Gold prices fell back during trading on Friday, touching around $4,135 an ounce before moving closer to $4,145, in a sharp reversal of the gains the metal had made following the release of US labor market data.
Gold had earlier jumped to around $4,223 an ounce after data showed the US economy added only 29,000 jobs in September, a much weaker reading than expected, which initially led to a decline in expectations of a US interest rate hike and supported the yellow metal.
But gold failed to hold onto these gains, and selling pressure quickly returned to the market, making the $4,135–$4,110 level an important area to watch in the coming hours.
The sharp decline after the rebound confirms that the gold market remains highly volatile, and that weak jobs data alone has not yet been enough to reverse the short-term trend. Holding below $4,200 keeps the pressure on the market, while a break below the $4,135–$4,110 area could increase the bearish momentum. Conversely, a return to $4,200 would be an initial sign of improving momentum.