On July 3, 2026 (Beijing time), the global gold market continued its strong momentum from the previous trading day. London spot gold traded near $4,177.95 per ounce, up $109.47 on the day—a 2.69% increase—with intraday highs reaching $4,190 per ounce. COMEX gold futures also moved higher. The immediate catalyst for this rally was the release of the US June nonfarm payroll data on July 2.
The data showed that the US added only 57,000 nonfarm jobs in June, far below the market expectation of 113,000—less than half the forecast. Meanwhile, April’s figures were revised down from 179,000 to 148,000, and May’s from 172,000 to 129,000, for a combined downward revision of 74,000 jobs. The unemployment rate dropped from 4.3% to 4.2%, but this was mainly due to the labor force participation rate falling to 61.5%, indicating a shrinking workforce. Structurally, the leisure and hospitality sector lost 61,000 jobs, disproving previous expectations that the World Cup would boost employment.
The sharply weaker nonfarm data immediately changed market pricing for the Federal Reserve’s policy path. According to the CME FedWatch tool, before the data release, markets saw a 66% chance of a rate hike before September. After the report, that probability plunged to around 51%. The likelihood of a July rate hike dropped from nearly 30% to below 20%. CME data shows the probability of the Fed holding rates steady in July has risen to over 82%.
More crucially, Fed Chair Walsh’s remarks at the ECB Sintra Forum signaled a dovish tilt. He stated clearly that since the June FOMC meeting, both inflation expectations and inflation risks have declined. However, he also cautioned those anticipating looser policy will "be disappointed," and reiterated the unwavering 2% inflation target. Goldman Sachs, in its latest report, maintains its view that the Fed will keep the federal funds rate unchanged for the remainder of 2026.
The drop in rate hike expectations triggered a sharp sell-off in the US dollar index, which fell 0.55% to 100.86—the largest single-day decline since April 30—with an intraday low of 100.55, the weakest since June 18. Gold surged more than $100 within half an hour from around $4,030 per ounce, breaking above the $4,100 level. Spot gold closed up 2.3% on July 2, at $4,123.96 per ounce. In early Asian trading on July 3, gold extended its strength, breaking through $4,170 and touching $4,190.
From a technical perspective, gold has broken above both the 5-day and 10-day simple moving averages (SMA). The 5-day SMA crossed above the 10-day SMA, forming a golden cross and reversing the previous bearish pattern. The key now is whether gold can break above the 20-day SMA ($4,150) and sustain momentum above it. Gold is currently trading above $4,150, with the next resistance levels at $4,180, $4,210, and $4,240. On the support side, $4,100 has shifted from resistance to support, followed by $4,070, $4,040, and $4,010.
Hong Kong Gold Stocks Surge Across the Board: Zijin Gold International Leads Gains
The surge in gold prices quickly spread to the Hong Kong stock market. At the July 3 opening, all three major indices jumped—Hang Seng Index up 0.81% at 23,240.85 points; Hang Seng Tech Index up 0.76% at 4,487.98 points; China Enterprises Index up 0.82% at 7,674.55 points. The gold sector stood out as the day’s leading performer.
Among individual stocks, Zhaojin Mining (01818.HK) soared over 7% to HK$18.7; Wanguo Gold Group rose 7%; Lingbao Gold (03330.HK) gained more than 6% to HK$14.5; Zijin Gold International (02259.HK) climbed over 6% to HK$108.8. Shandong Gold (01787.HK) advanced about 5% to HK$18.6. On the A-share market, Zijin Mining, Shandong Gold, and Chifeng Gold also moved higher.
Looking at sector drivers, the rally in Hong Kong gold stocks is not simply a case of "tracking gold prices," but rather the result of multiple factors. Weaker-than-expected nonfarm data means the probability of further Fed rate hikes has dropped sharply, which is a substantial positive for gold, a non-yielding asset. A weaker dollar further lowers the holding cost of dollar-denominated gold. Additionally, rising concerns about the global economic outlook have renewed gold’s appeal as a safe haven.
However, there’s a noteworthy signal: the world’s largest gold ETF—SPDR Gold Trust—reported holdings of 1,001.366 tons on July 2, down 3.996 tons from the previous trading day. The reduction in ETF holdings indicates some institutional investors took profits after gold’s rapid rebound, reflecting a cautious attitude toward the swift short-term gains.
The Deeper Logic Behind Gold Pricing: From Rate Expectations to Structural Demand
Currently, gold pricing is still mainly driven by the Fed’s policy trajectory. But in a broader context, gold’s movement is influenced by multiple structural factors.
The World Gold Council’s mid-2026 report outlines three scenarios: In the base case, gold will fluctuate near $4,100 per ounce, with a range of about 5% ($3,895–$4,305). In the bullish scenario, gold could reach $4,500, and in an extremely strong market, even $5,000. In the bearish scenario, sustained prices below $4,000 could trigger sell-offs. Goldman Sachs targets $4,900, while UBS is even more optimistic at $5,200.
The World Gold Council also notes that beyond interest rates, structural demand from global central banks, institutional investors, and consumers is the foundation of gold’s resilience. In recent years, central banks worldwide have continued to increase their gold reserves, providing long-term support for prices. According to a July 3 report from CICC Wealth Futures, precious metals have a solid basis for continued price increases in the medium to long term: global geopolitical risks are rising, political and economic order is being reshaped, US fiscal pressures are intensifying, and the process of de-dollarization is ongoing.
Technically, after breaking above $4,170, gold faces short-term resistance at $4,180 and $4,210, with further resistance at $4,240–$4,250 (the upper range from the World Gold Council). On the support side, $4,150 (20-day SMA) has shifted from resistance to key support, followed by $4,100, $4,070, and $4,040.
Key upcoming dates include: the June CPI data release on July 14—if inflation falls in tandem, it will confirm the end of the rate hike cycle and could drive gold higher; a flurry of Fed official speeches in mid-July; the next nonfarm payroll report on August 7; and the annual employment benchmark revision on August 28, which may significantly revise data from the past year.
Risk and Opportunity Assessment for Hong Kong Gold Stocks
After a rapid rally in Hong Kong gold stocks, the question most on investors’ minds is: Is it still worth chasing?
On the positive side, cooling Fed rate hike expectations provide macro support for gold. CITIC Securities’ July 3 report maintains its view that the Fed will keep rates unchanged this year, noting further downside for rate hike expectations. If subsequent economic data weakens further, expectations for a policy shift could strengthen, providing more upside for gold prices and gold stocks.
On the risk side, several factors warrant attention:
Pressure from rapid short-term gains. Gold jumped from a July 1 low of $3,942 to a July 3 high of $4,190, a gain of more than 6% in two trading days. Short-term profit-taking could lead to a pullback as the market digests these moves. Hong Kong gold stocks surged even more, with some names up over 10% in two days. The probability of a technical correction in the near term should not be ignored.
Inflation stickiness remains a variable. Although nonfarm data was weak, average hourly earnings rose 3.5% year-over-year and 0.35% month-over-month, beating the 0.3% forecast. Wage stickiness hasn’t eased significantly. If upcoming CPI data shows inflation falling slower than expected, market pricing for Fed policy may fluctuate. Fed Chair Walsh has made it clear the 2% inflation target is "non-negotiable," so any upside surprise in inflation could trigger another shift in policy expectations.
ETF outflow signals. SPDR Gold Trust reduced holdings by 3.996 tons on July 2. While the daily reduction is small, it occurred amid a sharp gold rally, indicating some funds are using the rebound to trim positions. This "selling into strength" divergence warrants ongoing attention.
Liquidity conditions in the Hong Kong market. On July 3, southbound capital saw a net outflow of HK$1.974 billion, indicating mainland funds were exiting as Hong Kong stocks rebounded. Continued net outflows could limit overall valuation recovery in Hong Kong stocks, and the gold sector may not be immune.
Valuation of Zijin Gold International. Zijin Gold International (02259.HK) closed at HK$108.8 on July 3, with a PE ratio around 20x. The 30-day average price is HK$109.952, so the current price is near the short-term average. Compared to the highest forecast price of HK$282.844 and lowest forecast price of HK$214.963 from institutions, the current price remains in the lower range, but after a rapid short-term rise, investors should watch for pullback risk.
Conclusion
Gold’s return to $4,177 and the collective surge in Hong Kong gold stocks fundamentally reflect a concentrated repricing of the Fed’s policy path. June’s nonfarm data was much weaker than expected, combined with Fed Chair Walsh’s dovish tone, forming the basis for gold bulls. According to the World Gold Council’s base scenario, $4,100 is the central price for gold—not the peak. The next moves will depend on inflation data, labor market developments, and further signals from Fed communications.
For Hong Kong gold stocks, after a rapid short-term rally, technical correction risk is worth watching. But in the medium term, if the Fed’s rate hike cycle is indeed nearing its end, there’s still room for valuation recovery in gold stocks. Investors should closely monitor the July 14 CPI release, subsequent Fed statements, and changes in gold ETF holdings. These variables will determine the sustainability and magnitude of this gold rally. Gate will continue to track gold and Hong Kong market dynamics, providing timely and professional data and analysis for investors.
FAQ
Q: What is the main reason for gold breaking above $4,177?
US June nonfarm payroll data was much weaker than expected, with only 57,000 new jobs—far below the forecast of 113,000. The previous two months were revised down by a combined 74,000. After the data release, expectations for Fed rate hikes dropped sharply, the dollar index fell below 101, and gold surged more than $100 within half an hour from around $4,030. Fed Chair Walsh signaled a dovish stance, saying inflation risks have declined, further strengthening the bullish logic for gold.
Q: Why did Hong Kong gold stocks rally so strongly?
Hong Kong gold stocks are highly sensitive to gold prices, as miners’ profits are directly tied to price levels. Every move up in gold prices amplifies earnings expectations for gold mining companies. At the July 3 opening, Zhaojin Mining jumped over 7%, Zijin Gold International rose more than 6% to HK$108.8, reflecting strong market expectations for improved profitability among gold producers.
Q: Is it risky to buy Hong Kong gold stocks now?
Short-term risks shouldn’t be ignored. Gold has already risen about $248 from the July 1 low of $3,942 to the July 3 high of $4,190, with Hong Kong gold stocks posting even larger gains. There’s pressure for short-term profit-taking. Additionally, SPDR Gold ETF reduced holdings by 3.996 tons on July 2, showing some institutions are trimming positions. Zijin Gold International’s current price of HK$108.8 is near the 30-day average of HK$109.952. Investors should be mindful of pullback risks and upcoming inflation data.
Q: What are the key variables for gold’s next move?
The most important is the June CPI data release on July 14—if inflation falls in tandem, it will confirm the end of the rate hike cycle and could drive gold higher. Other variables include upcoming Fed speeches, the August 7 nonfarm payroll report, and the August 28 annual employment benchmark revision. Technically, gold’s next resistance levels are $4,180, $4,210, and $4,240. The World Gold Council’s base forecast sees gold fluctuating around $4,100, within a 5% range.
Q: Will the Fed raise rates in July?
CME FedWatch data shows that after the nonfarm report, the probability of a July rate hike has dropped from nearly 30% to below 20%. The chance of the Fed holding rates steady in July has risen to over 82%. Institutions like CITIC Securities maintain their view that the Fed will keep rates unchanged this year. The likelihood of a July hike is much lower, but average hourly earnings are still up 3.5% year-over-year, and inflation stickiness means the rate hike window isn’t fully closed.
