Fed Unexpectedly Dovish, Gold and Silver Bulls Celebrate
On July 28, 2026, the precious metals market saw sharp volatility, with gold and silver both hitting multi-month highs. As of 18:00 Beijing time, COMEX gold futures' main contract was at $2,123.8/oz, up 2.4% intraday; silver futures at $30.25/oz, up 3.6%. Spot gold also crossed the $2,100 mark, near $2,120. The rally was strongly bolstered by the latest Fed monetary policy signals.
Core Driver: FOMC Minutes Hint at End of Hiking Cycle
At 2 a.m. Beijing time, the Fed's July meeting minutes showed most members favored pausing rate hikes at the September meeting and considering a cutting cycle by end-2026. The market had previously expected at least one more hike this year, but the tone turned clearly dovish, stating "inflation pressures continue to ease and the labor market shows signs of slowing." This caused the USD index to plummet 0.8% instantly and the yield curve to steepen downward. As non-yielding assets, gold and silver gained huge appeal, with speculative longs entering aggressively.
Middle East Tensions Fuel Safe-Haven Demand Surge
Besides Fed factors, geopolitical risks escalated on the same day. In the afternoon, a new armed conflict erupted between Israel and Hezbollah along the border, with both sides exchanging rockets. Crude oil surged 3% after the event, and safe-haven funds quickly poured into gold and silver. Market participants feared the conflict could spread to oil-producing regions, triggering a global energy supply disruption. The world's largest gold ETF, SPDR Gold Trust, saw holdings increase by 7.2 tons in a single day, indicating institutional-level safe-haven buying.
Technical Analysis: Key Resistance Broken, Upside Opened
From the charts, gold accelerated after breaking above the previous resistance at $2,070. The daily MACD golden cross above zero line expanded, RSI rose to 68, not yet in overbought territory, indicating ample momentum. For silver, the gold/silver ratio fell from 78x to 70x, suggesting silver is catching up. On the downside, gold has a dense trading zone near $2,080, with silver support at $28.5. Current market sentiment is extremely bullish, but watch for short-term profit-taking pullbacks.
Outlook & Strategy: Focus on NFP Data and Central Bank Buying
Looking ahead to next week, the market focus will shift to the U.S. July non-farm payrolls report due in early August. If employment data comes in weaker than expected, it would reinforce Fed rate cut expectations, and gold and silver could continue to rally. Additionally, global central bank gold buying continues, with the PBOC increasing its gold reserves for nine consecutive months. In terms of strategy, investors may consider building positions in batches near gold's pullback to $2,100, as the long-term bullish trend remains intact. Silver is more volatile and suitable for shorter-term traders with higher risk tolerance.
Key Data at a Glance
- COMEX Gold: $2,123.8/oz, +2.4%
- COMEX Silver: $30.25/oz, +3.6%
- USD Index: 98.45, -0.8% intraday
- 10-Year U.S. Treasury Yield: 4.12%, -5 bps
- World's Largest Gold ETF Holdings: +7.2 tons to 986.3 tons
This article is for market information only and does not constitute investment advice. Precious metal investment involves risks. Please make prudent decisions based on your own risk tolerance.
