During Asian trading on August 6, precious metals extended the overnight surge. London spot gold re-claimed the $4,300/oz level in early trading for the first time since June 18, while COMEX gold futures briefly broke above $4,360. In the previous session (August 5), spot gold soared 4.16% to $4,247.17/oz, its biggest one-day gain in recent times; spot silver jumped 4.26% to close at $62.035/oz. Around 10 a.m. Beijing time on August 6, spot gold was quoted at $4,300.57/oz, up about 1.27% on the day, with bullish sentiment clearly heating up.
Three Tailwinds Align: From ADP Miss to Reversal of Rate-Hike Bets
The direct trigger for the sharp gold rally was a marginal reversal in macro data and policy expectations. U.S. July ADP private payrolls rose by just 44,000, far below the 70,000 expected and sharply down from the prior 98,000—the smallest gain since January. The unexpectedly weak jobs data reinforced signs of cooling in the U.S. labor market, loosening bets on a Fed rate hike in September. CME's FedWatch tool showed the probability of holding rates steady in September had risen to about 45%, while hike odds fell significantly from elevated levels.
Meanwhile, U.S. Treasury Secretary Bessent said publicly on August 5 that the Fed did not need to hike rates, further dampening tightening expectations. On the news front, talks between the U.S. and Iran over reopening the Strait of Hormuz made positive progress, international oil prices fell sharply, easing concerns that energy would stoke inflation and further weakening the case for monetary tightening. Lower rate expectations dragged the dollar index and Treasury yields down together, lowering the opportunity cost of holding gold. With the market previously crowded in pricing hawkish policy, short covering, trend-following inflows, and allocation money returning all overlapped after the data, pushing gold up well beyond what conventional models could explain. Analysts generally believe this rebound is not driven by a single data point but by the convergence of four forces: macro expectations, geopolitical situation, capital flows, and central bank allocation.
Central Bank Buying Builds Floor: Q2 Net Purchases of 289 Tons Set Record for the Quarter
If short-term data are the catalyst for the market, central bank gold buying is the ballast for gold's medium-to-long-term pricing. According to the World Gold Council's latest data, global central banks and official institutions added a net 289 tons of gold reserves in Q2 2026, up 62% year on year—the strongest second quarter on record. Poland led with 51 tons purchased, lifting reserves to 632 tons; China added 33 tons in Q2, continuing its long-term allocation pace. Notably, the Bank of Korea resumed gold purchases after a 13-year hiatus—limited in size but highly symbolic—as some emerging economies long absent from the gold market also reassess gold's role in foreign reserves.
Data released by the China Gold Association on August 6 showed China added 40.12 tons of gold in H1 2026, lifting reserves to 2,346.45 tons by end-June, fifth globally; China has now increased gold for 20 consecutive months since November 2024. Goldman Sachs commodity research named re-entry of Chinese capital as the most important immediate trigger for this rally: SHFE gold open interest rose by about 19,000 lots in a day, up roughly 6%, the most significant one-day build in three years; Huaan Gold ETF saw net inflows for 16 straight trading days totaling about 6.041 billion yuan. Central bank buying and institutional flows form a dual long-term and short-term support—the key reason the area around $4,000/oz is seen as the major bottom for this leg.
Vietnam Gold Market: SJC Gold Bars Top 143 Million Dong
The global gold surge quickly passed through to Vietnam's domestic market. In early trading on August 6, Saigon Jewelry Company (SJC) raised its gold bar quotes to 140.3 million dong/tael buy and 143.3 million dong/tael sell, up 1.5 million dong from the previous close, the highest since July 22; SJC gold rings were raised by 1.4 million dong to 139.7-142.7 million dong/tael, Phu Quy gold rings were quoted at 140.3-143.3 million dong/tael, and DOJI gold rings hit the market ceiling at 140-144 million dong/tael. Converted at the State Bank of Vietnam's listed exchange rate, the international gold price equals about 137 million dong per ounce, and the gap between domestic and international prices remains a focus for investors.
China's market also saw collective jumps in retail gold jewelry prices. On August 6, Laomiao Gold's pure gold jewelry was quoted at 1,299 yuan/gram, up 63 yuan in a day; Chow Sang Sang at 1,295 yuan/gram, up 58 yuan; Lao Feng Xiang at 1,293 yuan/gram, up 56 yuan. Physical gold consumers reacted extremely quickly to price signals, reflecting rising retail expectations that gold has returned to an uptrend.
Silver's Elasticity Shows: Gold/Silver Ratio Falls Below Long-Term Average
After gold's directional breakout, bullish sentiment in precious metals is spreading to silver. Silver has dual characteristics as both a precious and industrial metal; when the dollar weakens and real-rate expectations fall, its price elasticity is usually higher than gold's. On August 5, London spot silver surged 4.26% to $62.035/oz, and on August 6 it moved further above $62; the main Shanghai silver futures contract rose 3.72% to 15,260 yuan/kg. UBS noted that the silver market continues to face supply-demand deficits, and falling exchange inventories make prices more sensitive to new investment demand, so concentrated inflows could amplify gains. Standard Chartered, however, warned that the gold/silver ratio has fallen below its long-term average, narrowing silver's valuation advantage over gold—high elasticity often brings high volatility, and investors should be alert to rapid reversal risks. If global manufacturing expectations improve, industrial silver demand from electronics, power grids, data centers, and autos could provide additional fundamental support.
Outlook: $4,000 Forms a Bottom, $4,500 Is Key Resistance
Looking ahead, institutions generally remain optimistic about gold's medium-to-long-term trend. CITIC Securities' macro asset team believes gold remains in the bull market that began in 2015; the three long-term drivers—rising U.S. federal deficits, persistent geopolitical frictions, and sustained central bank buying—have not changed. The recent decline is only a temporary correction within a bull market; $4,000/oz is likely the bottom area for this leg, and gold could resume its uptrend within the year. Goldman Sachs and UBS forecast short-term gold at $4,900/oz and $5,200/oz respectively, while JPMorgan maintains a year-end target of $6,000/oz.
However, some institutions caution short-term risks. The World Gold Council expects gold to likely fluctuate around $4,100/oz for the rest of the year absent a major geopolitical shock; if geopolitical risks intensify or the global economy deteriorates, a new trend rally could easily begin. Technically, $4,300 is the bull-bear dividing line; above it, $4,500 is the key resistance to watch next. Below, the $4,000 area has formed strong capital and allocation support and can be regarded as the key bottom observation zone for this correction.
On positioning, analysts advise investors to avoid chasing short-term sentiment. After the sharp rally, gold may digest gains through consolidation or a pullback, but as long as it holds the key breakout zone, any correction is more likely a technical confirmation after the rise than a reversal of the medium-to-long-term logic. For medium-to-long-term allocation funds, build positions gradually during consolidation and pullbacks; trend-following traders should wait for confirmation of key support or a decisive break of the $4,500 resistance before chasing. Next, the U.S. July nonfarm payrolls, policy signals from the August Jackson Hole global central bank symposium, and global central bank buying and gold ETF flows will be key variables in judging whether this rebound can turn into a trend.
