Last night, the ADP employment data was released at 41,000, significantly lower than the expected 47,000. At first glance, it seemed like good news for gold. But upon closer examination, the actual significance of this data is quite limited.

The end-of-year seasonal surge in temporary workers has distorted the numbers, making them unrecognizable. This is not a genuine market signal; it’s just "noise" meant to cause confusion. ADP fluctuations are inherently volatile and have always been a standard tool for major players to shake out positions, and they generally do not have a substantial impact on the Federal Reserve’s interest rate cut expectations. So, the recent rebound in gold last night, frankly, has no solid foundation and was just a fleeting moment.

The real test is coming—tomorrow, the S&P GSCI will initiate its annual rebalancing. In 2025, precious metals prices surged too rapidly, leading to a significant reduction in their weights. What does this mean? Passive funds will have to cut their holdings accordingly. Gold faces selling pressure of $4.7 billion to $5 billion, and silver will also endure $3.8 billion to $4 billion in selling shocks. The problem is, silver’s liquidity is already weak, so volatility will only become more intense. Plus, tonight’s geopolitical news from Greenland is stirring the market, and tomorrow’s trading is likely to be dominated by rebalancing flows, with wide-range fluctuations already a certainty.

The key question is whether anyone dares to pick up the slack after the selling pressure hits. If strong funds step in, it will be a normal technical pullback; if no one shows interest, the short-term trend could completely reverse.