Gold extended gains today following Wednesday's more than 3% jump. The metal added about 1.9% to trade near $4,139/oz. Wednesday marked the strongest daily rise since August and pushed gold back above the $4,000 level that markets view as support. Silver rose by 1.7% to $53.11 after nearly a 5% spike the day before. Platinum and palladium also strengthened.

The catalyst was the Democrats' election victory and the prospect that Congress would restrain the Trump administration's tax and spending plans. That view pushed Treasury yields and the dollar lower — a supportive combo for gold, which pays no yield and becomes cheaper for foreign buyers when the dollar weakens.

The second pillar supporting gold is oil. Brent fell below $100/bbl for the first time since early October and continued lower after Trump's more cautious comments about strikes on Iran. Recall that expensive oil had been a primary driver of recent inflation and higher Fed interest rate expectations, both of which weighed on gold. With markets now pricing in a December rate hike, every drop in oil reduces a major headwind for the metal.

The scale of the reversal is notable. Late last week, gold traded below $4,000 and lost about 6.8% in October. Wednesday morning spot was around $3,942; today's level is nearly $200 higher. Still, since February, when the US–Iran conflict began, gold has remained more than 20% below its January peak amid the energy shock forcing tighter policy.

The market is trading on expectations rather than concrete policy changes. Many strategists say that gold may be finding a floor, but a sustainable recovery requires easing in Fed rate expectations and a further decline in real yields.

The near-term focus is Friday's US payrolls report. Yesterday, ADP data showed that private payrolls rose by 86,000 in October, versus a 67,000 consensus. The market forecasts about 65,000 new jobs on Friday and unemployment of roughly 4.2% (September's payrolls were only +29,000, and revisions for July and August subtracted another 60,000). If Friday confirms the strong ADP print, the Fed would have less reason to soften its tone, and gold would rely mainly on a weak dollar and lower oil prices. A soft employment print and signs of contained inflation, by contrast, would give gold additional support.

All this indicates that gold has bounced from multi-month lows thanks to a weaker dollar, falling yields, and cheaper oil. I expect the metal to have a decent chance to hold above $4,000 in the coming sessions and to extend gains if the payrolls report is weak. But this bullish scenario depends on oil staying soft — any renewed Iran tensions would likely push yields and the dollar back up and put fresh pressure on gold.

Technically, for buyers, the immediate task is to overcome the resistance level of $4,124. That would open a move toward $4,192, above which upward progress becomes more difficult. The next target sits near $4,249. On the downside, bears will try to take control of the market at $4,062. A break below that level would be a serious blow to longs and could drive gold down to $4,001, with a further target near $3,954.