Hot Trading Week: The Battle Between Inflation and Monetary Policy, What Opportunities Are There for Gold and Silver Investors?

The comprehensive asset rally began the strong start of 2026. The S&P 500 surged 1.6% last week, while the Russell 2000 index for small-cap companies rose 4.6%. The Vanguard S&P 500 ETF (VOO) recorded $10 billion in inflows over a few days—an impressive figure for a passive fund. These are positive early signals for the entire fiscal year. Capital is flowing back into cyclical sectors, raw commodities, and high-risk assets, reflecting a shift in market sentiment from safety to income seeking. Strategists from Nomura Securities International attribute this turnaround to the recovery of the labor market, rising logistics costs, and strong demand for automobiles.

Gold and Silver Shine Amid Geopolitical Turmoil and Fed Expectations

Spot gold jumped over 4% last week, accumulating a $177 increase since the start of the year. Silver performed even better with nearly 10% gains, surpassing $7. Sizable rally reflects safe-haven demand amid unpredictable geopolitical developments.

The US ISM manufacturing report released this week showed a stronger-than-expected economic outlook, temporarily pressuring precious metals as traders reduced expectations of an early Fed rate cut. However, this adjustment was short-lived. The non-farm payrolls report on Friday disappointed—only 50,000 jobs created—enough to reignite speculation about a potential easing cycle, albeit possibly delayed.

Market sentiment is now awaiting a breakthrough event: the December CPI report due next Tuesday. This data could shape gold and silver prices in the coming days.

Fed Remains Silent, Officials Cautious

Next week, a busy schedule of central bank officials’ speeches is expected. Fed chairs from Atlanta, Richmond, New York, St. Louis, and Minneapolis will speak sequentially, with particular focus on Fed New York President Williams and Fed Philadelphia President Harker on economic outlook.

The Fed Beige Book—an assessment of the global economy—will also be released Thursday, providing additional context for upcoming monetary policy decisions.

Based on CME Group data, traders currently price in the next rate cut as early as May, or possibly later. JPMorgan US economist Michael Feroli comments that the 50,000-job figure is “good enough” for stability. Bank of America Global Research publicly states confidence that the Fed will not cut rates until Powell’s successor takes office. Morgan Stanley, Barclays, and Citi have all pushed their rate cut forecasts to late 2026.

CPI—The Starting Gun in the Fight

The unadjusted annual CPI, the seasonally adjusted monthly CPI, and the core CPI—both unadjusted annual and monthly—will be released Tuesday at 21:30 (Eastern Time). This is a key data set for the week.

Analyst Eren Sengezer notes that December CPI data is unlikely to change the Fed’s January decision, but a large deviation from market expectations—especially in the monthly core CPI—could trigger a strong market reaction. If the monthly increase hits 0.3% or higher, persistent inflation fears could resurface, supporting the USD. Conversely, if below 0.2%, the USD may face downward pressure while international spot gold could see modest gains.

Other key data next week include US November retail sales, PPI index, UK quarterly GDP, eurozone trade balance, New York/Philadelphia manufacturing indices, and weekly jobless claims.

Greenland, Iran, and Escalating Geopolitical Scenarios

US Secretary of State Rubio is expected to meet Danish officials and Greenland representatives this week. Trump continues to assert his determination to seize the island, stating “ownership is very important.” If tensions between the US and EU escalate over this issue, safe-haven flows may turn to international spot gold.

Iran’s situation also heats up as protests against the government erupt nationwide. Trump warns of potential military action if Iran’s regime uses deadly violence. Iranian Foreign Minister Aragchi responds firmly: the US and Israel have attempted to attack Iran before, but failed; repeating such attempts would yield similar results. Escalating conflict in Iran will give investors more reasons to seek gold as a safe haven.

Technical Signals and Wyckoff Method in Rebalancing Context

Jim Wyckoff from Kitco provides a technical target: the February gold futures contract aims for the historic resistance level of $4,584 if buyers maintain pressure. The reversal target for sellers is $4,284.30. Initial resistance is at $4,500, followed by this week’s high of $4,512.40. Support levels are at $4,415 and $4,400.

CPM Group analysts recommend selling after Thursday’s close with an initial target of $4,385/oz, stop-loss at $4,525, with a timeframe from January 9 to 20, 2026. They note that long-term political and economic risks remain unresolved, which could drive prices higher in Q1, despite a potential short-term technical sell-off.

Next week also features a major event: the annual commodity index rebalancing from S&P GSCI and Bloomberg Commodity Index. Gold and silver contracts may face mechanical selling pressure. However, Saxo Bank notes that after widespread dissemination of rebalancing news, the risk of uncontrolled volatility has decreased significantly. How gold and silver navigate the rebalancing window will provide valuable signals about underlying demand resilience.

Earnings Season: Opportunity or Challenge for S&P 500?

Q4 earnings season in the US begins with major banks JPMorgan, Citi, Bank of America reporting next week, along with Delta Air Lines. Despite the Fed not yet deciding on an early rate cut, US equities have rallied strongly. Investors seem optimistic that economic acceleration will generate broad profits beyond the tech sector.

Jose Torres of Interactive Brokers states: “AI is losing its promise, Wall Street is seeking new catalysts. As the economy accelerates and rates fall, cyclical sectors will benefit.”

The S&P 500 is approaching 7,000 points, while the Dow nears 50,000. Cayla Seder of State Street Bank notes that the employment report shows a more balanced labor market rather than weakness, enough to sustain stock market momentum without forcing the Fed to change policy expectations.

The Supreme Court’s ruling on Trump’s tariffs is still pending. This decision will be a major test for US equities and bonds. Removing tariffs could improve profit margins, but bonds may face pressure as potential stimulus complicates the rate cut path and worsens budget deficits.

Key Events Next Week

Monday (1/12): Japan’s Coming of Age Day, Tokyo stock exchange closed; US Treasury futures trading begins at 15:00 (Eastern Time).

Tuesday (1/14): Fed speeches, CPI release, EIA energy report.

Wednesday (1/15): Continued Fed speeches, OPEC crude oil report, US retail sales.

Thursday (1/16): Fed Beige Book, Williams’ speech to open event, UK and eurozone economic reports, US jobless claims.

Friday (1/17): Barkin’s speech, import price data.

Kitco News survey indicates Wall Street largely agrees that gold will rise in the short term, with retail investors remaining optimistic. Rich Checkan, COO of Asset Strategies International, comments: “The calendar has shifted from 2025 to 2026, but the market fundamentals remain unchanged. Central banks are still buying gold. Tensions in Ukraine, Gaza, Venezuela are escalating. USD is weak. Rates are low. Gold continues to be a safe haven.”

Adam Button of Forexlive.com states that Greenland is the most important issue for the USD in the near future. If the US can seize foreign reserves as it did with Russia, countries will seek to limit dependence on the USD. The upcoming Supreme Court decision on tariffs will be a “critical moment for gold,” potentially causing price swings of up to $500 depending on the outcome.

James Stanley of Forex.com comments: “The $4,500 level may act as a barrier but buyers still support corrections. I lean toward an uptrend until evidence suggests otherwise.”

Next week will be a comprehensive test for gold, silver, and the broader financial markets—delicately balancing monetary policy outlooks, inflation, and geopolitical factors. How markets respond to these elements will shape the direction in the coming weeks.