The cooling of employment in the United States strengthens expectations of loose monetary policy, profit-taking limits gold prices, but downside potential is still limited.

After a sharp increase in recent times, international gold prices experienced a significant pullback on Wednesday as investors chose to take profits. However, weaker-than-expected US job data strengthened market bets on a Fed rate cut later this year, limiting the decline in gold prices. At the close, spot gold fell by 0.87% to $4,455.42 per ounce, with a maximum decline of 1.7% to $4,422.89 per ounce at one point during the session. US gold futures for February delivery fell by 0.7% to $4,462.50. David Meger, the head of metal trading at High Ridge Futures, stated that the day's decline was mainly a normal profit-taking after the rapid rise in the previous round. However, he also pointed out that the soft job data continues to support the logic of the Fed shifting towards easing, which is an important background for the recent strength in gold prices. Data shows that the decline in US job vacancies in November exceeded expectations, and another report released by ADP showed that private sector employment growth in December also fell short of expectations. According to data compiled by LSEG, the market currently expects a total rate cut of about 61 basis points by the Fed this year, and investors are now turning their attention to the non-farm payroll report due to be released on Friday. Geopolitical uncertainty continues to linger. Market attention was drawn to the situation after Venezuelan President Maduro was arrested over the weekend. US President Trump announced plans on Tuesday to refine and sell Venezuelan oil, with the White House confirming discussions on acquiring Greenland, including potential military involvement. Meanwhile, the Chinese central bank continues to increase its gold holdings. Official data shows that the Chinese central bank increased its gold reserves for the 14th consecutive month in December last year. Meger stated that this data reflects the strong physical demand in the Asian region, which is one of the important reasons for the recent upward trend in gold prices. As a non-interest-bearing safe haven asset, gold typically benefits in a low interest rate environment and rising uncertainty. In other precious metals, spot silver fell by 3.77% to $78.2 per ounce. HSBC raised its silver price forecast for 2026 to $68.25, but warned that as supply becomes more abundant, price volatility may intensify; while Goldman Sachs pointed out that low London market inventories could trigger severe volatility and short-covering rallies, but there is also a risk of subsequent decline. Spot platinum fell by 6.5% to $2,285.75, while palladium dropped by 5.2% to $1,727.40.