Good news for the gold bulls! The "small non-farm payrolls" in the United States in January were far lower than expected, and the recruitment "emergency brake" ignited expectations of interest rate cuts.

The latest "mini non-farm" data shows that the number of new jobs added by private companies in the United States in January was far below the general expectations of economists, indicating that the labor market in the United States continued to slow down at the beginning of the year. According to the US private sector employment data released by ADP Research on Wednesday (the data is known as "mini non-farm"), after a slight downward revision of the data from the previous month, the number of private sector jobs in the United States increased by only 22,000 in January, far below the median forecast that economists have repeatedly revised down to 48,000, and lower than the lowest growth expectations given by economists covered by institutions. After the release of the "mini non-farm" data, the "CME FedWatch Tool" showed an expansion in the probability of rate cuts in June and December. On the other hand, for the global traditional safe-haven asset - gold, which experienced the most drastic drop in 40 years last Friday and rare volatility surpassing Bitcoin, the significantly lower-than-expected US employment data can be seen as a bullish factor for gold prices. The unexpected weakness in the labor market implies that the market is more willing to bet on a dovish monetary policy path with rate cuts, which also means a downward trend in nominal/real interest rates and a weaker US dollar, thereby lowering the opportunity cost of holding interest-free assets like gold and consequently pushing up gold prices; this mechanism is common in thematic trading during a gold bull market, where weak employment data drives bets on rate cuts, lowering yields and pushing up gold prices. Due to the previous partial shutdown of some federal government agencies, the release of the official US non-farm employment data compiled by the US Bureau of Labor Statistics (BLS) has been delayed (originally scheduled to be released this Friday), so this ADP data is likely to provide the most complete description of the US labor market for January for the financial markets this week. BLS stated that it will reschedule the release of the January employment report originally scheduled for Friday, with specific dates awaiting notice. Despite some signs of stabilization in the US non-farm labor market in recent months, the significant weakness in private sector employment growth in the United States is well below economists' expectations, indicating that the US labor market in January 2026 is still cooling down, but has not yet entered a continuous negative growth trajectory; the logic of a "soft landing" for the US economy remains firm. Before the release of the January "mini non-farm" data, various statistical data on the service industry, manufacturing productivity, non-farm employment, and inflation have not caused any negative disruptions to the expected "soft landing" of the US economy, nor have they triggered a change in market expectations for a rate cut by the Fed - the interest rate futures market still prices in the expectation of the Fed cutting rates twice in 2026, higher than the median expectation of the FOMC dot plot showing just one rate cut. At the beginning of 2026, the US labor market did not send positive signals Recently, several large US companies have announced plans to lay off workers, including Dow Inc. and cloud computing and e-commerce giant Amazon.com Inc., indicating that at the beginning of 2026, the US labor market did not send positive signals. However, on the other hand, it highlights the fact that although the US labor market is in a soft downward trend, it remains resilient overall, not experiencing a comprehensive decline in job growth; especially the latest initial jobless claims data indicate that the scale of layoffs by US companies is still limited, better than the consensus expectations of economists. ADP Research stated in a statement that recruitment growth in the education and healthcare services sector led the way, while the professional and business services sector saw the largest reduction in employment numbers since June 2025. Employment in large US companies declined, while employment in companies with fewer than 50 employees remained relatively stable. It is understood that ADP derives its employment market research results based on payroll data covering more than 26 million private sector employees in the United States. The latest report released by ADP in collaboration with the Stanford Digital Economy Lab also shows that the wage growth of job switchers increased by only 6.4%, a significant slowdown from the previous month; while the wage growth of job stayers saw a slight rebound. As the technical shutdown of the federal government ended, the BLS's January employment report is expected to be rescheduled for release soon. The report will also include the latest revisions to annual non-farm employment numbers, which are expected to show that the scale of non-farm job growth for the year ending in March 2025 was significantly lower than initially reported. In addition, the ADP employment data for December also showed a revision downwards from the previously reported 41,000 new jobs added to 37,000, highlighting the cooling trend in the labor market. This overall weak employment data may further strengthen the Federal Reserve Board's cautious assessment of the economic outlook, providing more room for potential monetary policy easing in the future. Federal Reserve Chairman Jerome Powell stated last week that "labor market indicators show that after a period of gradual slowdown, the situation may be stabilizing." Currently, the Fed still maintains its target range for the federal funds rate at 3.50%-3.75%, but if the US labor market continues to cool down more than expected, the next Fed chairman, John Warren (who has been nominated by Trump), may have to follow Trump's request and significantly lower interest rates. In the face of the significant drop in gold prices and the sharp volatility, the Wall Street veterans in the financial industry continue to remain bullish on the long-term investment prospects of gold, amidst a backdrop of a weakening US dollar, uncontrolled expansion of debt in developed markets, and continued geopolitical turmoil. J.P. Morgan stated that the recent sharp decline in gold and silver prices was mainly due to a technical liquidation caused by overcrowded positions and margin increases, rather than a fundamental reversal in logic. J.P. Morgan's strategists wrote in a research report released on Sunday that gold remains a dynamic, multi-faceted investment hedging tool, and the physical demand for gold from central banks and retail investors is still much stronger than expected. J.P. Morgan predicts that gold prices will reach $6,300 per ounce by the end of 2026, driven by central bank purchases and investor demand. Although the higher the gold price, the thinner the air, the structural bull market does not face the risk of collapse. The analyst team at UBS believes that gold is currently in the mid-to-late stage of this bull market cycle, transitioning from a continuous upward trend to an important stage of setting new highs while experiencing intermittent retracements of 5-8%. UBS emphasizes in its research report that the typical factors that signal the end of a gold bull market - sustained high real interest rates, structural strength in the US dollar, geopolitical improvements, and a complete rebuilding of central bank credibility - are currently absent. UBS predicts that gold prices will touch $6,200 next month, and then fall back to $5,900 by the end of the year. The rise in gold prices as a result of the weak "mini non-farm" data may add fuel to the rebounding gold market. When the private employment data from ADP, showing only an increase of 22,000 jobs (significantly lower than expected), is interpreted by the market as "continuing cooling in labor demand" on the macro pricing chain, it may increase bets on a more dovish policy path (or at least lower the probability of further tightening). In this context, the downward trend in short-term interest rates/real interest rates + a weaker US dollar will directly reduce the opportunity cost of holding gold, making it marginally positive for gold bulls. Market trading reactions such as "weak ADP, catalyzing strong US bonds, falling yields, and a weaker dollar" have indeed appeared in the market. The ADP data is a "tailwind" for gold, but more like providing a key macro support point for the bulls, rather than being a "decisive gospel" that can change the trend on its own. If subsequent official employment/inflation data continue to validate the "slowing but not faltering trend + rate cuts", gold is more likely to move into a "rate-driven trend phase"; however, if the BLS data after re-ranking shows a strong streak, or if the market enters a deleveraging/margin shock stage, gold may still be pulled back and forth between "safe-haven buying" and "liquidity sell-offs", maintaining high volatility. According to the latest data compiled by institutions, the "30-day volatility index" for gold prices has surged to over 44%, reaching the highest level since the 2008 global financial crisis, exceeding Bitcoin's volatility index of about 39%. Bitcoin, often called "digital gold," has a historically high level of volatility and has long been one of the most volatile assets globally. From a bullish perspective, the surge in volatility of commodities is more common in the later stages of historical bull markets, which also means that the current gold volatility surpassing Bitcoin reflects a deeper market dynamic: in a period of transition in macro risk preferences dominated by a safe-haven logic, traditional safe assets (gold) may reflect changes in macro risk expectations earlier and more intensely than similar risk assets (Bitcoin). Despite gold being caught in a downward trajectory and experiencing sharp volatility, the Wall Street financial giants continue to remain optimistic about the long-term investment prospects of gold against a backdrop of a weakening US dollar, uncontrolled expansion of debt in developed markets, and continued geopolitical turmoil. The sharp decline in gold and silver prices recently has been mainly a result of technical position liquidation caused by overcrowding and margin increases, rather than a fundamental reversal in logic. Strategists from J.P. Morgan emphasized that gold remains a dynamic, multi-faceted investment hedge tool, and the physical demand for gold from central banks and retail investors remains stronger than expected. J.P. Morgan predicts that gold prices will reach $6,300 per ounce by the end of 2026. While higher gold prices mean "thinner air," there is no risk of a collapse in the structural bull market. According to the analyst team at UBS, gold is currently in the mid-to-late stage of this bull market cycle, transitioning from a continuous upward trend to an important stage of setting new highs while experiencing intermittent retracements of 5-8%. UBS emphasizes in its research report that the typical factors that signal the end of a gold bull market - sustained high real interest rates, structural strength in the US dollar, geopolitical improvements, and a complete rebuilding of central bank credibility - are currently absent. UBS predicts that gold prices will touch $6,200 next month, and then fall back to $5,900 by the end of the year.