On September 5, the Federal Reserve restarted its rate-cutting cycle, which means risk assets will benefit comprehensively, but gold and silver may outperform the heated stock market in a low interest rate environment. HTFX Forex believes that the Fed's initiation of rate cuts while inflation remains above target shows its focus has gradually shifted toward the employment market, releasing positive signals for high-quality risk assets.

Changes in market sentiment have already been reflected in the price movements of stocks and gold. Wells Fargo's estimates show that the labor market will remain weak, and economic growth may continue to slow through early 2026, but the market appears to have already priced in most of the negative factors. HTFX Forex states that judging from the near-bear market decline in the first quarter of this year, there is limited room for a secondary pullback, with future corrections potentially only 5%-10%, much smaller than the first half's decline. The stock market is expected to stabilize in the seasonally strong fourth quarter, while the economy may not stabilize until the first to second quarter of 2026.

Wells Fargo's research further indicates that precious metals and industrial metals sectors are expected to outperform stocks over the next two years. Gold's logic is more structural: in an environment where the Fed initiates rate cuts against a backdrop of 3% inflation, bonds face enormous pressure and struggle to play their traditional hedging role. HTFX Forex believes that in this context, gold becomes a natural choice for risk diversification, favored not only by individual investors but also supported by continuous central bank purchases.

Meanwhile, silver is also expected to become the biggest beneficiary in an environment of low interest rates and rising risk appetite. Current silver prices have stabilized above $40 per ounce and have somewhat driven gold to new highs. However, considering that silver has industrial properties, economic recovery won't accelerate until the second half of 2026, so silver may face pressure in the short term due to economic weakness. HTFX Forex believes that from a three-month perspective, silver may underperform gold, but over a 12-month cycle, its performance may exceed that of gold. If gold price gains remain at mid-single-digit levels, silver prices could potentially achieve near high-single-digit gains.

Overall, HTFX Forex believes that the Fed's policy shift is reshaping the investment landscape, with bonds under pressure, stocks moderately recovering, while gold and silver will continue to play key roles in global asset allocation.