Last Friday, the U.S. August nonfarm payrolls report significantly exceeded expectations, delivering a major bearish blow to gold and snapping a two-day rally. The metal saw a sharp intraday plunge to the $4,365 region before swiftly reclaiming much of the lost ground into the close, as the daily chart printed a long lower wick on a bearish candle.
Entering this Monday, gold has avoided a decisive breakdown below Friday's low, signaling a return to a consolidation and repair phase in the near term. From the current technical setup, the sharp rebound from $4,365 to the $4,448 area, followed by a dip to $4,385 in the Asian session that found solid buying support, points to a narrow sideways trading pattern. With prices hovering around $4,410 and two successful holds at higher lows, the short-term downside momentum appears largely exhausted, and the bearish impulse from the jobs data is gradually fading.
Given this backdrop, the probability of another significant leg lower has diminished, making pullback-buying the preferred strategy. As long as the nonfarm low of $4,365 remains intact, the broader recovery structure stays constructive. On the downside, key support is pegged at $4,385 and $4,365, while resistance on the upside is located at $4,448, with a more significant barrier near $4,480. A first test of the $4,448 high is unlikely to see a clean break, so tactical shorts near that resistance level with quick profit-taking may be viable. However, a confirmed breakout above $4,448 would warrant shifting to fresh longs.
The real inflection point is due Thursday and Friday of this week, when PPI and CPI inflation data are set for release. Those figures will determine whether gold can finally break through the key levels and establish a directional trend.
This content is for reference only and does not constitute investment advice. Investors should operate at their own risk.
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