Gold-related equities are trading broadly lower in Hong Kong, with Shandong Gold Mining Co Ltd (HKG: 01787) dropping 5.78% to HK$23.16, while Lingbao Gold Co Ltd (HKG: 03330) fell 5.26% to HK$23.40. Meanwhile, Zijin Gold International (HKG: 02259) declined 4.21% to HK$154.80, and China Gold International Resources Corp Ltd (HKG: 02099) slipped 4.52% to HK$245.00.

On the macro front, the Federal Reserve has raised its benchmark interest rate by 25 basis points, lifting the target range for the federal funds rate to 3.75%-4.00%. This marks the first rate increase since July 2023 and aligns with market expectations. However, the hawkish tone from the dot plot and comments by Fed Governor Christopher Waller have signaled that the tightening cycle is far from over.

The latest dot plot indicates that the median projection for the federal funds rate at the end of 2026 has been revised upward to 4.1%, up from 3.8% in June, with 16 officials anticipating at least one additional rate hike this year. Waller noted that U.S. inflation remains elevated, adding that there is scant evidence to suggest that inflationary trends are passing the test.

Where to begin with the outlook: According to China Guangfa Futures, the outcome of this FOMC meeting has placed clear short-term pressure on gold prices. The combination of Waller's hawkish rate hike and hints of further tightening suggests that expectations for higher interest rates may not yet be fully priced in. Looking ahead, two key variables warrant close attention: first, the trajectory of upcoming U.S. economic data, particularly whether inflation shows a meaningful decline; and second, whether long-term U.S. Treasury yields can retreat from their elevated levels near 5%.