Private employers added just 38,000 jobs in August, according to ADP data, marking the weakest reading since January. This shortfall, paired with a Fed Beige Book report indicating only modest economic growth, prompted a slight cooling in rate-hike expectations. The probability of a September hike dipped to 64%, down from 67%, providing the necessary momentum for a short-covering rally in precious metals.

Despite the rebound, the market remains in a volatile holding pattern. Gold recovered to $4,386.70 an ounce after testing a support zone near $4,281, while silver climbed to $65.20. These gains arrive against a backdrop of persistent geopolitical tension in the Strait of Hormuz, where ongoing military exchanges between the U.S. and Iran keep crude oil prices elevated. While lower yields and a softer dollar supported the metals, the looming threat of inflation from high energy costs continues to limit upside potential. Investors are now looking to Thursday’s jobless claims and ISM services data to gauge the next move ahead of Friday’s critical nonfarm payrolls report.