Nonfarm Payrolls Surprise Sends Gold Market Into Action: Gold Prices Strengthen—Is There Still Room for Hong Kong Gold Stocks to Rise?

Beijing time, July 3, 2026, the global gold market continued the strong momentum of the previous trading day. London spot gold traded around $4,177.95 per ounce, up $109.47 during the day, a gain of 2.69%, and briefly touched $4,190 per ounce. COMEX gold futures also moved higher. The direct catalyst for this round of price action was the U.S. June non-farm payrolls data released on July 2.

Data showed that the U.S. added only 57,000 non-farm jobs in June, far below the market expectation of 113,000, less than half of expectations. Meanwhile, April data was revised down from 179,000 to 148,000, and May data was revised down from 172,000 to 129,000, a total downward revision of 74,000. Although the unemployment rate fell from 4.3% to 4.2%, the main reason was that the labor force participation rate dropped to 61.5%, with a decrease in the labor force population. Structurally, the leisure and hospitality industry lost 61,000 jobs, and the previously expected World Cup boost effect was disproven.

The non-farm payrolls data was significantly weaker than expected, directly changing market pricing of the Federal Reserve's policy path. The CME FedWatch tool showed that before the non-farm data release, the market estimated a 66% probability of a rate hike before September, but after the data release, it fell sharply to around 51%; the probability of a rate hike at the July meeting plummeted from nearly 30% to below 20%. CME data showed that the probability of the Fed keeping rates unchanged in July rose to over 82%.

More critical was the statement from Federal Reserve Chairman Walsh. At the European Central Bank's Sintra Forum, Walsh struck a dovish tone, explicitly stating that since the June FOMC meeting, inflation expectations and inflation risks have both declined. However, he also warned that those expecting accommodative policy will be "disappointed" and reiterated the unwavering 2% inflation target. Goldman Sachs maintained its judgment in its latest report, expecting the Fed to keep the federal funds rate unchanged for the remainder of 2026.

The sharp decline in rate hike expectations drove the U.S. Dollar Index down 0.55% to 100.86, its largest single-day drop since April 30, and it touched an intraday low of 100.55, the lowest since June 18. Gold surged over $100 from around $4,030 per ounce within half an hour, breaking through the $4,100 mark. Spot gold eventually closed up 2.3% on July 2 at $4,123.96 per ounce. In early Asian trading on July 3, gold continued its strength, further breaking above $4,170 and touching $4,190.

From a technical perspective, gold has broken above the 5-day and 10-day simple moving averages, with the 5-day SMA crossing above the 10-day SMA, forming a golden cross that reverses the previous technical weakness. The key now is whether gold can break through the 20-day SMA ($4,150) and maintain above it. Gold has already moved above $4,150; the next resistance levels are $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 Stock Gold Sector Breaks Out Across the Board: Zijin Gold International Leads Gains

The effect of the gold price surge quickly transmitted to the Hong Kong stock market. On July 3, at the Hong Kong market open, the three major indices collectively opened higher—the Hang Seng Index rose 0.81% to 23,240.85 points; the Hang Seng Tech Index rose 0.76% to 4,487.98 points; the Hang Seng China Enterprises Index rose 0.82% to 7,674.55 points. The gold sector became the most prominent leading force of the day.

In terms of individual stocks, Zhaojin Mining (01818.HK) rose over 7% to HKD 18.7; Wanguo International Gold Group rose 7%; Lingbao Gold (03330.HK) rose over 6% to HKD 14.5; Zijin Gold International (02259.HK) rose over 6% to HKD 108.8. Shandong Gold (01787.HK) rose about 5% to HKD 18.6. On the A-share market, Zijin Mining, Shandong Gold, and Chifeng Gold also moved higher.

From the sector driving logic, the rise in Hong Kong gold stocks was not simply a "gold price follow-up" scenario, but the result of multiple factors coming together. The weaker-than-expected non-farm data implies a significantly reduced probability of further Fed rate hikes, which is a substantial positive for gold, a non-yielding asset. A weaker U.S. dollar further lowers the holding cost of dollar-denominated gold. Meanwhile, heightened concerns about the global economic outlook have repriced gold's safe-haven attributes.

However, one noteworthy signal is worth monitoring: the holdings of the world's largest gold ETF, SPDR Gold Trust, stood at 1,001.366 tons on July 2, a decrease of 3.996 tons from the previous trading day. The reduction in ETF holdings indicates that some institutional investors chose to take profits after the rapid rebound in gold prices, reflecting a cautious attitude toward the pace of short-term gains.

The Deep Logic of Gold Pricing: From Rate Hike Expectations to Structural Demand

The current pricing logic of the gold market is still primarily driven by the Federal Reserve's policy path. But if we take a longer view, gold's trajectory is also influenced by multiple structural factors.

The World Gold Council, in its mid-2026 report, provided three scenario forecasts: under the baseline scenario, gold prices will fluctuate around $4,100 per ounce, with a range of about 5% (i.e., $3,895 to $4,305); under the bullish scenario, gold could reach $4,500, and could even hit $5,000 under extremely strong signals; under the bearish scenario, attention should be paid to possible selling if gold consistently falls below $4,000. Goldman Sachs has a target price of $4,900, while UBS is more optimistic with a target of $5,200.

The World Gold Council also pointed out that aside from interest rate factors, structural demand from global central banks, institutional investors, and consumers is the foundation supporting gold's resilience. In recent years, the trend of global central banks continuously increasing gold reserves has not changed, providing long-term bottom support for gold prices. CICC Wealth Futures noted in its July 3 report that from a medium-to-long-term perspective, precious metal prices have a foundation for sustained upward movement: global geopolitical risks are rising, the restructuring of the political and economic order continues, and at the same time, U.S. fiscal pressures are intensifying, with the de-dollarization process set to continue.

From a technical perspective, after gold broke through $4,170, short-term resistance lies at $4,180 and $4,210, with further resistance at $4,240 and the $4,250 range (the upper bound of the World Gold Council range). 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 milestones include: June CPI data due on July 14—if inflation also declines, it would confirm the end of the rate hike cycle and could push gold higher; a busy period of Fed officials' speeches in mid-July; the next non-farm payrolls data on August 7; and the annual benchmark revision of employment on August 28, which could significantly revise data from the past year.

Risk and Opportunity Assessment of Hong Kong Stock Gold Sector

After a rapid rally in Hong Kong gold stocks, the most pressing question for investors is: can we still chase?

On the positive side, the cooling of Fed rate hike expectations provides macro-level support for gold. CITIC Securities noted in a July 3 report that it maintains its judgment that the Fed will keep rates unchanged for the remainder of the year, believing there is still room for the market's rate hike expectations to decline further. This means that if subsequent economic data weakens further, the market's expectations of a Fed policy shift could continue to strengthen, providing further upward momentum for gold prices and gold stocks.

On the risk side, the following aspects deserve attention:

Correction pressure from excessive short-term gains. Gold surged from a July 1 low of $3,942 to a July 3 high of $4,190, a gain of over 6% in two trading days. Short-term profit-takers may emerge, and the market could see a pullback confirmation after absorbing sentiment. Hong Kong gold stocks have rallied even more sharply, with some individual stocks gaining over 10% in two trading days, making a short-term technical correction a non-negligible risk.

Inflation stickiness remains a variable. Although non-farm data was weaker than expected, the year-on-year growth rate of hourly wages was still 3.5%, with a month-on-month increase of 0.35%, higher than the expected 0.3%. Wage stickiness has not significantly faded. If subsequent CPI data shows a slower-than-expected inflation decline, market pricing of Fed policy could reverse. Fed Chairman Walsh has clearly stated that the 2% inflation target is "unwavering," meaning any signal of above-expected inflation could trigger another revision of policy expectations.

ETF outflow signal. SPDR Gold Trust reduced holdings by 3.996 tons on July 2. Although the single-day reduction is not large, the fact that it occurred against the backdrop of a sharp gold price rally suggests that some funds are using the rebound to reduce positions. This "selling into strength" divergence signal deserves continuous monitoring.

Liquidity environment in Hong Kong market. On July 3, southbound capital net sold HKD 1.974 billion, indicating that mainland funds were flowing out during the Hong Kong market rebound. If southbound capital continues to net sell, it could constrain the overall valuation recovery of Hong Kong stocks, and the gold sector would not be immune.

Valuation position of Zijin Gold International. Zijin Gold International (02259.HK) closed at HKD 108.8 on July 3, with a P/E ratio of about 20x. Compared to the 30-day average price of HKD 109.952, the current stock price is near the short-term average. Relative to the institutional forecast high of HKD 282.844 and low of HKD 214.963, the current price remains in a relatively low range, but after the rapid short-term surge, attention should be paid to correction risk.

Conclusion

Gold's return to $4,177 and the collective surge in Hong Kong gold stocks are essentially a concentrated repricing of the market's expectations regarding the Fed's policy path. The June non-farm payrolls data was significantly weaker than expected, coupled with the dovish remarks from Fed Chairman Walsh, which together formed the basic logic for gold bulls. According to the World Gold Council's baseline scenario, $4,100 is the central level for gold, not a top. The subsequent direction depends on further signals from inflation data, labor market developments, and Fed policy communication.

For the Hong Kong stock gold sector, technical correction risks should be watched after the rapid short-term rise, but over the medium term, if the Fed's rate hike cycle is indeed nearing its end, there is still room for gold stocks' valuation recovery. Investors should closely monitor the July 14 CPI data, subsequent statements from Fed officials, and changes in gold ETF holdings, as these variables will determine the sustainability and height of this gold market rally. Gate.io will also continue to track gold and Hong Kong stock market developments, providing timely, professional data and analysis for investors.

FAQ

Q: What was the main reason for gold prices breaking above $4,177?

The U.S. June non-farm payrolls data was significantly weaker than expected, adding only 57,000 jobs, far below the market expectation of 113,000, and the previous two months' data were revised down by a total of 74,000. After the data release, market expectations for Fed rate hikes plunged, the U.S. Dollar Index fell below 101, and gold surged over $100 from around $4,030 within half an hour. Fed Chairman Walsh struck a dovish tone, stating that inflation risks have declined, further strengthening the upward logic for gold.

Q: Why did Hong Kong gold stocks surge so sharply in tandem?

Hong Kong gold stocks typically have high elasticity to gold prices because gold producers' profits are directly linked to gold prices. For every certain percentage increase in gold prices, the profit expectations of gold mining companies can amplify by a higher multiple. On July 3 at the Hong Kong market open, Zhaojin Mining rose over 7%, and Zijin Gold International rose over 6% to HKD 108.8, reflecting strong expectations of improved profitability for gold companies.

Q: Is it risky to buy Hong Kong gold stocks now?

Short-term risks cannot be ignored. Gold has risen about $248 from a July 1 low of $3,942 to a July 3 high of $4,190, and Hong Kong gold stocks have risen even more, with short-term profit-takers facing pressure to take profits. Additionally, SPDR Gold ETF reduced holdings by 3.996 tons on July 2, indicating some institutions are reducing positions. Zijin Gold International's current stock price of HKD 108.8 is near its 30-day average of HKD 109.952. Investors should watch for pullback risk and subsequent inflation data.

Q: What are the key variables for gold's subsequent trajectory?

The most critical is the June CPI data due on July 14—if inflation also declines, it would confirm the end of the rate hike cycle and could push gold higher. Other factors include subsequent speeches by Fed officials, the August 7 non-farm payrolls data, and the annual benchmark revision of employment on August 28. Technically, gold's next resistance levels are $4,180, $4,210, and $4,240. The World Gold Council's baseline forecast is gold fluctuating around $4,100 with a 5% range.

Q: Will the Fed actually raise rates in July?

CME FedWatch tool data shows that after the non-farm data release, the probability of a rate hike at the July meeting plummeted from nearly 30% to below 20%. The probability of the Fed keeping rates unchanged in July rose to over 82%. Institutions like CITIC Securities maintain their judgment that the Fed will keep rates unchanged for the remainder of the year. The possibility of a July rate hike has significantly decreased, but year-on-year hourly wage growth remains at 3.5%, implying that inflation stickiness means the rate hike window is not completely closed.