Gold and Silver Face Pivotal Technical Test in Next 12 Hours

Gold futures demonstrated notable resilience during Wednesday's trading session, reclaiming the psychologically significant $5,000 per ounce threshold in early trading following last week's dramatic selloff. The yellow metal advanced approximately 3% to reach $5,070 per ounce, while silver exhibited even stronger momentum, surging 8–10% toward the $90 per ounce level. This initial strength, however, proved short-lived as macroeconomic data would soon challenge the nascent recovery.

The session's trajectory shifted dramatically at approximately 9:30 AM with the release of the ADP employment report, which revealed a sharp deceleration in U.S. private-sector hiring during January. This disappointing labor market data underscored a broader pattern of cooling employment demand as businesses adopt increasingly cautious hiring postures amid decelerating economic growth and persistently elevated financing costs. The report's implications extend beyond immediate employment trends, complicating the Federal Reserve's assessment of wage pressures, inflation dynamics, and the appropriate trajectory for future monetary policy decisions.

The weak employment data exerted immediate downward pressure on precious metals, pulling gold back beneath the $5,000 level it had just recaptured. Approximately two hours following the report's release, gold futures reached their intraday nadir at $4,975 per ounce. By session's end, the metal settled at $4,986—roughly $15 below the critical $5,000 psychological threshold—representing a modest daily gain of approximately $15, or 0.32%.

Silver's price action mirrored gold's volatility throughout the session. Opening at $87 per ounce, the white metal initially broke above the key $90 level during early trading hours, advancing to an intraday peak of $92. However, similar to gold, silver retreated sharply following the ADP release, declining to $83 before recovering. Despite the intraday strength, silver failed to establish support above the elusive $90 price point, ultimately closing Wednesday's session at $87.76—a solid gain of $2.85, or 3.36%.

The overnight trading sessions in Australia, Hong Kong, and London will prove decisive for both metals' near-term trajectory. Price action when these markets commence trading will likely establish the directional bias for the remainder of the week. Should both metals sustain trading above their respective failed support levels—$5,000 for gold and $90 for silver—the technical outlook would remain decidedly bullish, suggesting the recovery from last week's decline may continue gathering momentum.

Conversely, if gold and silver open decisively below these critical price thresholds when New York trading begins, market participants should prepare for either range-bound consolidation or a resumption of downward pressure. The next twelve hours will therefore serve as a crucial inflection point, determining whether precious metals can maintain their recovery trajectory or face another corrective phase.

Wishing you as always good trading,