down the decisive differences between the 1980-2000 bear market and the current situation using a conceptual diagram.

It explains why the linkage of peak gold and M2, along with the weakening of dollar credibility, leads to overshooting prices.

It provides practical countermeasures for the “Kimchi Premium” that only Korean investors experience, along with exchange rate variables.

It offers a portfolio allocation guide and a step-by-step checklist for buying and selling to help determine whether to buy or sell now.

Breaking News Briefing: Gold Prices Undergo the Biggest Correction in 12 Years

International gold prices have experienced a double-digit drop, marking the steepest decline in 12 years.

After a rally culminated in overshooting, profit-taking combined with increased volatility occurred.

Domestic physical gold has occasionally traded at a 10-20% premium over the international price due to the “Kimchi Premium.”

This time, the nature of the decline is different because the international price itself has been significantly shaken.

Global economic uncertainty, along with influences from interest rates, fluctuations in the dollar, and the stock market rally, have all played a role.

The Three Direct Causes of This Plummet

First, a technical correction occurred as the overshooting range, where gold prices had exceeded the M2 growth path, shrank.

Second, the safety premium on assets surrounding policy events was partially dissolved as risk appetite was restored.

Third, news of easing US-China tariff and geopolitical risks triggered short-term selling.

These three factors coincided, amplifying volatility.

Long-Term Structure 1: Peak Gold in Supply and Reduced Elasticity

Between 1980 and 2000, a surge in gold mine discoveries and production led to a 20-year decline.

In contrast, the past decade has seen a significant drop in supply elasticity due to sluggish new large-scale mine discoveries and restrictions from environmental and licensing regulations.

Exploration expenses have increased, but it has become challenging to find commercially viable reserves.

The percentage of annual new production relative to the total accumulated supply has significantly decreased compared to the past.

This structure creates a situation where supply does not immediately increase even when prices rise.

Long-Term Structure 2: Clash Between “Slow-Growth Supply” and “Fast-Growth Money Supply”

Gold, as an asset accumulated by humanity, is never destroyed and only accumulates over time.

While new production only grows by about 1-2% annually, the broad money supply (M2) has expanded at a much higher long-term rate.

As a result, gold prices tend to follow the M2 growth path and later correct as they overshoot.

In periods of weakened dollar credibility, the degree of overshooting tends to be greater.

Cycle Review: Three Lessons from the Past

Lesson 1: At the onset of the 2008 financial crisis, gold may drop first as investors prefer cash.

Later, when liquidity began to be supplied, gold quickly resumed its upward trend.

Lesson 2: Long-term corrections, such as that between 2011 and 2015, were triggered by a fear of production expansion.

However, actual production increases were limited, and the “peak gold” logic subsequently emerged.

Lesson 3: Although gold is a safe-haven asset, its volatility is by no means low, so managing your allocation and rebalancing is crucial.

Changes in the Demand Side: Central Banks, Asian Physical Demand, and ETFs

In recent years, net buying by central banks has changed the quality of gold demand.

Physical demand from China and India tends to increase flexibly during price corrections.

ETF funds switch between inflows and outflows rapidly, heightening short-term volatility.

When these three factors coincide, the bottom and top of the price range can shift quickly in a short time.

Checklist Exclusively for Korean Investors: Kimchi Premium, Exchange Rates, and Taxation

Domestic physical gold can command a premium over international prices due to supply-demand imbalances and taxation/distribution structures.

If the domestic premium remains during an international price decline, it can impede arbitrage, reducing the perceived drop.

When exchange rates rise, they can offset or even reverse the international price decline.

Compare the total costs, as each purchasing channel has different VAT, spreads, and storage fees.

Check liquidity and tax implications in advance for physical gold, the KRX gold market, ETFs, and gold deposit accounts.

Should You Buy or Sell Now: Strategy by Profile

For long-term investors, it is recommended to maintain a basic allocation of 5-10% within your portfolio, with gradual buying and periodic rebalancing.

Consider purchasing in fractions: the first phase at a 10% drop from the previous high, the second phase at a 15% drop, and the third phase at a 20% drop.

For short-term traders, it is advantageous to employ dynamic selling and re-entry into lower levels while real interest rates and the dollar index rebound.

Given that leverage and futures can lead to excessive profit and loss swings during high volatility periods, strict stop-loss rules are necessary.

If you have a large leveraged position in the stock market, consider increasing your hedging allocation with gold as part of your risk budget.

Future Outlook: Base Scenario and Risks

In the base scenario, after a short-term correction, gold is expected to trend upward in the medium to long term, reflecting the M2 growth path and fiscal deficit risks.

Potential upside catalysts include signals of accommodative monetary policy, renewed inflation, geopolitical shocks, and increased net buying by central banks.

Downside risks include a sharp rise in real interest rates, a resurgence of a strong dollar, initial cash preference during a recession, and massive ETF redemptions.

Key indicators to monitor include the 10-year TIPS real interest rate, the dollar index, the direction of M2 growth, U.S. fiscal policy, and Chinese economic stimulus.

An Important Point Not Often Mentioned in Other YouTube or News Outlets

Content incentive distortions can lead some channels to have biased asset recommendations due to appearances and advertising interests.

The collapse in supply elasticity means that even though prices rise, factors such as ESG regulations, lower-grade ore, and prolonged licensing delays prevent immediate increases in supply.

Recycling delays: Initially, an increase in scrap inflow during a steep decline can create an illusion of oversupply, which may delay the price rebound turning point.

Two-stage hedging for the primary currency: Hedging Korean won assets with dollars and dollar assets with gold can effectively manage volatility through a double layer of defense.

Minimizing overall costs: Factoring in spreads, taxes, storage, and currency hedging fees, the “net purchase price” can significantly impact returns.

Practical Checklist: A Guide for Immediate Implementation

Allocation rule: Set a ±3% band around a target of 7%, and implement automatic rebalancing if the allocation deviates.

Buy timing: Purchasing gradually near the upper range after a 20-day volatility breakout or approaching the 200-day moving average can be effective.

Sell timing: If real interest rates rise sharply and the dollar strengthens simultaneously, reduce your allocation.

Diversification: For physical gold, consider security and storage; for KRX, check spreads and taxes; for ETFs, consider management fees; for gold deposit accounts, monitor exchange rates and fees.

Risk management: If using leverage, limit daily losses to within 1% of your account balance.

Conclusion: “Volatility Is an Opportunity,” But Trade According to Your Rules

This recent decline is more about the dissipation of overheating and the adjustment of risk premiums rather than a structural shift to weakness.

The combination of peak gold, M2, and dollar credibility supports the long-term upward trend.

However, gold is a safe haven that also exhibits significant volatility.

Adhere to your predetermined allocation, rebalancing, and phased buying rules to navigate the market.

In times of high global economic uncertainty, following a rules-based approach helps protect returns.

< Summary >

The fundamental reason behind the gold plunge is the correction of overshooting and the reduction of risk premiums.

Supply, constrained by peak gold, is inelastic, while demand continues to experience upward pressure over the long term due to M2 expansion and dollar credibility.

Korean investors must optimize total costs by considering Kimchi premiums, exchange rates, and taxation.

A basic allocation of 5-10%, combined with phased buying, rebalancing, and monitoring of real interest rates, the dollar, and M2, forms the execution strategy.

[Related Articles…]

Structural Transition in the Gold Cycle and Portfolio Hedging Strategies

The Impact of Dollar Liquidity and Changes in Real Interest Rates on Asset Prices

*Source: [ jisik-hanbang ]

– 12년 만에 최대 폭락, 금 팔아야 하나? (박종훈의 지식한방)

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