Gold prices rebounded on Monday, nearing their highest point in three weeks as investors assessed the impact of stronger-than-expected US jobs data and awaited the upcoming inflation report scheduled for Tuesday. The price of gold jumped to $4,130, a rise of over 7% from its lowest level recorded this year.
Stronger US jobs data and market reaction
On Monday, the Bureau of Labor Statistics (BLS) reported that the US economy added 165,000 jobs in October, surpassing analyst predictions. The unemployment rate declined to 4.1%, slightly below the 4.2% analysts had projected. Wage growth also showed steady gains during the month.
These labor market figures increased market expectations that the Federal Reserve may raise interest rates at its December meeting. Should a hike occur, the new policy rate would rise to a range between 4% and 4.25%, which typically dampens gold’s appeal as a non-yielding asset.
Investor sentiment around gold remains buoyant, even as the Federal Reserve is anticipated to act on interest rates in December, potentially lifting the rate to between 4% and 4.25%.
US bond yields continued to climb amid these expectations, with the ten-year yield reaching 4.8% and the five-year yielding 4.675.
Investors now look ahead to the latest US consumer inflation data, which is expected to show moderated monthly price increases but is still projected to remain above the Federal Reserve’s 2% target for October.
Geopolitical risks in the Middle East have also contributed to gold’s recovery. Tensions around Iran remained subdued over the weekend, despite concerns that US President Donald Trump might initiate military action—a move seen as likely to affect oil prices significantly. However, instead of taking military steps, Trump announced an economic campaign to restrict trade between Iran and its 14 neighboring countries.
Amid these developments, crude oil prices barely shifted on Monday, with Brent rising to $97 and West Texas Intermediate (WTI) reaching $90. Prior to this, some investors had feared a military escalation would follow the midterm elections.
Gold’s fundamentals have also supported its recent momentum. Among these, US public debt levels have broken new records, surpassing $40.5 trillion only a few months after passing the $40 trillion milestone. Projections point to the US public debt reaching $41 trillion early next year.
Mini dictionary: The Bureau of Labor Statistics (BLS) is a division of the US Department of Labor responsible for collecting, analyzing, and publishing essential economic information, especially on labor market activity, working conditions, and price changes in the US economy.
Technical outlook for gold prices
Technical analysis indicates that gold reached a low of $3,872 last month before reversing course. The price currently stands at $4,123, slightly exceeding a key resistance level at $3,937, which represented its lowest swing in June.
A double-bottom pattern—where prices touch a low point twice before rebounding—has formed, with its neckline at $4,692, a peak seen in August. This chart formation is often associated with bullish reversals, strengthening the outlook for further gains.
If gold maintains momentum above $4,000, analysts see the potential for a rise toward the next resistance at $4,300. However, a move below $4,000 could invalidate this positive outlook.
| Key Price Level | Status/Significance |
|---|---|
| $3,872 | Last month’s low |
| $3,937 | Recent resistance (June swing low) |
| $4,123 | Current price |
| $4,300 | Next key resistance |
| $4,000 | Support level; below this invalidates bullish outlook |
| $4,692 | Double-bottom neckline (August high) |
