Weekly Outlook: With the Second Half Market Starting, Can Gold Rebound After Ending Its Consecutive Weekly Decline?
Written by: Jerry Chen, Senior Analyst at GAIN Capital
This week will officially kick off the second half of the 2026 markets.
After last week's weaker-than-expected US June non-farm payrolls, the Federal Reserve's rate hike pressure eased, and the US Dollar Index saw its biggest weekly drop since April, helping gold prices end their four-week losing streak. US stocks closed the week higher, with the Dow Jones Index hitting a record high.
Key focuses for the first trading week of the second half include the Federal Reserve meeting minutes, the ongoing effects of OPEC+ production increases, the movement of the yen, and the Reserve Bank of New Zealand interest rate decision.
· Federal Reserve Meeting Minutes – Thursday 02:00
The first Federal Reserve meeting chaired by Walsh sent a hawkish signal, causing the market to fully price in rate hike expectations. However, the extremely concise meeting statement revealed few details, so the market will need to pay special attention to the meeting minutes this week to gauge the different stances of policymakers.
After the non-farm data release, the debate on whether the Federal Reserve will hike rates will intensify. The rate futures market’s bet on a September rate hike has declined slightly but still remains at around 60%.
· US Economic Data and Stock Market
This week’s key US economic data includes June ISM Services PMI on Monday, May trade balance on Tuesday, and initial jobless claims on Thursday.
Tech stocks have been rangebound at high levels over the past month, with semiconductor and memory stocks pulling back sharply for two consecutive weeks. Meanwhile, sectors like healthcare, industrials, and financials have attracted capital inflows. Healthy sector rotation and a steady US economic outlook increase the likelihood of a broad-based US stock rally.
The peak of the second-quarter earnings season in late July is something to look forward to, but the strong first-quarter results have clearly raised investor expectations.
· OPEC+’s Continued Production Increase Weighs on Oil Prices
As international oil prices fell for a fourth straight week to pre-war levels, OPEC+ decided on Sunday to continue increasing production by 188,000 barrels per day in August. Since April, the organization has raised its production quota by nearly 800,000 barrels per day. However, due to infrastructure damage and export restrictions, this number remains largely theoretical.
Nonetheless, with geopolitical tensions easing, the crude oil market may once again face oversupply. On one hand, market supply has been gradually increasing since June (particularly from non-OPEC countries such as the US), while demand from Asian buyers remains sluggish. The key short-term driver for oil prices will still be the situation with passage through the Strait of Hormuz.
· Yen Drops to 40-year Low
The Bank of Japan’s rate hike in June was insufficient to alleviate depreciation pressure on the yen. Last week, the yen fell to 162.57, its lowest level in 40 years. Investors are concerned that Japan’s large-scale new spending could worsen fiscal conditions, and the 10-year Japanese government bond yield hit a 30-year high; this, in addition to inflation and the economy, is another bearish factor for the yen.
Some media reports suggest that the Bank of Japan may adjust its yen intervention strategy from advance warnings to “precision strikes” in order to increase the cost of shorting the yen. If so, such moves may briefly boost the yen, but without hawkish rate hikes by the central bank, it is unlikely to reverse short positions, and USD/JPY may continue its choppy upward run.
· Reserve Bank of New Zealand Interest Rate Decision – Wednesday 10:00 (UTC+8)
The Reserve Bank of New Zealand has a high probability of raising rates by 25 basis points this week, with markets betting on 1–2 more hikes by the end of the year. A “hawkish rate hike” from the central bank may briefly push up the NZD, while also bringing the AUDNZD down from 13-year highs.
XAUUSD Gold 4-hour Chart
The chart shows that, riding the momentum of the US dollar's decline after the non-farm payroll data, gold closed higher for the week and formed a bullish engulfing pattern, halting the four-week slump and establishing a new short-term low and bottom pattern around 3940.
According to the chart, gold opened higher on Monday and continued to challenge the 4200 level. The 4200/40 area is the primary target for bulls, but there is some resistance, and breaking through may require a period of accumulation.
If prices retreat but do not break below the 4100 mark, one can continue to look for buying opportunities on pullbacks. Conversely, if a breakout occurs, it will open up space to the upside, with bull targets moving to 4300 and the previous high near 4380. However, a strong US dollar will limit the scope of gold's rebound.
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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