Recent US employment figures have shown resilience, with the May ADP report adding 122,000 jobs, a high for the current phase, pushing up interest rate expectations and creating a clear standoff between bullish and bearish forces that is pressuring gold prices in the short term.
The latest reserve data disclosed by the European Central Bank on June 2nd shows that by the end of 2025, gold's share of global official reserves reached 27%, officially surpassing the 22% share of US Treasury securities and becoming the top reserve asset for central banks worldwide. As of 10:20 Beijing Time, COMEX gold futures were trading at $4,483.6 per ounce, down slightly on the day but still up approximately 4% year-to-date. In the domestic gold ETF space, E Fund Gold ETF (159934) was quoted at 9.695 yuan during the June 4th session, a minor increase of 0.03% from the previous trading day, with an intraday high touching 9.718 yuan.
Historical Turning Point in Reserve Structure
The latest report from the European Central Bank signals a structural watershed for the global reserve system. The 27% share of official gold reserves at the end of 2025, surpassing the 22% share of US Treasuries for the first time, reverses a long-standing trend. This reversal is underpinned by years of strategic accumulation by central banks globally—purchasing 850 tonnes in 2025 and continuing with an additional 244 tonnes in the first quarter of 2026, even amidst elevated gold prices. This shift in reserve composition is transforming gold from a short-term safe-haven instrument into an institutionalized allocation asset. The demonstrative effect of central bank buying is spreading to major institutional investors like insurance funds and pension funds, driving the inclusion of gold ETF products into long-term institutional portfolios. This trend is not dependent on short-term interest rate fluctuations, providing a historically significant foundation of demand for the gold price.
Short-Term Disruptions from Strong Employment Data
The US May ADP employment report showed an addition of 122,000 jobs, significantly exceeding market expectations. The resilience of the labor market has weakened market pricing for Federal Reserve rate cuts within the year. The US Dollar Index was quoted at 99.45, showing slight strength, while the US 10-year Treasury yield remained elevated at 4.49%. The combined strength in interest rates and the dollar increases the opportunity cost of holding gold. COMEX gold has retreated approximately 0.65% over the past month, and domestic gold ETFs also experienced a single-day decline of 1.44% yesterday. In the short term, the robust employment data has interrupted the narrative of gold rebounding on rate cut expectations, with pressure from the interest rate side posing a temporary constraint. However, taking a longer-term view, the demand increment driven by the restructuring of reserves is fundamentally different from speculative trading capital, exhibiting greater stickiness and persistence.
Gradual Unfolding of Institutional Allocation Logic
The demonstrative effect of central bank gold purchases is propagating along a path from sovereign wealth funds to insurance funds, pension funds, and public fund FOFs. Gold is gradually shifting from its past label as a "crisis hedge" to an "institutional allocation target." This redefinition of its asset attributes implies a systematic reduction in volatility on the demand side. For reference, the world's largest gold ETF, SPDR Gold Shares (GLD), has assets under management exceeding $70 billion, while the total size of domestic gold ETFs in China still has significant room for growth. The incremental capital space created by the reserve structure transformation warrants attention. The recent short-term pullback in gold prices stems more from a technical correction in interest rate expectations rather than a trend reversal, potentially offering a more favorable entry window for medium-to-long-term allocation.
Analysis of Key Companies
Zijin Mining Group Co., Ltd. (601899.SH) is China's largest gold producer, with an attributable mined gold production of approximately 73 tonnes in 2025. Under its dual-core business model of copper and gold, the gold segment contributes stable profits. Its overseas mine portfolio continues to expand, and its resource reserves rank among the top globally. Its share price was quoted at 30.47 yuan during the June 4th session, down about 2.56%.
Shandong Gold Mining Co., Ltd. (600547.SH) is a long-established domestic gold leader, with an annual mined gold production of around 40 tonnes. Its key mines, such as the Jiaojia and Sanshandao gold mines, maintain stable ore grades. The capacity of its overseas Veladero mine is gradually being released, and its cost control capabilities are industry-leading. Its share price was quoted at 28.90 yuan, down about 1.67%.
Zhongjin Gold Corp., Ltd. (600489.SH) is controlled by its parent company, China National Gold Group Co., Ltd. (600916.SH). Its mines, such as Inner Mongolia Mining and Hubei Sanxin, possess excellent resource endowments. Expectations for potential asset injections have been rising in recent years, and its mined gold production is steadily increasing. Its share price was quoted at 22.59 yuan, down about 2.33%.
Chifeng Jilong Gold Mining Co., Ltd. (600988.SH) has achieved leapfrog growth in recent years through overseas acquisitions. The Sepon mine in Laos and the Wassa mine in Ghana are the main contributors to its production growth. Its mined gold production exceeded 18 tonnes in 2025, highlighting its strong growth profile. Its share price was quoted at 32.30 yuan, down about 3.44%.
Investment Considerations
Three key narratives form the core story for gold assets currently: First, the restructuring of reserve composition is a fundamental, historically significant variable. Central bank gold buying has been upgraded from a tactical operation to a strategic deployment, with its sustainability not reliant on short-term gold price movements. Second, the short-term pullback triggered by employment data represents a phase of correction in interest rate expectations and does not alter the medium-to-long-term direction of gold's changing asset attributes. Third, the path for institutional allocation is clear, with the entry of long-term capital from insurance and pension funds expected to bring incremental demand to gold ETFs. The E Fund Gold ETF (159934) tracks the price of the Shanghai Gold Exchange's AU9999 spot contract, has a management fee rate of 0.50%, and provides a highly liquid tool for on-exchange investors to gain direct exposure to gold. The current gold price is in a phase of correction within a historically high range, presenting an opportunity to watch for a medium-to-long-term allocation window following the adjustment.
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