This week, the gold price has rebounded somewhat. Although the spot price of gold in London slightly declined on Thursday, it ended the significant weakening trend of last week and recaptured the ground lost at $3,300 per ounce. Domestic AU9999 also rose by 0.52% to above 774 yuan per gram. Overall, it is in an upward range with fluctuations.

Why does the gold price keep fluctuating?

For most of the first half of this year, the geopolitical situation was volatile, and the tariff issue also led to a significant increase in the demand for safe-haven assets, causing the gold price to rise rapidly. The maximum increase of AU9999 in the first half of the year exceeded 30%.

However, as the geopolitical situation and tariff issues have eased, the demand for safe-haven assets has cooled down, thus leading to an adjustment in gold prices.

In a word, it has risen too much and there is no new driving force, so it needs to catch its breath.

What should be paid attention to in the near future?

The first is the Big and Beautiful Act of the United States. On Tuesday local time, the US Senate voted to pass the “Big and Beautiful” tax and spending bill, which will be sent to the House of Representatives. The “Big and Beautiful” bill is a large-scale tax and spending bill promoted by Trump, aiming to continue his 2017 tax cut policy, while reducing social welfare and green energy subsidies and increasing defense and border security spending.

According to the Trump administration’s plan, if the “Big and Beautiful” bill is eventually enacted, it will create a fiscal deficit of at least 2.8 trillion US dollars, which may become a long-term rigid support for the value center of gold prices.

The second is the non-farm payroll data. Due to the influence of the US Independence Day holiday, the US June non-farm payroll report was released earlier tonight (Thursday, July 3rd). If the data is not good, it may trigger a rise in expectations of interest rate cuts, which is beneficial to gold prices.

It should be noted that the ADP employment figures released in the United States yesterday fell short of expectations, and the expectation of the Federal Reserve cutting interest rates in July has risen, which has also driven the gold price to perform strongly.

The third point is the progress of tariff negotiations. With the 90-day tariff suspension period set to end on July 9, 2025, key negotiations have entered their final stage. Recently, the United States has successively reached agreements with China, the United Kingdom, Vietnam and other countries. However, in the long term, tariffs are not only used by the United States as an economic tool, but also as a means to contain rivals and restructure the global value chain. The uncertainties they bring may persist for a long time or continue to push up market demand for gold, driving up the gold price.