The price of gold concluded this week with an end to its four-week consecutive decline. As of the New York close on Friday (July 3rd), London spot gold was quoted at $4,174.14 per ounce, marking a 1.18% increase.
COMEX gold futures settled at $4,187.3 per ounce, rising 1.49% and gaining approximately 2.1% for the week.
Driven by the recovery in international gold prices, several major domestic jewellery brands have simultaneously raised the prices of their pure gold products. Multiple brands have adjusted their quotes to around 1,260 yuan per gram, representing an increase of about 30 yuan per gram compared to the previous two days.
Market analysis suggests this rebound in gold prices is primarily attributed to weaker-than-expected US economic data and shifting expectations regarding Federal Reserve interest rate cuts. Key data released by the US Bureau of Labor Statistics showed that US non-farm payrolls added 57,000 jobs in June, significantly below the market forecast of 110,000 and marking the lowest increase in nearly four months.
Furthermore, the non-farm payroll data for April and May were revised down by a combined 74,000 jobs. However, the unemployment rate for June unexpectedly fell to 4.2%, lower than the market's expectation of 4.3%.
This week, Federal Reserve Chair Warsh noted that the inflation outlook has recently improved, partly due to declining energy prices, but core inflationary pressures may still remain above the 2% target. Warsh did not provide a clear stance on whether a rate hike would occur at the July meeting. According to the CME FedWatch Tool, market expectations for the Fed holding rates steady in July have increased, while the probability of a 25-basis-point hike in September has decreased to 53.5%, down from approximately 65% prior to the release of the jobs data.
Institutional Outlook: Gold May Remain Range-Bound in Short Term
In its latest research report, OCBC Bank has upgraded its short-term view on gold from "cautious" to "cautiously optimistic." The institution believes that if subsequent US economic data continues to weigh on real yields and the US dollar weakens further, the gold rebound could extend. However, with the unemployment rate remaining stable, Fed officials maintaining a relatively hawkish tone, and inflation risks not yet fully dissipated, gold may continue to experience short-term volatility.
Central China Securities stated that, supported by factors such as persistent global inflationary pressures, the long-term nature of geopolitical risks, and heightened financial market volatility, gold's value as a strategic asset allocation is prominent in the long run. The long-term price equilibrium for international gold is expected to continue its upward trajectory.
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