[Bearish Precious Metals]
US Treasuries and the US dollar stayed high, with opportunity cost pressure still present.
Currently, US Treasury yields remained overall in a high range, with the 10-year yield trading around 4.4%-4.5%, and real interest rates staying high continued to raise the holding cost of precious metals. Meanwhile, the US dollar index was still at relatively strong levels, weighing on precious metals passively, forming a dual pressure pattern of "rising yields + stronger dollar," capping short-term upside room.
Institutional capital continued to flow out, with the trend of ETF reduction not yet reversed.
Global gold ETFs sustained a net outflow trend, with holdings of the leading SPDR Gold ETF continuing to pull back, and onshore gold ETFs in China also facing persistent redemption pressure. The absence of incremental institutional buying resulted in a lack of rebound momentum in futures, with each rally facing concentrated selling from previously trapped longs taking profits, and the trend-like rally lacking capital support.
Tighter trading rules combined with a consumption off-season leave short-term support weak.
Starting July 2, the SHFE raised the trading margin requirement for SHFE gold futures to 16% and widened the daily price limit to 14%. In the short term, high-leverage speculative funds reduced leverage and exited, leading to a marginal contraction in market liquidity. At the same time, the current June–August period is the traditional off-season for global gold jewelry consumption, and during price declines, insufficient buying interest is prone to amplifying fluctuations.
[Bullish Precious Metals]
Waller confirmed cooling inflation, with tightening expectations marginally easing.
In a public speech in Sintra on Wednesday evening, Waller explicitly stated that “US inflation upside risks have eased somewhat over the past four weeks.” This comment directly eased market concerns about persistent inflation stickiness, and precious metals prices rose during the speech. Overall market rate hike expectations cooled, providing fundamental support for valuation recovery in precious metals and serving as the core bullish driver in the short term.
US June ADP employment missed expectations, sending signals of a cooling labor market.
US private-sector employment rose by 98,000 in June according to ADP, below the market expectation of 118,000, the smallest increase since March, with the previous month revised down to 122,000. The data showed that job seekers’ search periods are lengthening and the pace of job creation is slowing. The cooling labor market will gradually feed into wage growth and core services inflation, weakening the US Fed’s core rationale for maintaining tight policy and raising rates.
The US June ISM Manufacturing PMI overall fell short of market expectations.
The data overall showed a combination of “slower expansion + rapid cost cooling.” The Prices Paid index for manufacturing dropped sharply by 9.1 points to 73, the largest monthly decline since July 2022, with the pace of raw material cost increases slowing significantly. Inflationary pressures on industrial products have rapidly released, reinforcing the certainty of the inflation decline and creating room for the US Fed to pivot policy.
[Macro Summary]
Currently, the June ADP and PMI data fell short of expectations, releasing signals of cooling employment and inflation. Coupled with Warsh confirming on Wednesday evening that inflation has moderated, market expectations for US Fed rate hikes have shown a marginal pullback. This week's remaining key data window is the June non-farm payrolls report and the weekly initial jobless claims data. The results will directly verify the sustainability of the cooling trend and determine the extent of correction in rate hike expectations.
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