International gold prices continue to fall, gold ETFs have generally dropped nearly 10% this year

Source: Shanghai Securities News · China Securities Journal

According to Shanghai Securities News China Securities Journal (Reporter Chen Yingqing), international gold prices have recently experienced a significant pullback. On June 26th, London spot gold fell below the $4000 per ounce threshold during trading, pulling back by over 20% from its early March high. Amid the continued weakness in gold prices, gold ETFs have also retraced, with several products dropping nearly 10% year-to-date, and the previously hot gold market is seeing a phase of cooling off.

According to data from Tonghuashun, as of market close on June 26th, the spot gold (Au99.99) price and the main gold futures contract on the Shanghai Gold Exchange hit intraday lows of 870.01 yuan/gram and 872.86 yuan/gram, respectively.

CICC released a research report stating that the recent sustained adjustment in gold prices is mainly influenced by two factors: First, the conflict between the US and Iran has driven up oil prices and inflation, raising market concerns about US inflation resilience and forming expectations for monetary tightening. Second, Federal Reserve Board member Waller’s first appearance at the June FOMC meeting was interpreted as hawkish, exacerbating concerns about tighter monetary policy. Currently, the market narrative believes the Fed’s policy focus is “containing inflation,” and the futures market has already priced in one rate hike each in 2026 and 2027 to restore dollar credibility, with the stronger dollar suppressing gold prices.

The same CICC research report further notes that heading into 2027, if there are no unexpected policy or geopolitical shocks, it is not a small probability event for US inflation to return to around 2%. Falling inflation and weakened growth will erode expectations of tightening, opening the door for the Fed to return to an easier policy stance. This gold pullback is not the end; a turning point may be near.

Looking ahead to the second half of the year, GF Futures’ research report believes that the macro-financial attributes leaning bearish are putting precious metals through a difficult moment, but a new macro narrative may emerge, including the potential rebound in monetary attributes due to renewed dollar weakness under US Treasury deficit pressure. From a monthly chart (K-line) perspective, gold’s bullish pattern remains intact, and prices are expected to find support around $3800, with a volatility range of $3800–$4800 in the second half of the year.

Editor: Zhu Henan