A Tale of Two Extremes! The Triple Game in Gold Market Amid Middle East Tensions and Nonfarm Payrolls Countdown
On July 1, 2025, the gold market presented a unique picture of "a tale of two extremes." Under the dual influence of volatile Middle East tensions and the countdown to the Nonfarm Payrolls (NFP) data release, the gold market harbored a triple game, with its price movements gripping the hearts of countless investors.
As of 15:00 on July 1, 2025, international gold prices displayed a "strong abroad, weak at home" pattern. Spot gold in London was quoted at $3,311 per ounce, up 1.47%, while New York gold futures stood at $3,321.3 per ounce, rising 0.41%. Meanwhile, domestic gold prices also diverged, with Shanghai Gold T+D trading at 763.98 yuan per gram.
The Middle East has long been a sensitive hotspot in global geopolitics, and the recent escalation of tensions has become a key driver pushing international gold prices higher. Geopolitical conflicts often trigger risk-off sentiment in the market, and gold, as a traditional safe-haven asset, naturally becomes investors' top choice. As uncertainty in the region grows, investors flock to the gold market, seeking asset preservation and hedging, thereby driving up the prices of London gold and New York gold futures.
However, domestic gold prices failed to move in sync with international prices, showing relatively weaker performance. This reflects differences in supply-demand dynamics and policy interventions between domestic and international markets. On one hand, China's gold market maintains relatively stable supply-demand conditions, with large-scale yet balanced domestic production and consumption, making it less sensitive to international price fluctuations. On the other hand, domestic regulatory policies also influence price trends to some extent. Authorities' oversight and guidance of the gold trading market have helped stabilize domestic prices amid complex global conditions.
The impending release of the NFP data has added further uncertainty to the gold market, creating a triple game among market participants. As a critical indicator of the U.S. labor market, the NFP data directly impacts the U.S. dollar's trajectory, which in turn indirectly affects gold prices.
**The first game** unfolds between bulls and bears. Bullish investors bet on gold's upside potential driven by safe-haven demand, continuously buying to push prices higher. Bears, however, anticipate that a strong NFP report could strengthen the dollar and suppress gold prices, positioning themselves for selling opportunities. The fierce competition between the two sides intensifies gold price volatility.
**The second game** lies between international and domestic investors. International investors focus more on global geopolitical and macroeconomic developments, actively going long on gold amid Middle East tensions. Domestic investors, meanwhile, prioritize China's economic conditions and policy directions, reacting more cautiously to international gold price swings. This divergence in investment strategies leads to the decoupling of domestic and international gold prices.
**The third game** occurs between short-term speculators and long-term investors. Short-term speculators aim to profit from market fluctuations by frequently trading gold contracts, while long-term investors emphasize gold's wealth-preservation attributes and enduring value, holding firm despite short-term volatility. The interplay between these two groups shapes both short-term price movements and long-term trends in the gold market.
As Middle East tensions evolve and the NFP data release approaches, these three games in the gold market will grow increasingly intense. Investors must closely monitor market developments, weigh various factors, and make prudent decisions. Whether the gold market will continue its "tale of two extremes" or usher in new dynamics remains to be seen—a question that warrants close attention from all market participants.
