- Global gold prices surged strongly in early trading on July 3rd, with New York Mercantile Exchange gold futures prices climbing back above the $4,200 per ounce mark, reaching a new high since June 23rd, reversing the previous persistent downward trend.
- The U.S. non-farm payrolls for June increased by only 57,000, significantly weaker than market expectations, prompting investors to quickly lower their expectations for the Federal Reserve's tightening monetary policy, leading to a simultaneous decline in the dollar index and short-term U.S. Treasury yields.
- Driven by this round of price rebound, the precious metals and gold concept sectors in both mainland China and Hong Kong markets collectively experienced a systematic valuation recovery, with several core heavyweight stocks recording significant gains in early trading.
Weak Economic Data Reverses Tightening Expectations
The latest U.S. non-farm employment data for June fell far short of market expectations. The weak employment data directly cooled market rate hike bets, easing pressure on monetary authorities on the policy front. As a result, the dollar index and short-term U.S. Treasury yields simultaneously retreated from high levels. As non-interest-bearing assets, the bearish factors for gold and silver and other precious metals were concentratedly released after the data was announced, significantly reducing valuation pressure and triggering strong buying and covering by global funds in the early trading phase.
Gold Assets Exhibit Oversold Recovery Characteristics
International gold prices entered a deep adjustment after reaching a historical high of $5,598 per ounce at the end of January 2026, once falling below the $4,000 mark in mid to late June, with a maximum retracement of nearly 30%, erasing all previous gains. Previously, the price was suppressed by three bearish factors: the hawkish stance of the new Federal Reserve chairman, easing Middle East tensions, and the withdrawal of speculative long funds, leading to an oversold condition. The return to the $4,200 mark this time exhibits typical technical oversold recovery characteristics.
Institutions Reaffirm Long-term Bull Market Not Ended
Despite major international investment banks such as Deutsche Bank, Goldman Sachs, Citibank, and JPMorgan collectively lowering their full-year gold price forecasts in June due to pessimistic sentiment, the market remains optimistic about the long-term trend. Goldman Sachs' latest view suggests that short-term sharp price fluctuations will not shake the fundamental support for gold's long-term upward trend. Under an optimistic scenario, gold prices still have the hope of challenging the $6,000 per ounce level by the end of the year, and the current phase adjustment has not ended this round of the gold bull market.
Policy Cycle Turning Point May Emerge in Third Quarter
Analysis by industry research institution CICC indicates that as U.S. inflation is likely to peak and enter a downward channel, the Federal Reserve's previous hawkish stance was intended to leave room for maneuver for subsequent policy shifts. The market generally expects that during July to August, as more macroeconomic indicators weaken, the tightening narrative will face a rapid reversal. TD Securities expects that gold prices may briefly dip to $3,900 before completing the final adjustment and will continue to be supported by changes in monetary policy expectations in the future.
