Gold Trading Alert: A surprising breakthrough in the Ukraine peace talks! Gold prices abruptly halt at their highs as the "Non-Farm Payrolls" report and other "terrifying data" are on the horizon.
2025-12-16 07:27:18
Spot gold experienced a sharp rise and fall on Monday (October 15th). Driven by market expectations of a Federal Reserve rate cut and fluctuations in the US dollar exchange rate, spot gold briefly approached the psychological high of $4350, almost touching the more than seven-week high reached last Friday. However, as safe-haven demand cooled rapidly, gold prices quickly gave back most of their gains, ultimately closing at $4304.91 per ounce, a slight increase of only about 0.1%. The main driver of this change was the progress made in important talks between US officials and Ukrainian President Zelensky regarding ending the war, which significantly reduced market demand for safe-haven assets. Meanwhile, global traders are turning their attention to the upcoming key US employment data, which will further reveal the future path of the Federal Reserve's monetary policy. On Tuesday (December 16th) in early Asian trading, spot gold fluctuated slightly higher, currently trading at $4308.64 per ounce.
Ukrainian President Volodymyr Zelenskyy held intensive five-hour talks in Berlin on Sunday with the participation of a US special envoy. During the talks, Ukraine proactively proposed abandoning its offer to join NATO, seen as a significant concession. Negotiations continued on Monday. Following the talks, the US special envoy publicly stated that "significant progress" had been made, injecting new hope for ending the Russia-Ukraine conflict. US President Donald Trump also shared positive feedback on Monday (December 15th), mentioning that his dialogue with European leaders went very smoothly, with many discussions focusing on the Russia-Ukraine conflict, and that they engaged in lengthy and in-depth exchanges. He believes that now more than ever, they are closer to reaching an agreement on peace between Russia and Ukraine. Trump also revealed that he had held multiple talks with Russian President Vladimir Putin and received strong support from European leaders, all of whom are eager to end the protracted conflict. He emphasized the need to facilitate a consensus between Ukraine and Russia, and that progress is currently being made and the talks are effective.
In a statement released Monday, the German government warmly welcomed the "significant progress" made by US President Trump in peace efforts in Ukraine. European leaders highly appreciated the strong consensus between the US, Ukraine, and Europe. They agreed that ensuring Ukraine's security, sovereignty, and prosperity is crucial for broader security across the Euro-Atlantic region. US and European leaders pledged to work together to provide Ukraine with strong security guarantees and economic recovery support in the context of a ceasefire agreement. This is not merely a verbal commitment but includes concrete aid programs to help Ukraine rebuild its post-war economic and social structure.
French President Emmanuel Macron joined this positive voice, stating that all parties are united in their commitment to achieving a just and lasting peace in Ukraine. France is working closely with other European countries, Ukraine, and the United States to build consensus and deepen cooperation on multiple levels, including military aid, long-term reliable security guarantees, and post-war reconstruction. Macron reiterated the need to firmly uphold Ukraine's sovereignty and ensure the security of Europe as a whole. He also pointed out that the choice to achieve peace now rests with Russia, implying its crucial role in the negotiations.
Kitco Metals senior analyst Jim Wyckoff noted that positive signals from the Russia-Ukraine peace talks appear to have dampened safe-haven demand for gold, putting downward pressure on prices. He added that the gold market is also facing profit-taking and a week of selling pressure, with some traders who had previously bought futures choosing to sell to lock in profits.
However, Ukrainian President Zelenskyy stated on Monday that the territorial issue was particularly thorny in the negotiations between Ukraine and the United States in Berlin, with significant differences remaining between the parties' positions. During a joint press conference with German Chancellor Merz, he emphasized that the negotiations faced very complex issues, especially regarding the territorial issue, where the parties held differing views. But importantly, Ukraine was given a full opportunity to articulate its position, and this issue should be resolved fairly.
Zelenskyy stated that negotiations between Ukraine and the United States will continue, and that there is still no "ideal peace plan" at present; the current draft is merely a "working version." The United States hopes to achieve peace as soon as possible, but Ukraine needs to ensure the quality of this peace, reflecting Ukraine's cautious and pragmatic approach in the negotiations. Furthermore, Zelenskyy mentioned that Ukraine is very close to reaching an agreement with its partner countries on "strong security guarantees." Once the final framework of the future peace agreement is established, he hopes to meet with former US President Trump to further solidify bilateral relations.
Traders are currently closely awaiting the U.S. nonfarm payrolls report and retail sales data due on Tuesday, which will provide further clues about the Federal Reserve's policy path.
According to the latest data from the CME FedWatch Tool, the market currently sees a 76% probability of an interest rate cut in January 2026. Singapore Bank FX strategist Shen Maosong analyzed that, due to the disruption caused by the government shutdown during the data collection period, its timeliness and accuracy are inevitably affected, and it may contain a lot of "noise."
He emphasized that from a policymaker's perspective, regardless of the data results, they will approach the assessment with greater caution than usual. The key task for the market is to use this data to clarify the true trends in the US labor market and avoid being misled by short-term fluctuations.
The long wait is finally over. The U.S. Bureau of Labor Statistics will release the November and October non-farm payroll reports at 21:30 Beijing time on Tuesday.
October's overall nonfarm payrolls data is expected to show a decrease of 10,000, primarily due to a significant drop of 130,000 federal sector workers. This decrease is unlikely to be caused by the federal government shutdown, but rather stems from federal workers accepting deferred resignation options offered by the DOGE earlier this year. The market expects a "rebound" in November employment, with economists' median estimate being an increase of 50,000. However, some analysts predict a higher figure, with economists' estimates ranging from an increase of 127,000 to a decrease of 20,000. This highlights the potential for the combined impact of the government shutdown and DOGE layoffs on federal workers to distort the data release, leading to a wide range of expectations and market volatility.
The unemployment rate is expected to rise temporarily, and the quality of the data may be problematic because there is no October unemployment report. The data used for the November unemployment rate was collected during the last week of the government shutdown, so furloughed workers may have been counted as unemployed. The unemployment rate may rise to 4.6% or 4.7% in November, but may then fall back to 4.4% or 4.5% in December and January, the level in September.
This report will help reveal the health of the U.S. labor market, but it does not provide a complete picture. Combined with other labor market indicators, such as initial jobless claims and the ADP private sector report, the U.S. labor market continues to appear weak. Initial jobless claims are trending upward, and while job openings have increased in recent months, hiring has stagnated, with companies in many industries neither hiring nor laying off employees in the current environment.
Prior to this data release, the US job market was at a crossroads: would job growth continue to slow, or would expectations of an economic recovery in 2026 lead to a rebound? Due to technical issues with the data, the market may ignore the October jobs report and the November unemployment rate, instead relying on the November jobs report to drive market reactions. The US dollar's performance was mixed before this data release, but it has weakened somewhat in recent days. The US dollar index is below its 200-day simple moving average, near the 98.00 level.
Given the complexity of this data release, this report has the potential to trigger excessive market volatility. A strong economy is likely to foster a strong labor market; therefore, if the economy is accelerating again, November employment data will be stronger than expected, with further growth anticipated in December.
This report will also have a significant impact on expectations for Federal Reserve rate cuts next year. Currently, the market anticipates two more rate cuts before September next year, while the Fed only projects one. If last month's jobs data is stronger than expected, market expectations may align with the Fed's. If this happens, the dollar index could rise back to around 99.30, its 200-day simple moving average, putting pressure on cyclical stocks. This could also push gold prices back to their October record high, as it could suggest that the Fed's 75 basis point rate cuts since September were too rapid. If November's jobs data is stronger than expected, gold prices may see a pullback.
In addition to the non-farm payroll data, the US October retail sales month-on-month rate (commonly known as "the terror data"), the US October industrial production month-on-month rate, and the US December SPGI manufacturing PMI preliminary value will also be released today. Investors need to pay attention to these data, and also keep an eye on news related to the geopolitical situation in Venezuela.
Overall, progress in the Ukraine peace talks has put short-term pressure on the global gold market, with weakening safe-haven demand leading to a narrowing of gold price gains. However, the release of US employment data will be the next key turning point. Strong data could further boost the dollar and suppress gold prices; conversely, weak data could reignite expectations of interest rate cuts, driving a gold price rebound. Investors need to closely monitor the interaction between geopolitical developments and economic indicators to seize market opportunities. In the current environment of uncertainty, gold will continue to play its role as a safe-haven asset, but short-term volatility should not be ignored.
(Spot gold daily chart, source: FX678)
At 07:24 Beijing time, spot gold was trading at $4308.91 per ounce.
Major breakthrough in Ukraine peace negotiations
Ukrainian President Volodymyr Zelenskyy held intensive five-hour talks in Berlin on Sunday with the participation of a US special envoy. During the talks, Ukraine proactively proposed abandoning its offer to join NATO, seen as a significant concession. Negotiations continued on Monday. Following the talks, the US special envoy publicly stated that "significant progress" had been made, injecting new hope for ending the Russia-Ukraine conflict. US President Donald Trump also shared positive feedback on Monday (December 15th), mentioning that his dialogue with European leaders went very smoothly, with many discussions focusing on the Russia-Ukraine conflict, and that they engaged in lengthy and in-depth exchanges. He believes that now more than ever, they are closer to reaching an agreement on peace between Russia and Ukraine. Trump also revealed that he had held multiple talks with Russian President Vladimir Putin and received strong support from European leaders, all of whom are eager to end the protracted conflict. He emphasized the need to facilitate a consensus between Ukraine and Russia, and that progress is currently being made and the talks are effective.
Positive Response and Commitment from European Leaders
In a statement released Monday, the German government warmly welcomed the "significant progress" made by US President Trump in peace efforts in Ukraine. European leaders highly appreciated the strong consensus between the US, Ukraine, and Europe. They agreed that ensuring Ukraine's security, sovereignty, and prosperity is crucial for broader security across the Euro-Atlantic region. US and European leaders pledged to work together to provide Ukraine with strong security guarantees and economic recovery support in the context of a ceasefire agreement. This is not merely a verbal commitment but includes concrete aid programs to help Ukraine rebuild its post-war economic and social structure.
French President Emmanuel Macron joined this positive voice, stating that all parties are united in their commitment to achieving a just and lasting peace in Ukraine. France is working closely with other European countries, Ukraine, and the United States to build consensus and deepen cooperation on multiple levels, including military aid, long-term reliable security guarantees, and post-war reconstruction. Macron reiterated the need to firmly uphold Ukraine's sovereignty and ensure the security of Europe as a whole. He also pointed out that the choice to achieve peace now rests with Russia, implying its crucial role in the negotiations.
Kitco Metals senior analyst Jim Wyckoff noted that positive signals from the Russia-Ukraine peace talks appear to have dampened safe-haven demand for gold, putting downward pressure on prices. He added that the gold market is also facing profit-taking and a week of selling pressure, with some traders who had previously bought futures choosing to sell to lock in profits.
Challenges in the negotiations and Ukraine's cautious attitude
However, Ukrainian President Zelenskyy stated on Monday that the territorial issue was particularly thorny in the negotiations between Ukraine and the United States in Berlin, with significant differences remaining between the parties' positions. During a joint press conference with German Chancellor Merz, he emphasized that the negotiations faced very complex issues, especially regarding the territorial issue, where the parties held differing views. But importantly, Ukraine was given a full opportunity to articulate its position, and this issue should be resolved fairly.
Zelenskyy stated that negotiations between Ukraine and the United States will continue, and that there is still no "ideal peace plan" at present; the current draft is merely a "working version." The United States hopes to achieve peace as soon as possible, but Ukraine needs to ensure the quality of this peace, reflecting Ukraine's cautious and pragmatic approach in the negotiations. Furthermore, Zelenskyy mentioned that Ukraine is very close to reaching an agreement with its partner countries on "strong security guarantees." Once the final framework of the future peace agreement is established, he hopes to meet with former US President Trump to further solidify bilateral relations.
Market focus shifts to US employment data
Traders are currently closely awaiting the U.S. nonfarm payrolls report and retail sales data due on Tuesday, which will provide further clues about the Federal Reserve's policy path.
According to the latest data from the CME FedWatch Tool, the market currently sees a 76% probability of an interest rate cut in January 2026. Singapore Bank FX strategist Shen Maosong analyzed that, due to the disruption caused by the government shutdown during the data collection period, its timeliness and accuracy are inevitably affected, and it may contain a lot of "noise."
He emphasized that from a policymaker's perspective, regardless of the data results, they will approach the assessment with greater caution than usual. The key task for the market is to use this data to clarify the true trends in the US labor market and avoid being misled by short-term fluctuations.
Forecast and Potential Impact of Non-Farm Payrolls Report
The long wait is finally over. The U.S. Bureau of Labor Statistics will release the November and October non-farm payroll reports at 21:30 Beijing time on Tuesday.
October's overall nonfarm payrolls data is expected to show a decrease of 10,000, primarily due to a significant drop of 130,000 federal sector workers. This decrease is unlikely to be caused by the federal government shutdown, but rather stems from federal workers accepting deferred resignation options offered by the DOGE earlier this year. The market expects a "rebound" in November employment, with economists' median estimate being an increase of 50,000. However, some analysts predict a higher figure, with economists' estimates ranging from an increase of 127,000 to a decrease of 20,000. This highlights the potential for the combined impact of the government shutdown and DOGE layoffs on federal workers to distort the data release, leading to a wide range of expectations and market volatility.
The unemployment rate is expected to rise temporarily, and the quality of the data may be problematic because there is no October unemployment report. The data used for the November unemployment rate was collected during the last week of the government shutdown, so furloughed workers may have been counted as unemployed. The unemployment rate may rise to 4.6% or 4.7% in November, but may then fall back to 4.4% or 4.5% in December and January, the level in September.
A Crossroads in the US Labor Market and the Dollar's Movement
This report will help reveal the health of the U.S. labor market, but it does not provide a complete picture. Combined with other labor market indicators, such as initial jobless claims and the ADP private sector report, the U.S. labor market continues to appear weak. Initial jobless claims are trending upward, and while job openings have increased in recent months, hiring has stagnated, with companies in many industries neither hiring nor laying off employees in the current environment.
Prior to this data release, the US job market was at a crossroads: would job growth continue to slow, or would expectations of an economic recovery in 2026 lead to a rebound? Due to technical issues with the data, the market may ignore the October jobs report and the November unemployment rate, instead relying on the November jobs report to drive market reactions. The US dollar's performance was mixed before this data release, but it has weakened somewhat in recent days. The US dollar index is below its 200-day simple moving average, near the 98.00 level.
Given the complexity of this data release, this report has the potential to trigger excessive market volatility. A strong economy is likely to foster a strong labor market; therefore, if the economy is accelerating again, November employment data will be stronger than expected, with further growth anticipated in December.
This report will also have a significant impact on expectations for Federal Reserve rate cuts next year. Currently, the market anticipates two more rate cuts before September next year, while the Fed only projects one. If last month's jobs data is stronger than expected, market expectations may align with the Fed's. If this happens, the dollar index could rise back to around 99.30, its 200-day simple moving average, putting pressure on cyclical stocks. This could also push gold prices back to their October record high, as it could suggest that the Fed's 75 basis point rate cuts since September were too rapid. If November's jobs data is stronger than expected, gold prices may see a pullback.
In addition to the non-farm payroll data, the US October retail sales month-on-month rate (commonly known as "the terror data"), the US October industrial production month-on-month rate, and the US December SPGI manufacturing PMI preliminary value will also be released today. Investors need to pay attention to these data, and also keep an eye on news related to the geopolitical situation in Venezuela.
Gold Market Outlook and Risk Balance
Overall, progress in the Ukraine peace talks has put short-term pressure on the global gold market, with weakening safe-haven demand leading to a narrowing of gold price gains. However, the release of US employment data will be the next key turning point. Strong data could further boost the dollar and suppress gold prices; conversely, weak data could reignite expectations of interest rate cuts, driving a gold price rebound. Investors need to closely monitor the interaction between geopolitical developments and economic indicators to seize market opportunities. In the current environment of uncertainty, gold will continue to play its role as a safe-haven asset, but short-term volatility should not be ignored.
(Spot gold daily chart, source: FX678)
At 07:24 Beijing time, spot gold was trading at $4308.91 per ounce.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
