Last week, gold prices surged before retreating, with spot gold in London rising 2.05% weekly to $4,082.159 per ounce. The market is repricing the Federal Reserve's rate cut trajectory as the U.S. Labor Department and Commerce Department prepare to release key data starting this Thursday, including inflation and employment figures. Investors are advised to adopt a wait-and-see approach in the short term.
On the data front, the U.S. ADP employment report showed a decline of 45,000 private-sector jobs in October, marking the largest drop in two and a half years. The weak employment data has bolstered expectations of Fed rate cuts. However, the U.S. Bureau of Labor Statistics failed to release the October CPI report as scheduled. A White House spokesperson indicated that the October CPI and employment data might never be published, raising concerns about the accuracy of the Fed's December monetary policy decisions. Meanwhile, President Trump signed a bill to end the longest government shutdown in U.S. history. While the resolution initially lifted market sentiment, investor worries about economic and employment data weakness due to the shutdown resurfaced, leading to instability in risk assets. Both the U.S. dollar and gold declined simultaneously, reflecting liquidity concerns.
Geopolitically, Russia's Foreign Ministry spokesperson stated that Ukraine's decision to halt negotiations demonstrates a lack of willingness to achieve peace. Ukraine's First Deputy Foreign Minister confirmed on the 12th that peace talks with Russia have been suspended due to lack of progress, with no new negotiations expected before year-end.
The end of the U.S. government shutdown initially triggered a rapid rally in stocks and improved risk appetite, but markets quickly digested the positive impact. Renewed instability in U.S. equities and liquidity concerns prevented gold from reaching new record highs. Additionally, growing divisions within the Fed and uncertainty around the December rate cut path have limited sustained bullish momentum for gold. Combined with geopolitical assessments, gold prices may struggle to break out of their current range-bound pattern or even weaken further.
Domestically, new gold policies in China have sparked heated discussions. The significant rise in domestic gold jewelry prices requires consumer adjustment, likely suppressing short-term demand—a factor that may eventually weigh on physical gold demand from a supply-demand perspective. Given the unclear outlook, investors are advised to remain cautious or consider strategic accumulation at lower levels for portfolio diversification.