In-depth Comprehensive Gold Market Report

Release time：2026-07-24 Publisher：GINZO

During the overnight European and US trading session, spot gold plunged sharply from the two-week high of $4,166. Intraday maximum loss exceeded 2%. A large number of short-term long positions were closed out in a rush, nearly erasing all gains accumulated over the previous three trading days. Entering the Asian trading session, London spot gold maintained weak consolidation, trading around $4,043. The front-month COMEX gold futures contract also came under synchronized pressure, with price volatility moving in tandem with spot prices.

Domestic gold markets tracked declines overseas. Shanghai gold main contract, Gold T+D and AU9999 all fell, while the premium between domestic and overseas markets narrowed slightly. Quotes for physical gold raw materials were revised lower. However, retail prices of branded gold jewellery adjusted with an obvious lag, and terminal brand premiums remained elevated, creating a divergence between raw gold prices and retail jewellery quotes.

I. Complete Analysis of Drivers Behind the Sharp Gold Sell-off

The most critical shift in the market is the fundamental reversal of how Middle East geopolitics impact gold prices, which serves as the core trigger for the recent gold slump. Previously, market consensus held that rising geopolitical tensions would trigger safe-haven buying to support gold. However, fund trading priorities have now shifted.

The Houthi movement continues to target shipping routes in the Red Sea and Strait of Hormuz. Tensions between the United States and Iran persist, elevating transportation risks along critical global oil shipping lanes. Brent crude oil rallied strongly and broke above the $100 threshold. Markets are now pricing secondary effects from higher energy prices: crude oil acts as a fundamental commodity across industrial chains. Rising costs for gasoline, logistics and chemical raw materials fuel fears of a renewed inflation rebound.

Market priorities are now clearly defined. Interest rate expectations carry greater weight in the short run than geopolitical safe-haven premiums, leading to the counterintuitive market pattern of “rising conflict, surging oil prices and falling gold prices”. The trading logic can be summarized as: higher oil prices → expectations of inflation rebound → Federal Reserve maintains tightening policy or delivers additional rate hikes → US Treasury yields rise → opportunity cost of holding non-interest-bearing gold increases, prompting capital outflows from gold toward interest-bearing assets such as US dollars and US Treasuries. The brief period of synchronized rallies in oil and gold has ended, and the traditional dynamic where rising oil prices weigh on gold has returned.

Meanwhile, gold accumulated substantial short-term profit-taking positions after climbing to $4,166. Ahead of the Fed policy meeting, speculative funds chose to lock in profits to avoid policy uncertainty. Once prices broke key support levels, concentrated triggering of algorithmic stop-loss orders amplified downward momentum and exacerbated short-term declines.

II. Fed Rate Expectations, US Treasury Yields and US Dollar Dynamics

Data from the CME FedWatch Tool shows that as higher crude oil stokes inflation concerns, traders have continued pricing in higher odds of rate hikes. The probability of an interest rate increase at the July 30 Fed meeting has climbed to roughly 34%, while the odds of another hike in September stand near 80%. Markets are also pricing scope for additional tightening before year-end. Just one week ago, mainstream market views leaned toward steady interest rates throughout the year. Surging oil prices have completely reshaped expectations for the Fed’s policy path.

Short-dated US Treasury yields exhibited notable strength. The 2-year Treasury yield rose for six consecutive trading sessions, driving higher real interest rate expectations. Gold generates no cash flow, so rising real interest rates directly lift the opportunity cost of holding bullion, acting as a core medium-term valuation headwind. With only a few trading days remaining before the policy meeting, most funds have adopted a wait-and-see stance and avoided establishing large-scale positions ahead of major policy outcomes. Short-term long positions built during the recent rebound were unwound broadly. Market liquidity contracted amid heightened volatility, meaning modest selling pressure can trigger sharp price swings.

The US Dollar Index stabilized and rebounded, peaking above 101.45. Gold is denominated in US dollars, so dollar strength creates direct downward pressure. The dollar’s rally is no longer solely supported by US economic data. Separately, some risk-averse capital has opted to hold US dollar cash, further eroding gold’s safe-haven appeal. Markets await new forward-looking US data on employment and consumption. Persistently strong indicators would reinforce hawkish Fed expectations and cap gold’s recovery potential.

III. Global Positioning and Gold ETF Capital Flows

Looking at speculative positioning in COMEX gold futures, non-commercial long positions edged higher during the rebound, yet the scale of additions remained limited. Institutions maintained cautious bullish sentiment and held back from large-scale sustained buying. Most institutions view the $4,160–$4,260 zone as strong resistance. Without a decisive breakout, they refuse to confirm a reversal of the medium-term trend and characterize the upturn merely as a technical recovery following prior deep losses. Long funds favor short-term swing trading with brief holding cycles. Positions can be liquidated rapidly once market momentum turns.

Capital inflows into major global gold ETFs slowed markedly, and some leading funds registered modest net outflows. Large institutional allocators adopted a conservative stance: they retained long-term core holdings to hedge geopolitical risks and central bank gold purchases, while scaling back new short-term additions. Capital flows show clear divergence. Long-term allocation buyers dip-buy on steep declines, while short-term speculative investors take profits after rallies. Intensified battles between bulls and bears have boosted price volatility.

On the domestic front, short-term speculative buying on the Shanghai Gold Exchange cooled, volatility expanded for Gold T+D, and trading activity weakened. Physical markets remain divided. The pullback in raw gold prices attracted modest dip-buying interest in investment bars from retail investors, mostly small-scale purchases. Widespread bulk accumulation has not materialized and cannot deliver sustained upward support. Gold mining equities also came under pressure alongside bullion, with stock prices exhibiting stronger correlation with spot gold and greater volatility.

IV. Segmented Domestic Gold Market: Divergence Between Futures, Spot and Retail Physical Gold

AU9999 spot raw material prices on the Shanghai Gold Exchange retreated to around 882 yuan per gram. Gold T+D declined alongside the main Shanghai gold futures contract, which opened lower. The domestic-overseas premium narrowed slightly, and price differentials driven by RMB exchange rate fluctuations weakened. Domestic derivatives track overseas gold moves, though timing gaps create different volatility rhythms. Sharp overnight overseas declines usually trigger lower opening levels in the domestic morning session, followed by mild recovery on dip buying, with narrower swings than international markets.

Sharp divergence exists within the physical gold sector. While raw commodity prices trended lower, retail prices of branded gold jewellery stayed firm. Major retailers including Chow Tai Fook and Chow Sang Sang maintained quoted prices of roughly 1,258 yuan per gram for pure gold, while Laofengxiang quoted around 1,253 yuan per gram. Retail jewellery prices adjust slowly because final quotes incorporate brand premiums, manufacturing costs and store operating expenses. Short-term swings in raw material prices rarely transmit quickly to retail channels.

Investment gold bar quotes offered by banks edged lower alongside raw material prices, yet bid-ask spreads remain wide. High transaction costs limit suitability for short-term trading, and these products are more appropriate for long-term allocation. Gold recycling quotes fell in line with international prices. Retail recycling activity cooled recently, with many holders opting to wait for price rebounds before liquidating positions.

V. Summaries of Mainstream Views from Investment Banks and Institutions

The latest precious metals research note from JPMorgan states that the recent gold rebound represents a technical recovery after sharp falls. The medium-term bearish structure remains intact unless gold breaks decisively through the $4,190–$4,260 resistance zone. The $4,000 psychological level acts as the primary near-term support. A sustained break below this threshold would open further downside toward the $3,900–$3,960 range. The institution warns against blind bottom-fishing amid downward volatility. Confirmation of a trend inflection point awaits outcomes from the Fed policy meeting.

Analysts at TD Securities argue that persistently elevated oil prices keep inflation rebound risks on the table and restrict gold’s upside in the near term. Aggressive bullish positioning is discouraged, and investors should wait for the conclusion of the late-July Fed meeting to reassess gold trends after market expectations are fully priced. Oil price durability will remain a critical monitoring indicator. If Brent crude holds firmly above $100, inflation fears will persist and cap gold’s recovery scope.

Bullish institutions retain positive long-term outlooks. The core narrative of sustained gold reserve accumulation by global central banks remains unchanged. Elevated long-term geopolitical risks provide solid downside support. Dip-buying demand is expected near $4,000 during sharp sell-offs, supported by allocation-oriented institutional buying. The scope for drastic declines is limited, and prices are more likely to trade within wide ranges rather than trending steadily lower. Conditions for a persistent unilateral downtrend are not fully established.

Domestic precious metals research teams at futures houses remind investors that market expectations are highly unstable at present. News headlines can trigger violent volatility. Position sizing discipline is essential for both long and short trades. Near-term price action is governed by three interconnected drivers: interest rates, crude oil and geopolitics. A shift in any single variable can rapidly reverse short-term market momentum.

VI. Key Technical Price Levels

Spot Gold (International)

Near-term strong resistance: $4,100 and $4,166. The

$4,166 level marks the recent rebound peak and hosts heavy short-term trapped long positions. A meaningful recovery requires strong fundamental catalysts.

Core near-term support: $4,000 psychological threshold. Secondary strong supports stand at $3,980 and $3,960. A decisive break would unlock deeper losses.

Shanghai Gold Futures / Gold T+D

Resistance levels: 890 yuan and 898 yuan per gram

Support levels: 878 yuan and 872 yuan per gram

VII. Key Events to Monitor Going Forward

Real-time developments in the Middle East. Track potential new attacks by the Houthi movement, hawkish or conciliatory statements from the US and Iran, and evolving shipping risks. These will steer crude oil prices and indirectly shape inflation expectations and gold valuations.
Sustainability of international crude oil prices. Whether Brent crude can hold above $100 represents the single most important intermediate variable affecting Fed policy expectations and will continue to influence precious metals sentiment.
Upcoming US forward-looking data on employment and consumption due later this week. Stronger-than-expected prints will reinforce hawkish sentiment and pressure gold, while weak data could ease negative interest-rate headwinds.
The July 30 Federal Reserve policy meeting, interest rate dot plot and press conference with Chair Powell. This event marks the critical inflection point for gold’s near-term trajectory. All short-term capital positioning games will revolve around the meeting outcome.

VIII. Three Scenario Outlooks

Scenario 1: Further escalation of Middle East tensions and sustained high oil prices. Lingering inflation concerns keep Fed hike expectations elevated. US Treasury yields and the US dollar remain firm, weighing on gold. Traders will watch the resilience of the $4,000 support level. A break will trigger deeper corrective moves.

Scenario 2: Signs of de-escalation in geopolitical tensions and a pullback in crude oil prices. Market focus will shift back to rate-cut expectations. Lower Treasury yields could fuel a corrective recovery in gold, targeting upper resistance zones.

Scenario 3: The Fed delivers explicitly hawkish signals and retains the option of additional rate hikes within the year. Gold will likely test strong support near $3,960. If Powell strikes a dovish tone and downplays further tightening odds, gold could rebound rapidly to challenge resistance above $4,166.

Risk Disclaimer: All information above consists solely of publicly available market data compiled for reference purposes and does not constitute investment advice. Precious metals markets face extreme volatility. News flows and shifting sentiment can trigger sudden price moves. Strict position management and risk controls are essential for all trading activities.