Golden Week Friday Watershed: Non-Farm Payrolls and Supreme Court Ruling Will Determine Gold Price Direction

Gold prices are currently supported by both geopolitical tensions and weak US economic data, with bullish momentum remaining solid. However, analyst Giuseppe Dellamotta points out that two major events happening on Friday (January 10) could be the key variables that change the game: the US non-farm payroll report and the Supreme Court’s ruling on Trump’s tariff policies. The outcomes of these two events will directly determine the short-term direction of gold prices.

Why Gold Prices Continue to Strengthen

The recent rise in gold prices is primarily driven by two factors. First, geopolitical tensions increase global uncertainty, boosting demand for gold as a safe-haven asset. Second, weak US economic data reinforce market expectations of Federal Reserve rate cuts, which typically weaken the dollar and benefit gold.

It is worth noting that the previous non-farm payroll report was considered less reliable due to government shutdown issues, making this upcoming data even more critical. New data should provide a clearer picture of the true state of the US economy.

Impact Pathways of the Two Major Variables on Friday

Dual Role of Non-farm Payroll Report

Non-farm data is an important reference for the Federal Reserve’s policy decisions. If the data is strong, it indicates a healthy US labor market, prompting traders to adjust expectations and believe the Fed is not in a hurry to cut rates, which will boost the dollar and suppress gold prices. Conversely, if the data is weak, it confirms economic slowdown signals, supporting rate cut expectations and benefiting gold.

Logic of the Supreme Court Ruling on Stagflation

Trump’s tariff policies are a significant economic uncertainty at present. If the Supreme Court rejects the tariffs, stagflation risks are alleviated, economic outlook improves, and gold loses its safe-haven support. But if tariffs remain unchanged, stagflation pressures persist, and gold’s safe-haven value will continue to support prices higher.

Investor Insights

Probabilistically, the outcomes of these two variables are somewhat correlated. Strong employment data often accompanies optimistic economic expectations, which may also make the market more receptive to tariff policies. Conversely, the opposite can also be true. However, each factor is independent, and their combined results can be more complex.

Investors should closely monitor the two releases on Friday, as they will directly influence short-term gold price volatility. For those holding gold positions, trading decisions before the weekend are particularly crucial.

Summary

Currently, gold’s bullish momentum remains firm, but Friday will be a critical watershed. The non-farm payroll report and the Supreme Court’s tariff ruling are the two major variables that will influence the subsequent direction of gold prices through expectations of Fed policy and stagflation risks. Regardless of which scenario unfolds, they will cause noticeable impacts on gold prices. This means that Friday’s market could be quite volatile, and investors should prepare accordingly.