Gold prices tumbled to near $4,388 during early Asian trading on Monday, extending their decline as robust US employment data reinforced expectations for a Federal Reserve rate hike this month. The precious metal's downward trajectory was triggered by Friday's Nonfarm Payrolls report, which showed the US economy added 162,000 jobs in August, a significant acceleration from July's upwardly revised 21,000 and well above the 56,000 consensus forecast. That unexpectedly strong labor market reading has bolstered the case for further monetary tightening, diminishing the appeal of non-yielding assets like gold. Independent analyst Tai Wong noted that after a blockbuster headline figure and generally strong report, the likelihood of a September rate hike has risen significantly unless we see a weak CPI report, with gold prices suffering a notable setback as a result. Traders are now looking to this week's Producer Price Index and Consumer Price Index inflation reports for additional clues about the Fed's policy path. Meanwhile, geopolitical developments in the Middle East are adding another layer of complexity to the gold market. Bloomberg reported that Iran attacked three oil tankers and multiple US-linked vessels via an unauthorized route through the Strait of Hormuz over the weekend, retaliating for a US attack on Iranian tankers. That escalation has raised concerns about oil-driven inflation, which could put further downward pressure on gold prices by reinforcing the case for tighter monetary policy. Commerzbank noted that the latest round of gold price movements reflects growing doubts about whether the Fed will ultimately raise rates at its September meeting, adding that these concerns have been primarily driven by recent comments from Fed Governor Christopher Waller, which prompted markets to reassess the possibility of further tightening and in turn helped underpin the recent gold rebound.
Gold is currently trading near $4,400. On the hourly chart, the 50-period moving average sits at $4,450, while the 200-period moving average is positioned at $4,490. Price is currently trading below both averages, indicating that near-term momentum has shifted in favor of sellers. The fact that price has broken beneath these levels suggests that buyers have lost the upper hand in the immediate timeframe, and any recovery attempt would need to reclaim these averages to regain bullish traction. The 50-period average is now acting as overhead resistance, while the 200-period average provides a more distant ceiling. The widening separation between price and these averages suggests that the short-term downtrend is gaining momentum. Stepping back to the four-hour chart, the 50-period moving average resides at $4,475, while the 200-period moving average rests lower at $4,330. Price is currently trading between these two levels, below the 50-period but above the 200-period, a configuration that signals a short-term pullback within a broader uptrend. The 50-period average is acting as overhead resistance, while the 200-period average provides a safety net just beneath current levels. The pair's ability to hold above the $4,330 level will be crucial in determining whether the broader bullish structure remains intact. Immediate resistance is spotted at $4,425, marking the session's peak and a level that has repeatedly capped upside attempts. Above that, the next supply band stretches from $4,450 to $4,470, followed by a heavier barrier at $4,490. If buyers manage to push through these levels, the market could advance toward $4,520 and $4,550. On the downside, the first support floor sits at $4,365, a level that has provided a cushion during recent pullbacks. Losing that footing would open the door to $4,340, then $4,310, which aligns with the recent swing low and represents a key support zone. Further down, $4,280 and $4,250 represent deeper demand pockets, with the latter offering a more substantial safety net near the four-hour 200-period moving average. Looking ahead, if gold can hold above $4,365 and reclaim the hourly 50-period moving average at $4,450, buyers may stage a recovery attempt toward $4,425 and beyond. However, if selling pressure intensifies and price breaks below $4,365, a deeper correction toward $4,340 and $4,310 becomes increasingly likely. The broader uptrend remains intact as long as price holds above the four-hour 200-period moving average at $4,330, but near-term direction will depend on whether buyers can defend current support levels and how markets digest the upcoming inflation data and Fed signals.
