Historical patterns suggest a clear transmission mechanism: weak employment data leads to cooling interest rate hike expectations, followed by a decline in U.S. Treasury yields, ultimately driving gold prices higher. The current rebound in gold appears to be following this well-established logic.

The significantly weaker-than-expected U.S. June non-farm payrolls data has triggered a substantial market reassessment of the Federal Reserve's future interest rate path. This has led to a simultaneous retreat in the U.S. dollar index and Treasury yields, significantly reducing the opportunity cost of holding gold. Consequently, international gold prices have embarked on a three-session winning streak. COMEX gold futures, rebounding from around $4000, closed at $4209 on July 5th, successfully breaching the key $4200 psychological level and ending a four-week consecutive decline.

Macro Environment Sees Marginal Improvement Following Data Revision

The U.S. June jobs report fell notably short of market forecasts, indicating clear signs of cooling in the labor market. Market pricing for the Fed's subsequent rate hikes has undergone a significant adjustment, resulting in a weaker dollar and lower 10-year Treasury yields. Both factors have decreased the cost of holding gold. Concurrently, a moderation in Middle East geopolitical tensions and a phase of declining international oil prices have alleviated upward pressure on inflation. The confluence of these multiple macro tailwinds has created a window for a tactical revaluation in gold. Historically, the chain reaction from soft jobs data to lower rate hike expectations, falling bond yields, and rising gold prices is evident, making the logic behind this rebound quite straightforward.

Short-Term Rebound Faces Uncertainty, Mid-Term Trend Awaits Inflation Data

While the non-farm payrolls data has opened up space for a short-term valuation recovery in gold, the Fed's overarching hawkish policy stance has not fundamentally shifted. The sustainability of the rally following the breach of $4200 remains to be tested. The market is currently in a data lull, which could lead to increased volatility. Upcoming inflation data and Fed meeting minutes will be crucial variables in confirming the strength of the trend. From a medium-term perspective, gold, supported by a solid foundation from sustained central bank purchases, is likely to continue trading within a wide range. A decisive breakout from this pattern still requires greater clarity on inflation data and the Fed's policy trajectory.

Sustained Central Bank Buying and De-Dollarization Offer Long-Term Support

The recent deep correction of nearly 30% from gold's highs has substantially enhanced its medium- to long-term investment appeal. The price range between $4100 and $4200 is suitable for building a medium-term core position in a phased manner. Over the longer term, three key structural pillars remain intact: persistent central bank gold purchases globally, the deepening trend of de-dollarization, and the debt monetization practices of major economies. Data from the World Gold Council shows that global central bank gold purchases exceeded 1000 tonnes for the third consecutive year in 2025, solidifying this demand as the most significant structural support for gold prices. From an allocation standpoint, the focus should be on long-term value, adhering to a disciplined, phased accumulation strategy. Investors are advised to look beyond short-term data and price fluctuations, using significant market pullbacks as opportunities to build core positions.