Gold prices started the new week on the defensive as a stronger US dollar and elevated Treasury yields continued to weigh on bullion, limiting the benefit from a weaker-than-expected US employment report.
Spot gold fell around 0.3% on Monday to about $4,131 an ounce, extending the pressure seen during Friday’s session. The metal had initially gained after the latest US jobs report showed a sharp slowdown in employment growth, but the recovery failed to hold as the dollar strengthened and bond yields remained high.
The September employment report showed that US nonfarm payrolls increased by just 29,000, significantly below market expectations of roughly 90,000. The unemployment rate also moved higher to 4.2%, while previous months’ employment figures were revised lower.
Normally, weaker employment data can support gold by reducing expectations for higher interest rates. However, the reaction this time has been more complicated. Although expectations for another Federal Reserve rate increase in October have fallen sharply, longer-term Treasury yields remain elevated, increasing the opportunity cost of holding a non-yielding asset such as gold.
The US dollar has added another layer of pressure. The dollar strengthened on Monday, making gold more expensive for buyers using other currencies. This has made it harder for bullion to build a sustained recovery despite the softer labour-market data.
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Gold Technical Outlook
From a technical perspective, gold remains vulnerable after failing to establish a strong recovery from its recent decline.
Market analysis for the new week identifies the $4,110 area as an important support zone. Gold is currently trading close to that level, meaning a decisive break could expose the metal to further losses toward the 4,025–4,050 region, followed by the psychological $4,000 level.
On the upside, gold needs to regain the $4,200 area to improve the short-term technical picture. A sustained move above that region could bring stronger resistance zones into focus, while failure to reclaim it would leave sellers in control.
Earlier technical readings from Friday also placed immediate support around $4,150, followed by approximately $4,118 and $4,064. The difference between these levels reflects the rapid price movement around the US employment release and the subsequent reversal.
What Traders Are Watching
The next direction for gold is likely to depend heavily on the interaction between the US dollar, Treasury yields and expectations for Federal Reserve policy.
The weak employment report has reduced expectations for an October rate increase, but markets continue to monitor inflation risks and the possibility that elevated oil prices could keep price pressures persistent. Meanwhile, the benchmark 10-year Treasury yield remains around the 5.2% area, keeping pressure on gold.
For now, the $4,110 support zone remains the key level to watch. Holding above it could allow gold to attempt another recovery, while a sustained break below it would strengthen the bearish technical setup and potentially expose the metal to the $4,000 region.
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