International precious metals futures saw broad declines in early trading on August 7, with COMEX gold futures down 0.15% to $4,298.70 per ounce and COMEX silver futures down 0.81% to $61.78 per ounce, as reported by financial media.
Analysts attributed the slight downturn to a combination of global central banks maintaining steady policies and cooling U.S. employment data, which eased inflation concerns. While looser liquidity expectations provided a floor for gold prices, market sentiment has not fully shifted, leading to a modest decline amid a tug-of-war between buyers and sellers.
Where to start with the recovery?
According to a recent analysis from Yide Futures, the precious metals sector has seen a rotation in recent days, with platinum and palladium breaking out first, followed by gold and silver. This marks a clear shift from the sector's six-month slump, indicating a potential transition from bearish to bullish positioning.
Yide Futures noted that gold's stabilization and recovery began in mid-July, when it found support during a second bottoming attempt. Although the month was volatile, gold's price resilience strengthened significantly. Two rebound phases occurred in early and late July, driven by improving liquidity and increased allocation buying. A resurgence of tensions in mid-July temporarily raised holding costs, but the interest rate impact was mainly fueled by a rise in term premiums, which actually reinforced the narrative of structural reordering, limiting downward pressure on gold.
Why could this rally be different?
Looking ahead, Yide Futures believes this gold price rebound may differ from previous ones, potentially showing greater sustainability. The key reason is that the core bearish factors—both domestic and international—related to structural reordering trades have already passed significant peaks. On one hand, central bank gold buying data shows that sold positions are gradually being absorbed by central banks increasing their purchases. On the other hand, the market's impression of the Federal Reserve's dovish core is unlikely to change significantly.
Yide Futures advises against chasing prices at current levels, recommending instead to buy on dips during geopolitical tensions or when economic data negatively impacts prices.
On the news front, the China Gold Association reported that gold consumption in the first half of the year totaled 511.412 tons, up 1.23% year-on-year. Within this, gold jewelry consumption fell 33.88% to 132.133 tons, while gold bar and coin consumption surged 28.42% to 339.336 tons, and industrial and other uses declined 2.9% to 39.943 tons.
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