Wednesday was a dramatic session for the global gold market. Weak U.S. employment data, Federal Reserve Chair Waller's remarks that inflation risks are easing, and progress in indirect U.S.-Iran negotiations in Doha combined to pull gold back from the brink.

During the first half of the year, the outbreak of the U.S.-Iran conflict drove safe-haven demand, pushing gold prices to record highs. However, as tensions eased and oil prices retreated sharply, the market's focus quickly shifted to more fundamental issues—namely inflation and interest rates. Investors have become increasingly concerned that, despite lower energy prices, the resilience of the U.S. economy and sticky inflation could force the Federal Reserve to keep interest rates higher for longer, or even resume rate hikes later this year. For a non-yielding asset such as gold, expectations of higher interest rates are undoubtedly a major headwind. Against this backdrop, capital continued to flow out of gold ETFs, while short-term speculative sentiment remained extremely subdued.

As gold prices rebounded following the economic data release and policy comments, geopolitical developments also played an important supporting role. According to media reports, indirect talks between the United States and Iran in Doha, Qatar, delivered encouraging signals. The two sides reportedly reached a preliminary agreement to release US$3 billion in funds to Iran. Meanwhile, discussions are ongoing regarding a new proposal put forward by Oman concerning the Strait of Hormuz. U.S. President Donald Trump and Vice President J.D. Vance both stated that the negotiations were progressing well.

Meanwhile, the ADP National Employment Report—often referred to as the "little Nonfarm Payrolls"—was released ahead of the official payrolls data and significantly surprised the market. The report showed that the U.S. private sector added just 98,000 jobs in June. This figure was not only lower than May's confirmed increase of 122,000 jobs, but also below economists' forecast of 118,000, marking the smallest monthly gain since March.

The weaker employment data provided the first wave of support for gold. Following the release, U.S. Treasury yields retreated from their intraday highs, directly benefiting the non-yielding precious metal. Gold quickly stabilized and began another push toward the US$4,000 level.

Waller also stated that expectations for future inflation have declined over the past four weeks and that inflation risks have eased. He further noted that the agreement aimed at ending the Iran conflict had pushed energy prices lower, improving the near-term inflation outlook. These remarks carried significant weight for the market. Although Waller reiterated the Federal Reserve's commitment to bringing inflation back to its 2% target and declined to comment on whether the Fed would raise rates this month, the market interpreted his remarks about easing inflation risks as dovish. More importantly, his comments directly pushed U.S. Treasury yields lower from their intraday highs. The decline in yields substantially reduced the opportunity cost of holding gold, becoming the immediate catalyst for the rally.

Market Insight:

On the 4-hour chart, gold staged a strong rebound, with both the MACD lines and histogram expanding near the zero axis. Reclaiming the US$4,000 level is only the first step. With the Federal Reserve's policy path still highly uncertain and the U.S. Nonfarm Payrolls report about to be released, the real test for the gold market is only just beginning.