July 21, 2026
Gold Rebounds to 4080, 4000 Support Holds; Wells Fargo Says Risk/Reward Has Flipped | July 22, 2026 Morning Report
Comprehensive Report
On July 21, spot gold continued its rebound after receiving strong support at the $4,000 integer level. As of the US close, spot gold was at $4,080.20/oz, up 1.83% on the day, with an intraday range of $3,998.80-$4,087.30. Silver also strengthened, closing at $58.70 (+4.29%). The main drivers of this rebound were short covering and safe-haven demand—despite U.S. Treasury yields, the dollar index, and crude oil prices all rising on the day, gold still recorded significant gains, indicating strong buying support near the $4,000 level. Several market participants stated in public comments this week that the risk-reward landscape for gold has fundamentally changed, and the long-term upside potential remains considerable.
I. Market Review: 4,000 Support Holds, Gold Rebounds to 4,080
In early Asian trading, spot gold found buying support near $3,998.80 and then rose in a volatile manner. According to the Kitco AM Report, before the North American market open, spot gold had recovered to $4,057.60 (+1.26%), and silver was at $58.92 (+4.67%). After the European and US sessions began, the rally continued, and the Kitco PM Report confirmed that gold closed at $4,080.20, successfully breaking above the upper end of the $4,041.65-$4,072.40 retracement range.
On the external market front, the 10-year U.S. Treasury yield rose to 4.628%, and the 2-year yield was at 4.261%. The U.S. dollar index DXY remained resilient at 101.22. In crude oil, tensions in the Strait of Hormuz continued, with Brent crude closing at $91.01/barrel and WTI at $84.91/barrel. On the news front, an oil tanker was attacked near the Strait of Hormuz, mediators pushed for a 10-day ceasefire proposal, but the US and Iran continued to exchange fire around the strait.
In the interest rate market, interest rate futures pricing showed the probability of a September rate hike remained around 63%, significantly down from about 90% before the inflation data release last week, but the risk of a rate hike has not been completely eliminated. The market generally expects the July 29 FOMC meeting to keep rates unchanged, while the September meeting is a 'live meeting'.
On the technical side, the Kitco PM Report noted that spot gold bulls have regained short-term technical advantage. Gold rebounded from $3,998.80 and broke through the $4,041.65-$4,072.40 retracement zone. Short-term resistance is at $4,087.30, and if effectively breached, the next target is $4,162.36. On the downside, $4,041.65 becomes short-term support, and $3,998.80 is a key defense line. For silver, the price recovered the 50-period moving average (approximately $57.68), with short-term resistance at $59.15.
II. Institutional Views: Bottom Consensus Emerging, but Short-term Downside Risks Remain
Sameer Samana, Global Head of Equities and Real Assets Strategy at Wells Fargo（富国银行）, said in an interview that the risk-reward profile for gold has undergone a 'quite significant flip' since the January highs. He believes that the current federal funds rate futures have priced in 2-3 rate hikes, and gold prices have fully discounted this expectation. 'Inflation is not severe enough to warrant substantial tightening.' Samana admitted that gold has not technically confirmed a bottom and could test as low as $3,500 in the short term, but will encounter technical resistance in the $4,500-$4,900 range. He advised investors to focus on longer-term macro cycles—rising oil prices and interest rates will eventually slow the economy, prompting central banks to ease policies again. Wells Fargo maintains its long-term bullish outlook for gold, predicting a year-end 2026 price of $5,300-$5,500, rising to $5,800-$6,000 by end-2027. 'If we are not at least recovering to the highs or even making new highs by end-2027, I think it is very realistic.' In his view, a $500 downside corresponds to about $1,500 upside, which is 'very attractive' for portfolio investors.
Clem Chambers, senior market commentator and founder of ADVFN, gave a more short-term bearish view. He accurately warned of further declines in precious metals in May and now believes 'the bottom is close.' Chambers expects gold to bottom around $3,500 and silver to bottom in the $40-$50 range. He plans to start buying in batches before the end of this year. '$50 is the ceiling of the basement, $40 is the floor of the basement.' Chambers characterized this decline as a 'bubble correction' but believes the long-term inflationary environment (AI infrastructure + industrial reshoring will drive massive money printing) will ultimately push precious metals significantly higher. He also warned of the liquidity discount in physical silver—during selling peaks, the bid price for physical silver could be 70-80% lower than the screen quote.
Schroders（施罗德）precious metals market analyst pointed out in its latest monthly gold outlook that the market environment in June replayed the pattern of 'East buying, West selling'. Central banks in Asian emerging markets were heavily buying when prices fell, while Western investors continued to reduce positions due to the Fed's hawkish stance. Schroders believes gold will bottom over the next 3-6 months, by which time the Fed's hawkish stance is likely to moderate. The analyst also emphasized that the era of fiscal dominance in the US has arrived, and the massive issuance from treasury rollovers and deficit financing will severely constrain the Fed's room for rate hikes, and may even weaken the transmission mechanism of monetary policy.
III. Central Bank Divergence: China Continues Buying, Russia Continues Selling
Divergence in global central bank gold strategies intensified in June. The People's Bank of China (PBOC) increased its gold holdings by about 15 tons in June, its largest monthly purchase so far this year. According to data from the World Gold Council, the PBOC's total gold reserves have risen to approximately 2,346 tons, accounting for about 8.3% of foreign exchange reserves. Schroders noted that the PBOC only bought 2 tons when gold was above $5,000 in February, but bought 15 tons near the average price of $4,250 in June, a more than sevenfold increase in purchases, a signal of 'buying on dips' worth watching. Schroders also believes that the PBOC's actual gold purchases may be understated, as China has retroactively disclosed previously undisclosed purchases in 2003, 2009, and 2015. At current gold prices, China's gold reserves as a share of total reserves are about 8.3%. If the target is raised to 30%, it would take 33 years of continuous buying at June's pace.
On the opposite side, the Central Bank of Russia (CBR) continued to reduce its gold holdings. According to its latest disclosure, as of early July, Russia's gold reserves fell to 73.4 million ounces (approximately 2,282 tons), valued at about $299 billion. In the first half of this year, it cumulatively reduced holdings by 43.5 tons (about 1.4 million ounces), the sixth consecutive month of decline. Total reserve assets fell from $747.4 billion in May to $720.4 billion. Natalia Milchakova, an analyst at Freedom Finance Global, pointed out that the gold sales were primarily used to supplement the budget deficit—which had reached 4.6 trillion rubles by the end of March—and to convert gold into renminbi to bolster foreign exchange reserves. Nikolai Dudchenko, an analyst at Finam, added that many central banks are continuously selling gold due to rising defense spending and energy costs. Notably, domestic demand for gold in Russia is heating up sharply. According to the latest data from the Moscow Exchange, gold trading volume increased by more than 350% compared to March 2025, reaching 42.6 tons.
Between one buying and one selling, the divergence in strategies of emerging market central banks under the wave of sanctions and de-dollarization is clearly reflected. Schroders believes that the sustained large-scale gold purchases by 波兰央行（NBP） since 2022 are not only an isolated case but are more likely a 'leading move' by emerging market central banks to accelerate gold accumulation, with survey data (WGC and OMFIF) supporting this judgment.
IV. HKEX GDU: Weekly Trading Volume Maintains Steady
Hong Kong Exchanges and Clearing Limited's US Dollar Gold Futures (GDU, 1 kg 9999 fine gold, denominated in USD) saw a total trading volume of approximately 36,000 lots over the five trading days last week (July 14-20), with an average of about 7,200 lots per day. On July 15 (Wednesday), the volume recorded the highest of the week at 7,758 lots, while July 20 (Monday) had 6,176 lots. Open interest fell slightly from 1,488 lots on July 14 to 1,363 lots on July 20, with overall positions remaining stable.
In terms of contract structure, the benchmark AUG-26 and DEC-26 contracts were the most actively traded. The AUG-26 contract settled at $129.58/gram (approximately $4,030/oz) on July 20, and the DEC-26 contract settled at $131.40/gram (approximately $4,087/oz), with the spread between the front and deferred months stable. On the calendar spread front, AUG-26/DEC-26 spread trading remained active, recording 2,625 lots on July 20, reflecting the ongoing need for management of medium-term position structures.
Hong Kong Exchanges has established a designated market maker system for the gold futures market to collectively maintain market depth and stability. With the gradual increase in gold pricing power in the Asian time zone and the continued accumulation by the Chinese central bank, the HKEX GDU contract is accelerating its integration into the global precious metals trading network.
V. Institutional Views Express
| Institution/Person | Core View | Tendency |
|---|---|---|
| Wells Fargo Samana | Risk-reward has flipped, long-term bullish to $5,300-$5,500 (end-2026) and $5,800-$6,000 (end-2027), but short-term could dip to $3,500 | 🟢 Medium- to long-term bullish |
| Schroders | Central bank buying 'runway' extremely long, China bought 15 tons in June, gold prices bottom in 3-6 months; fiscal dominance constrains rate hike space | 🟢 Medium- to long-term bullish |
| Clem Chambers | Gold to bottom at 3,500, silver bottom at 40-50, plans to start buying this year; long-term inflation to boost precious metals | 🟡 Short-term bearish / 🟢 Long-term bullish |
| 俄罗斯央行（CBR） | Sold 43.5 tons cumulatively in H1, declining for 6 consecutive months; supplement budget deficit and convert to RMB | 🔴 Supply-side pressure |
| Freedom Finance Global | Russian central bank gold sales consistent with EM trend, used to cover budget deficit and bolster FX reserves | 🟡 Neutral |
| Finam Dudchenko | Many central banks selling gold due to rise in defense spending and energy costs to support local currencies | 🟡 Neutral |
| Kitco PM Report（技术） | Bulls regain short-term technical advantage, break above $4,072 retracement zone; $4,087 is short-term resistance | 🟡 Short-term bullish |
| Interest Rate Futures Pricing | September rate hike probability 63%, July likely on hold; rate hike expectations declined from 90% but not eliminated | 🔴 Rate-side pressure remains |
VI. Key Focus for the Rest of the Week
- July 23 (Friday): US July Markit Manufacturing and Services PMI Preliminary (9:45 ET) — The market will look for signs of an economic slowdown. Data below expectations could strengthen rate cut expectations and support gold.
- Hormuz Situation: Progress on the 10-day ceasefire proposal, the direction of US-Iran military actions, and the aftermath of the tanker attack will directly determine the trajectory of the crude oil premium and indirectly affect inflation expectations.
- Fed July 29 FOMC Meeting: Broadly expected to keep rates unchanged, but focus on the post-meeting statement wording and hints from 沃什 about the September rate path.
- US Stock Q2 Earnings Season: A packed week of tech earnings. The performance of semiconductor and AI-related stocks may affect risk sentiment and indirectly impact gold.
Disclaimer: This material is provided by Delta Horizon Capital（德合资本） for reference by institutional investors only and does not constitute any express or implied investment advice, offer, or solicitation. The data and information contained in this report are sourced from public market channels. Delta Horizon Capital（德合资本） makes no guarantee as to its accuracy or completeness. Past performance is not indicative of future results. Market risk exists, and investment should be made with caution.
Delta Horizon Capital（德合资本） is a quantitative trading institution headquartered in Hong Kong, with its technology and R&D team based in North America, specializing in quantitative trading, two-way quoting, and market liquidity provision. The company has long been deeply involved in diversified markets such as precious metals, stock index futures, FX and rates, energy, and commodities. Relying on mature quantitative pricing models, a rigorous risk management system, and low-latency trading infrastructure, it provides stable, efficient, and flexible liquidity services to institutional clients. The core team members have a combined experience of over 30 years in international futures, options, and derivatives markets. Since 2017, the Delta Horizon trading team has successively obtained on-exchange market maker qualifications for the first batch of base metals, gold futures, A50 stock index futures, and RMB exchange rate futures at Hong Kong Exchanges and Clearing Limited, and has received multiple awards from HKEX for market making and liquidity provision. Delta Horizon Capital (Hong Kong) Limited is currently listed on the liquidity provider list for HKEX US Dollar Gold Futures (GDU). For more details, please visit the official website: www.deltahorizoncapital.com