Guotai Junan Futures: Gold Rebounds, Analyzing the Underlying Logic
Guotai Junan Futures Market Analyst
Zhang Chining
Z0020302
Recently, gold has continued to correct, testing the 4000 psychological level. After several trading days of sideways movement, a significant rebound finally occurred; currently, the London gold price is surging towards the 4200 mark, and domestic Shanghai gold is following the uptrend, making market volatility very eye-catching. Today, let’s review the causes and effects behind this gold rebound.
This round of gold rebound mainly stems from several factors,
1. Firstly, the non-farm payrolls “reversed” much quicker than expected.
Before the release, the market generally held an optimistic view of the June non-farm payrolls: on one hand, the previous non-farm figure was well above expectations, and on the other hand, the opening of the World Cup in June brought a series of temporary job gains in sectors such as catering, accommodation, security, and retail. In addition, previous positive signals regarding employment stability from US Treasury Secretary Besant and Federal Reserve Chair Walsh led the market to expect an 110,000 increase. However, last night’s data completely reversed expectations, with the actual figure only 57,000—basically halved—and both April and May figures were also revised downward. The US labor market has clearly cooled, the US dollar index took the opportunity to retreat towards 100, and gold prices surged accordingly.
2. Statements from Federal Reserve officials have downplayed concerns over rising inflation
On July 1st at the Sintra Forum, Federal Reserve Chair Walsh said: “In recent weeks, both inflation expectations and inflation risks have declined.” This comment reinforced market speculation that inflation has peaked and is receding, naturally providing fuel for the rally.
3. Retreat in the equity markets has triggered small-scale risk aversion flows
Recently, US technology stocks have collectively taken profits, causing a slight cooling in secondary market risk appetite. A small amount of safe-haven funds have briefly flowed into gold assets, further supporting the rally.
However, from the current situation, gold still doesn’t have a solid foundation for a strong surge upward; let’s examine it from a few dimensions.
[Preconditions for a rate cut have not yet been met]
Part of gold’s momentum is based on expectations of looser monetary policy, but whether the Federal Reserve cuts rates depends first on the need to suppress inflation while also stabilizing employment. Employment data reveals the urgency of rate cuts, while inflation is a necessary precondition. Recently, inflation data is still on the rise, with no turning point in sight. Therefore, changes in June’s CPI data will be critical moving forward.
[No significant capital inflow detected yet]
Usually, sustained capital inflows are needed to support a major gold rally; however, SPDR Gold ETF holdings have been seeing net outflows recently. Even yesterday’s rebound saw ETF holdings decrease by nearly 4 tons, with the overall position approaching 1,000 tons.
As for the indicator of short-term speculative capital movement—CFTC non-commercial net long positions (noting this is lagging data and does not yet cover the timing of this rebound)—last week also did not show any significant increase in positions.
[No effective technical breakout yet]
Finally, from a technical perspective, on the daily chart, the downward trend line that has persisted for about half a year has not been broken, and the price is still running under pressure overall.
Therefore, for now, the weakening job market and short-term sentiment catalysts from officials’ remarks may not be sufficient to reignite a medium- to long-term bull market in gold; patiently waiting for a confluence of signals from fundamentals, capital flows, and technical indicators will be crucial.
Cut-off time: July 3, 2026, 13:19 (UTC+8)
Editor: Zhu Henan
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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