US employment cools down, easing intensifies expectations, profit spurts back and suppresses gold prices, but the downside is limited

The Zhitong Finance App learned that after the recent sharp rise, international gold prices showed a clear correction on Wednesday, and investors chose to make a profit. However, the weaker-than-expected US employment data strengthened the market's bets on the Fed's interest rate cut during the year and limited the decline in gold prices.

By the close, spot gold fell 0.87% to $4,455.42 an ounce, falling as much as 1.7% to $4,422.89 during the intraday period. US gold futures for February delivery closed down 0.7% to $4,462.50.

David Meger, head of metals trading at High Ridge Futures, said that the day's decline was mainly a return to normal profits after the previous round of rapid gains. However, he also pointed out that weak employment data continues to support the Fed's logic of shifting towards easing, and this is an important background for the recent strengthening of gold prices.

According to the data, the decline in US job vacancies in November was greater than expected, while another report released by ADP showed that private sector employment growth also fell short of expectations in December. According to data compiled by LSEG, the market currently expects the Federal Reserve to cut interest rates by a cumulative total of 61 basis points this year, and investors' attention has turned to the non-farm payrolls report to be released on Friday.

Geopolitical uncertainty also continues. After Venezuelan President Nicolas Maduro was arrested last weekend, the situation attracted market attention. US President Trump announced plans to refine and sell Venezuelan crude oil on Tuesday. The White House also confirmed that discussions are ongoing on the acquisition of Greenland, which does not rule out potential military participation.

Meanwhile, China's central bank continues to increase its gold holdings. According to official data, the central bank of China increased its gold reserves for the 14th consecutive month in December last year. Meger said that this data reflects the still strong physical demand in the Asian region and is one of the important reasons for the recent rise in gold prices.

As a no-profit safe-haven asset, gold usually benefits from low interest rate environments and rising uncertainty.

In terms of other precious metals, spot silver plummeted 3.77% to $78.2 an ounce. HSBC raised its 2026 silver price forecast to $68.25, but warned that as supply becomes easier, price volatility may increase; Goldman Sachs pointed out that low inventories in the London market may cause sharp fluctuations and a bearish rebound, but there is also a risk of falling back later.

Spot platinum fell 6.5% to $2,285.75, while palladium fell 5.2% to $1,727.40.