Gold fell last week following the strong US Job's report


Gold price behaviour:

  • Gold fell last week, after a six-week rally (LBMA -1.0%, XAU -0.6%). 
  • This occurred primarily on Friday, driven by a strong US Job’s report that drove the probability of a July 50bps cut from 25% to 0%, as well as a surprise increase in India’s tax duty to 12.5% from 10%.

Fed rate cut probability


Source: Bloomberg


Volume and Liquidity:

  • Gold trading volumes continued to increase meaningfully to start the month with last week’s average at $184bn a day. The June average was $169bn vs YTD average of $115bn.
  • Interestingly, the Shanghai Futures Exchange volume increased significantly, with daily volumes at $14.5bn, well above the YTD average of $5.8bn; we recently highlighted Chinese investment behaviour in a blog.


  • The gold price rally finally paused, which was expected given the extremely overbought conditions. 
  • The gold price could be forming a bullish flag, which if confirmed would project the price of gold to approximately $1,550.



  • Realized volatility caught up to implied volatility as 30-day realized volatility is at the highest levels since 2016.


30-day gold realized volatility


Source: Bloomberg


ETF Flows:

  • July began with small global inflows of $72mn, all from North America. 
  • Global inflows are $5.1bn on the year, led by European funds, that have added $4bn or 78% of global net inflows. 
  • We will be releasing the June ETF flows report on Tuesday, at 8am EST.