Strong NFP data keeps Gold from rising

Gold starts the week around 4,100 USD per ounce after a strong US labour market report. After reaching a local high of 4,106 USD, gold fell nearly 1% to 4,060 USD as the data reinforced expectations of a Fed rate hike in December.

The US economy added 165,000 jobs in October, well above the forecast of 65,000. The previous month’s figure was also revised upwards – from 29,000 to 60,000. The unemployment rate fell from 4.2% to 4.1%, and job growth was broad-based across sectors. This confirmed the resilience of the US labour market.

Additional support for the dollar came from consumer sentiment data. The University of Michigan index rose from 48 to 51 points in November, while annual inflation expectations fell from 4.7% to 4.3%.

Against this backdrop, the likelihood of a Fed rate hike in December increased to around 77% from 67% the day before. Fed official Alberto Musalem noted that inflation remains a concern, although inflation expectations remain stable.

The geopolitical backdrop remains mixed. Negotiations between the US and Iran are ongoing, with markets acknowledging the possibility of an agreement. Still, Houthi attacks on Saudi Arabia continue, and Tehran is reportedly preparing for an escalation scenario. Attention in the gold market is now shifting to US inflation data, unemployment claims, and fresh comments from Fed officials this week.

Technical analysis

On the H4 XAU/USD chart, a recovery wave is developing after the decline to the 3,874 USD area. Buyers pushed the price back above 4,032 USD, generated upward momentum towards 4,145 USD, and held support following the correction. The current structure indicates a short-term upward bias, though a sustained reversal of the preceding decline still needs confirmation. The nearest target is 4,145 USD, after which attention shifts to the 4,172 USD zone. A close above that area would open the way for further gains towards 4,195 USD.

The MACD indicator is above zero, but its signal line is pointing downwards. The contraction of the positive histogram relative to the recent high reflects weakening momentum. The indicator therefore supports the recovery, although interim consolidation remains likely.

On the H1 XAU/USD chart, following the move to 4,145 USD, the market corrected to 4,032 USD and resumed its advance towards 4,121 USD. The current range is therefore bounded by support at 4,032 USD and resistance at 4,145 USD. The 4,032 USD level acts as the lower boundary of the current structure; holding it preserves conditions for retesting the upper end of the range.

The Stochastic is above 80, with the fast line turning downwards and remaining below the signal line. This configuration warns of a local pullback before the next move.

The baseline scenario for the session involves testing 4,145 USD, then moving towards 4,172 USD on a confirmed break above this level. A return below 4,032 USD would invalidate the near-term upside scenario and increase the likelihood of a decline towards 3,972 USD. Until the price breaks out of the range, intraday volatility is likely to persist.

Conclusion

Gold has come under pressure after a stronger-than-expected US labour market report showed 165,000 jobs created in October versus a forecast of 65,000, with the unemployment rate falling to 4.1%. The data reinforced expectations of a December Fed rate hike, pushing the probability to around 77%. Consumer sentiment also improved, while inflation expectations eased slightly. The geopolitical backdrop remains mixed, with ongoing US-Iran negotiations offset by continued Houthi attacks and reports of Iranian preparations for escalation. Technically, gold is in a short-term recovery phase within a broader downtrend, with resistance at 4,145 USD and 4,172 USD, and support at 4,032 USD. A confirmed break above resistance would open the way towards 4,195 USD, while a return below support would invalidate the recovery scenario and increase the likelihood of a decline towards 3,972 USD. The overbought Stochastic suggests a local pullback may precede any further upside.