Gold market review and key insights: Last week, spot gold in London closed at $4,041 per ounce (a weekly decrease of 0.3%), while domestic AU9999 gold closed at 885 yuan per gram (a weekly increase of 0.5%). The Federal Reserve held interest rates steady at its July meeting, but internal divisions intensified. The decision to maintain the federal funds rate target range at 3.50%-3.75% was passed by a 9-3 vote. Three regional Fed presidents dissented, advocating for a 25-basis-point rate hike — marking the first time since 2016 that the Fed has seen three unanimous dissenting votes in a single decision.
During his press conference, Chairperson Walsh maintained a hawkish tone but introduced a nuanced narrative by stating that "the market has already done much of the work for the Fed." On the inflation target, Walsh was firm: "There is only one goal, and that is 2%." He also emphasized that the Fed would not rely on single-month data for decisions, noting that the June CPI cooling was not the core reason for holding rates steady, and policy is based on long-term inflation trends. Regarding financial conditions, Walsh offered a key assessment. He pointed out that after the June FOMC meeting removed forward guidance, the market's real-time reaction to economic data led to one of the most significant increases in US Treasury yields in the past two decades. The spontaneous rise in market rates has substantially tightened financial conditions. This assessment became the core argument for the "no rate hike now" stance, as the market had already completed part of the tightening work for the Fed.
The market reaction to the July FOMC meeting showed a significant divergence between short-term and long-term yields. On the short end, with interest rate futures pricing in about a 40% chance of a rate hike before the meeting, the absence of a hike led the market to trade on "loose monetary policy," with expectations for a rate hike within the year declining. However, long-term US Treasury yields trended upward. The steepening of the yield curve may indicate growing market concerns about future inflation, as well as deep-seated unease about the Fed's credibility.
For the gold market, the short-term dovish interpretation of the meeting provides a respite window for gold prices. Concerns about the Fed's independence and credibility may prompt the market to embrace gold once again. Meanwhile, the recent de-escalation of tensions between the US and Iran has driven oil prices lower, leaving room for previously overly pessimistic rate hike expectations to decline further. Continued attention must be paid to US economic data for July and August. If nonfarm payrolls continue to weaken and inflation continues to cool, the market's pricing of rate hikes will be further revised downward. In the medium to long term, the structural factors supporting gold — global central bank gold purchases, reserve structure rebalancing, and US fiscal pressures — remain unchanged despite short-term fluctuations. The correction of overly pessimistic short-term expectations and the continuation of long-term logic are expected to support gold prices.
Key signals for gold investment in the coming week: (1) US July nonfarm payrolls data; (2) Developments in the US-Iran situation. Related products: Gold ETF HuaAn (518880)/Connect A (000216)/Connect C (000217), Gold Stock ETF HuaAn (159321). Comparison of RMB-denominated gold and international gold prices: Source: Wind, HuaAn Fund, as of July 31, 2026.
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