Gold prices hit a record high! Did we choose the right direction after the non-farm payrolls report?
2026-01-12 17:39:57
On Monday (January 12), during the Asian and European sessions, gold hit a new all-time high, briefly surpassing the $4,600 mark. Multiple global geopolitical risks intensified, coupled with continued market concerns about the independence of the Federal Reserve, propelling international spot gold (XAU/USD) to maintain a strong trend for the third consecutive trading day, with gains steadily expanding. Currently, it has held onto most of its gains, and the gold price is consolidating near its historical peak.
From the perspective of core driving factors, the frequent outbreaks of geopolitical conflicts have become the core engine of safe-haven buying of gold.
The US military intervention in Venezuela has triggered instability in South America, with the US president even declaring himself acting president of Venezuela and planning to lead the transition process, further exacerbating regional uncertainty.
In response to the Iranian government's crackdown on anti-government demonstrations, the Trump administration is assessing punitive measures. This comes amid escalating tensions in the Middle East and Eastern Europe, including a Ukrainian drone strike on a Russian oil depot in Volgograd and Russia's use of hypersonic missiles to retaliate against the Lviv region. The White House's insistence on proceeding with its Greenland acquisition plan is also disrupting the international order.
Trump has even stopped pretending, declaring that he doesn't need international law and that his moral standards and will can limit his exercise of power globally, which is the only thing that can stop him. Multiple risk events have jointly fueled global risk aversion, solidifying gold's status as a core safe-haven asset.
The direction of Federal Reserve policy and the controversy surrounding central bank independence constitute another key variable in the price movement of gold.
Federal Reserve Chairman Jerome Powell recently disclosed that he was threatened with criminal prosecution by the Trump administration. In his public response, he emphasized that interest rate policy is based on public interest rather than political pressure. However, if the investigation results undermine the central bank's independence, it could disrupt the existing monetary policy framework.
This concern has driven the dollar index back from its high since December 5, with funds continuing to flow into gold, which has no yield, further amplifying its safe-haven premium.
The downward revision of non-farm payroll data triggered gold buying. The US employment data released last Friday was mixed – the unemployment rate fell to a relatively low 4.4% in December, but non-farm payrolls increased by 50,000, falling short of expectations (expected 60,000). However, the combined downward revisions of October and November data totaled 76,000, with October revised from -105,000 to -173,000 and November from 64,000 to 56,000. This further exacerbated the already weak data, preventing a boost to the dollar and allowing gold to maintain its dominance driven by sentiment.
The previous article stated that gold prices would rise regardless of the non-farm payroll data, and today gold prices indeed hit a new high.
Previous articles have consistently emphasized that US stocks, gold, silver, and copper have shown similar trends under the AI narrative recently. This morning, US stocks fell collectively in pre-market trading, while gold and silver rose in a divergent direction, highlighting the strength of these three commodities. At the same time, the main reason for the decline in US stocks is that this week is a busy earnings season, with financial institutions such as JPMorgan Chase and Wells Fargo releasing earnings reports that reflect the fundamentals of the US economy. Considering the contraction in the labor market indicated by the non-farm payroll data, US stock investors chose to sell in advance as a hedging strategy.
Looking ahead to future trading opportunities, in the short term, with no major US economic data releases scheduled for Monday, gold and dollar volatility will be primarily guided by comments from core FOMC members. It is crucial to pay close attention to officials' statements regarding monetary policy independence and the path of interest rates.
The core focus in the medium to long term is on this week's US inflation data. If the data falls more than expected, it will strengthen expectations of a Fed rate cut, providing key impetus for gold to break through the $4,600 mark and open up upward space. If inflation stickiness exceeds expectations, it may suppress easing expectations and trigger a technical correction in gold prices.
From a trading perspective, gold is currently in a tug-of-war between "safe-haven demand" and "policy expectations," with the core support level for the bulls remaining solid.
Traders need to closely monitor the possibility of escalating geopolitical tensions and inflation data. When gold prices approach historical highs, they should be wary of short-term profit-taking and seize opportunities to buy on dips. The key focus should be on the validity of a breakout above the $4,600 level. If the price holds above this level, a new round of upward movement is expected to begin.
From a technical perspective, spot gold has entered a trading range above 4500 on the monthly chart. If the price can stabilize above 4500, it has the potential to challenge the 5000 psychological level and the area where the measured upside potential has been met above 5000.
Meanwhile, since major price movements in spot gold usually occur during the European and American trading sessions, we can pay attention to the trend of spot gold tonight and compare it with the Asian session to verify the logic behind the rise in gold prices.
(Monthly chart of spot gold, source: FX678)
At 17:35 Beijing time, spot gold was trading at $4,595 per ounce.
Geopolitical risks erupted in quick succession, prompting a continuous influx of safe-haven buying.
From the perspective of core driving factors, the frequent outbreaks of geopolitical conflicts have become the core engine of safe-haven buying of gold.
The US military intervention in Venezuela has triggered instability in South America, with the US president even declaring himself acting president of Venezuela and planning to lead the transition process, further exacerbating regional uncertainty.
In response to the Iranian government's crackdown on anti-government demonstrations, the Trump administration is assessing punitive measures. This comes amid escalating tensions in the Middle East and Eastern Europe, including a Ukrainian drone strike on a Russian oil depot in Volgograd and Russia's use of hypersonic missiles to retaliate against the Lviv region. The White House's insistence on proceeding with its Greenland acquisition plan is also disrupting the international order.
Trump has even stopped pretending, declaring that he doesn't need international law and that his moral standards and will can limit his exercise of power globally, which is the only thing that can stop him. Multiple risk events have jointly fueled global risk aversion, solidifying gold's status as a core safe-haven asset.
The controversy over the independence of the Federal Reserve intensifies, adding momentum to the weakening dollar.
The direction of Federal Reserve policy and the controversy surrounding central bank independence constitute another key variable in the price movement of gold.
Federal Reserve Chairman Jerome Powell recently disclosed that he was threatened with criminal prosecution by the Trump administration. In his public response, he emphasized that interest rate policy is based on public interest rather than political pressure. However, if the investigation results undermine the central bank's independence, it could disrupt the existing monetary policy framework.
This concern has driven the dollar index back from its high since December 5, with funds continuing to flow into gold, which has no yield, further amplifying its safe-haven premium.
The downward revision of non-farm payroll data triggered gold buying. The US employment data released last Friday was mixed – the unemployment rate fell to a relatively low 4.4% in December, but non-farm payrolls increased by 50,000, falling short of expectations (expected 60,000). However, the combined downward revisions of October and November data totaled 76,000, with October revised from -105,000 to -173,000 and November from 64,000 to 56,000. This further exacerbated the already weak data, preventing a boost to the dollar and allowing gold to maintain its dominance driven by sentiment.
Summary and Technical Analysis:
The previous article stated that gold prices would rise regardless of the non-farm payroll data, and today gold prices indeed hit a new high.
Previous articles have consistently emphasized that US stocks, gold, silver, and copper have shown similar trends under the AI narrative recently. This morning, US stocks fell collectively in pre-market trading, while gold and silver rose in a divergent direction, highlighting the strength of these three commodities. At the same time, the main reason for the decline in US stocks is that this week is a busy earnings season, with financial institutions such as JPMorgan Chase and Wells Fargo releasing earnings reports that reflect the fundamentals of the US economy. Considering the contraction in the labor market indicated by the non-farm payroll data, US stock investors chose to sell in advance as a hedging strategy.
Looking ahead to future trading opportunities, in the short term, with no major US economic data releases scheduled for Monday, gold and dollar volatility will be primarily guided by comments from core FOMC members. It is crucial to pay close attention to officials' statements regarding monetary policy independence and the path of interest rates.
The core focus in the medium to long term is on this week's US inflation data. If the data falls more than expected, it will strengthen expectations of a Fed rate cut, providing key impetus for gold to break through the $4,600 mark and open up upward space. If inflation stickiness exceeds expectations, it may suppress easing expectations and trigger a technical correction in gold prices.
From a trading perspective, gold is currently in a tug-of-war between "safe-haven demand" and "policy expectations," with the core support level for the bulls remaining solid.
Traders need to closely monitor the possibility of escalating geopolitical tensions and inflation data. When gold prices approach historical highs, they should be wary of short-term profit-taking and seize opportunities to buy on dips. The key focus should be on the validity of a breakout above the $4,600 level. If the price holds above this level, a new round of upward movement is expected to begin.
From a technical perspective, spot gold has entered a trading range above 4500 on the monthly chart. If the price can stabilize above 4500, it has the potential to challenge the 5000 psychological level and the area where the measured upside potential has been met above 5000.
Meanwhile, since major price movements in spot gold usually occur during the European and American trading sessions, we can pay attention to the trend of spot gold tonight and compare it with the Asian session to verify the logic behind the rise in gold prices.
(Monthly chart of spot gold, source: FX678)
At 17:35 Beijing time, spot gold was trading at $4,595 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.
