Gold Trading Alert: A fierce struggle between safe-haven demand and data pressure; on the 36th day of the government shutdown, the Supreme Court "sentences" tariffs to death?
2025-11-06 08:03:58
On Thursday (November 6) in early Asian trading, spot gold briefly fell below $3,970, hitting a low of $3,966, and is currently trading around $3,972 per ounce, a drop of about 0.15%, but still holding onto most of the overnight gains. On Wednesday, gold prices rose 1.2%, reaching a high of $3,990.24 and closing at $3,978.95, just a step away from the $4,000 mark! Gold prices were supported by bargain hunting and safe-haven buying, but stronger-than-expected ADP employment data and strong ISM non-manufacturing PMI data cooled market expectations for a December rate cut by the Federal Reserve. The dollar index hit a near five-month high, and US Treasury yields surged to a near one-month high, causing some hesitation among bulls.
On the 36th day of the government shutdown, Trump is getting desperate! The Transportation Secretary has issued a stern warning: 10% of flights will be cut starting Friday.
The US government shutdown has entered its 36th day, breaking the record for the longest shutdown since 1879! 13,000 air traffic controllers and 50,000 TSA security personnel are working without pay, and airlines are in turmoil. US Transportation Secretary Duffy has issued a stern warning: if an agreement isn't reached by Friday, 10% of scheduled flights at 40 major airports will be cut starting Friday! This means that the entire US aviation industry is about to descend into chaos, with widespread flight delays and cancellations imminent. Safe-haven demand has instantly ignited a gold rush!
Trump angrily demanded the abolition of "obstruction of proceedings," but Republicans collectively feigned ignorance.
Trump was frantic, posting three tweets on social media, publicly demanding that Republican senators abolish the Senate's "filibuster" rule so that a simple majority could force through the appropriations bill to end the shutdown. However, Senate Majority Leader Thune poured cold water on this, saying, "We simply don't have enough votes; even our own people can't get past the 60-vote threshold." Republicans were not buying it, and Trump's "nuclear button" couldn't be pressed.
The Supreme Court has launched a scathing attack on Trump's tariffs! The justices collectively questioned whether the president's power has become excessive.
Even more significant news is yet to come—the U.S. Supreme Court held a rare, swift hearing on Wednesday to examine the legality of Trump's "comprehensive tariffs"!
Nine Supreme Court justices, regardless of whether they are conservatives or liberals, took turns bombarding the Trump administration's lawyers: "On what grounds do you arbitrarily impose tariffs using the 1977 Emergency Act? Isn't this blatantly robbing Congress of its coffers?"
Although a conservative Supreme Court justice mentioned the "inherent power of the president in foreign policy," the overall atmosphere was extremely unfavorable to Trump. The market's biggest fear is that the tariffs will be overturned—if the Supreme Court rules against Trump, the huge tariff revenue will instantly disappear, the US fiscal deficit will surge, the supply of Treasury bonds will flood in, and US Treasury yields may hit new highs again!
The US Treasury Secretary, however, remained defiant: "I am very, very optimistic about the Supreme Court!"
The hearing had just ended when US Treasury Secretary Bessant surprisingly declared, "I feel very, very optimistic!" The market: Aren't you getting a little too excited?
Better-than-expected ADP data and an eight-month high in the ISM index have effectively wiped out expectations of an interest rate cut.
The market also faced a number of negative news: the US October ADP non-farm payrolls report significantly exceeded expectations, adding 42,000 jobs, higher than the market forecast of 28,000; the October ISM non-manufacturing PMI surged to 52.4, the highest level since February this year. The new orders index was strong, and service sector activity was booming across the board. As soon as the data was released, hawkish sentiment swept the market, with the probability of a Fed rate cut in December plummeting from 95% last week to 62%, and even as low as 58% on Wednesday! The dollar index surged to 100.36 during the session, a new high since May 29; the 10-year US Treasury yield jumped 1.86%, closing at 4.16%, the highest since October 7.
It's important to note that the better-than-expected ADP data may not necessarily indicate a substantial change in the labor market, as some sectors, such as professional and business services, have been laying off workers for the third consecutive month. However, it does help alleviate concerns about a weak labor market.
Wall Street strategists unanimously predict a rate cut: the labor market is not bad at all!
Corpay's chief market strategist, Karl Schamotta, succinctly stated: "The outstanding ADP figures demonstrate the remarkable resilience of the labor market, and the rationale for aggressive rate cuts has vanished."
David Russell, Global Head of Market Strategy at TradeStation: "These figures aren't bad enough to force the Fed to cut rates."
Matthew Martin, senior economist at Oxford Economics: "We believe the Fed has already provided enough support with two consecutive rate cuts, and will definitely hold rates steady for the next two meetings."
The US dollar surged and then retreated, with the 200-day moving average acting as a strong resistance level.
However, bulls shouldn't be too complacent. The dollar index encountered strong resistance near the 200-day moving average, giving back all its gains in the late session to close at 100.15, almost flat. This 200-day moving average has pushed the dollar back three times in a row, creating significant short-term pressure. Gold bulls took this opportunity to catch their breath.
Gold bulls still have a chance: government shutdown + Supreme Court drama, safe-haven demand explodes.
Independent metals trader Tai Wong aptly put it: "Even a strong ADP report can't mask the fact that the government is shut down; that's the best indicator of employment right now. It's perfectly normal for gold and silver to rise against risk assets."
Kitco senior analyst Jim Wyckoff added, "Safe-haven buying has returned this week, with global stock markets in turmoil, US stock valuations in a bubble, and AI stocks plunging... While traditional economic sectors are slowing down, the stage is set for gold."
In summary: The $4,000 mark is just around the corner; as long as the government shutdown continues, gold prices will not fall!
In the short term, the pressure from the 200-day moving average of the US dollar and the surge in US Treasury yields will create volatility in gold prices; however, in the medium term, the unresolved government shutdown and the Supreme Court's "tariff death sentence" remain unresolved. As long as these two potential risks are not resolved, safe-haven funds will continue to flow into gold.
Today, we need to continue to pay attention to speeches by Federal Reserve officials, as well as the US Challenger job cuts in October and the Bank of England's interest rate decision.
(Spot gold daily chart, source: FX678)
At 08:01 Beijing time, spot gold is currently trading at $3971.79 per ounce.
On the 36th day of the government shutdown, Trump is getting desperate! The Transportation Secretary has issued a stern warning: 10% of flights will be cut starting Friday.
The US government shutdown has entered its 36th day, breaking the record for the longest shutdown since 1879! 13,000 air traffic controllers and 50,000 TSA security personnel are working without pay, and airlines are in turmoil. US Transportation Secretary Duffy has issued a stern warning: if an agreement isn't reached by Friday, 10% of scheduled flights at 40 major airports will be cut starting Friday! This means that the entire US aviation industry is about to descend into chaos, with widespread flight delays and cancellations imminent. Safe-haven demand has instantly ignited a gold rush!
Trump angrily demanded the abolition of "obstruction of proceedings," but Republicans collectively feigned ignorance.
Trump was frantic, posting three tweets on social media, publicly demanding that Republican senators abolish the Senate's "filibuster" rule so that a simple majority could force through the appropriations bill to end the shutdown. However, Senate Majority Leader Thune poured cold water on this, saying, "We simply don't have enough votes; even our own people can't get past the 60-vote threshold." Republicans were not buying it, and Trump's "nuclear button" couldn't be pressed.
The Supreme Court has launched a scathing attack on Trump's tariffs! The justices collectively questioned whether the president's power has become excessive.
Even more significant news is yet to come—the U.S. Supreme Court held a rare, swift hearing on Wednesday to examine the legality of Trump's "comprehensive tariffs"!
Nine Supreme Court justices, regardless of whether they are conservatives or liberals, took turns bombarding the Trump administration's lawyers: "On what grounds do you arbitrarily impose tariffs using the 1977 Emergency Act? Isn't this blatantly robbing Congress of its coffers?"
Although a conservative Supreme Court justice mentioned the "inherent power of the president in foreign policy," the overall atmosphere was extremely unfavorable to Trump. The market's biggest fear is that the tariffs will be overturned—if the Supreme Court rules against Trump, the huge tariff revenue will instantly disappear, the US fiscal deficit will surge, the supply of Treasury bonds will flood in, and US Treasury yields may hit new highs again!
The US Treasury Secretary, however, remained defiant: "I am very, very optimistic about the Supreme Court!"
The hearing had just ended when US Treasury Secretary Bessant surprisingly declared, "I feel very, very optimistic!" The market: Aren't you getting a little too excited?
Better-than-expected ADP data and an eight-month high in the ISM index have effectively wiped out expectations of an interest rate cut.
The market also faced a number of negative news: the US October ADP non-farm payrolls report significantly exceeded expectations, adding 42,000 jobs, higher than the market forecast of 28,000; the October ISM non-manufacturing PMI surged to 52.4, the highest level since February this year. The new orders index was strong, and service sector activity was booming across the board. As soon as the data was released, hawkish sentiment swept the market, with the probability of a Fed rate cut in December plummeting from 95% last week to 62%, and even as low as 58% on Wednesday! The dollar index surged to 100.36 during the session, a new high since May 29; the 10-year US Treasury yield jumped 1.86%, closing at 4.16%, the highest since October 7.
It's important to note that the better-than-expected ADP data may not necessarily indicate a substantial change in the labor market, as some sectors, such as professional and business services, have been laying off workers for the third consecutive month. However, it does help alleviate concerns about a weak labor market.
Wall Street strategists unanimously predict a rate cut: the labor market is not bad at all!
Corpay's chief market strategist, Karl Schamotta, succinctly stated: "The outstanding ADP figures demonstrate the remarkable resilience of the labor market, and the rationale for aggressive rate cuts has vanished."
David Russell, Global Head of Market Strategy at TradeStation: "These figures aren't bad enough to force the Fed to cut rates."
Matthew Martin, senior economist at Oxford Economics: "We believe the Fed has already provided enough support with two consecutive rate cuts, and will definitely hold rates steady for the next two meetings."
The US dollar surged and then retreated, with the 200-day moving average acting as a strong resistance level.
However, bulls shouldn't be too complacent. The dollar index encountered strong resistance near the 200-day moving average, giving back all its gains in the late session to close at 100.15, almost flat. This 200-day moving average has pushed the dollar back three times in a row, creating significant short-term pressure. Gold bulls took this opportunity to catch their breath.
Gold bulls still have a chance: government shutdown + Supreme Court drama, safe-haven demand explodes.
Independent metals trader Tai Wong aptly put it: "Even a strong ADP report can't mask the fact that the government is shut down; that's the best indicator of employment right now. It's perfectly normal for gold and silver to rise against risk assets."
Kitco senior analyst Jim Wyckoff added, "Safe-haven buying has returned this week, with global stock markets in turmoil, US stock valuations in a bubble, and AI stocks plunging... While traditional economic sectors are slowing down, the stage is set for gold."
In summary: The $4,000 mark is just around the corner; as long as the government shutdown continues, gold prices will not fall!
In the short term, the pressure from the 200-day moving average of the US dollar and the surge in US Treasury yields will create volatility in gold prices; however, in the medium term, the unresolved government shutdown and the Supreme Court's "tariff death sentence" remain unresolved. As long as these two potential risks are not resolved, safe-haven funds will continue to flow into gold.
Today, we need to continue to pay attention to speeches by Federal Reserve officials, as well as the US Challenger job cuts in October and the Bank of England's interest rate decision.
(Spot gold daily chart, source: FX678)
At 08:01 Beijing time, spot gold is currently trading at $3971.79 per ounce.
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