Gold climbs back above $4,100 despite robust US NFP figures

• At around $4,100, gold regains ground in early Asian trading on Monday.
• Hopes of an end to the Iran war strengthen following the US midterm elections.
• October’s US NFP increase exceeds expectations.

Near $4,100, Gold price (XAU/USD) is recouping part of its losses in Monday’s early Asian session. The precious metal is benefiting from speculation that incoming Democrats will press for an end to the Iran war.

Having won majorities in both the House and Senate, Democrats are firmly opposed to US President Donald Trump’s proposed $1.5 trillion defence budget and seem intent on blocking its passage, Bloomberg reported.

According to a source familiar with the discussions, Democrats are likely to approve only around $1 trillion in defence spending. They are keen to avoid being seen as endorsing continued funding for the war against Iran.

October’s US employment figures could nevertheless limit gold’s gains by supporting the US Dollar (USD) and Treasury yields. The US Bureau of Labor Statistics (BLS) reported on Friday that the economy created 165,000 jobs in October, up from 60,000 in September and above forecasts of 65,000. Meanwhile, the Unemployment Rate declined from September’s 4.2% to 4.1% in October.

Expectations that the Federal Reserve (Fed) could maintain higher interest rates for longer were reinforced by the stronger-than-forecast US payrolls figures. Since gold pays no yield, higher rates raise the opportunity cost of holding it and reduce its appeal to investors.

According to the CME FedWatch tool, traders now assign around a 79.6% probability to a December Fed rate increase, up from 72.8% before the US employment release.

Independent metals trader Tai Wong said: "Gold gapped lower on a stellar employment report (that was) strong across the board, but is trying to claw back higher. This is a litmus test for this week's rally,"

Gold holds in consolidation as equity selling challenges safe-haven demand

A recovery in oil prices and a degree of stability in the Dollar have constrained gold’s upward momentum, according to OCBC analysts. They say the metal “pared earlier gains after rising to a two-week high above 4140 at one point overnight,” although “softer US Treasury yields continued to lend support.” The analysts urge caution, noting that “the deepening selloff in AI and semiconductor stocks warrants some near-term caution,” and adding that “should equity weakness trigger broader deleveraging, gold may not be spared from liquidity-driven selling as investors raise cash.”

Nevertheless, OCBC takes encouragement from the metal’s performance, stating that “gold’s relative resilience despite the sharp equity selloff is encouraging.” The analysts suggest that “following the recent correction and reduction in speculative positioning, gold may be gradually regaining some of its safe-haven appeal, potentially providing shelter amid turbulence elsewhere in financial markets,” while cautioning that “the extent to which gold can hold up if equity weakness persists will be an important test.”

Looking ahead to the imminent data releases, OCBC’s assessment is that “some consolidation remains likely ahead of US payrolls report tonight.” The analysts see scope for further gains, arguing that “softer employment data could further temper Fed tightening expectations, weigh on yields and USD, and allow gold’s recovery to extend,” and identify “next Tuesday’s US CPI” as “another key test, while oil prices remain an important driver of inflation and rate expectations.” On the technical outlook, they report that “gold last seen at 4088 levels,” and observe that “daily momentum turned mild bullish but rise in RSI moderated,” concluding that “consolidation [is] likely after the recent sharp rebound.”

Technical Analysis: Gold struggles to clear the 100-day SMA

Below the 100-day simple moving average (SMA), XAU/USD continues to face resistance on the daily chart within a broadly bearish short-term backdrop. A modest premium to the 20-day Bollinger band middle line points to some underlying buying interest, although the nearby upper band signals substantial resistance overhead. At 50.30, the Relative Strength Index (RSI) is close to neutral, suggesting the recent recovery does not yet have sufficient momentum to mount a decisive challenge to the prevailing resistance structure.

The first upside hurdle is the 100-day SMA at $4,200, ahead of the upper Bollinger band near $4,225. Buyers would need to regain this zone to temper the current bearish bias. Initial support lies around $4,095, near the current price, while the Bollinger middle band at $4,065 provides a base for the short-term trading range. A steeper decline would bring lower-band support around $3,900 into view, where sellers might adopt a more cautious approach.

(The technical analysis of this story was written with the help of an AI tool. Know more.)