Gold Faces Fresh Selling Pressure Ahead of US Jobs Report

Summary:

Gold falls below $3,900 as stronger US manufacturing activity reinforces expectations of further Fed tightening and pushes bond yields higher. Markets now turn to US labour-market data and the midterm elections for fresh direction.

Sell XAUUSD

EXP

Trading

3905.00

ENTRY

3725.00

TGT

4100.00

3956.37 +9.60 +0.24%

Point

Flat

3725.00

TGT

CLOSING

3905.00

ENTRY

4100.00

Gold prices came under renewed pressure on Tuesday, slipping below the $3,900 mark during European trading as stronger-than-expected US manufacturing data reinforced expectations that the Federal Reserve may maintain a tighter monetary policy stance. The latest decline puts bullion at risk of revisiting its lowest levels since October 2025, recorded last week, as rising US bond yields increase the opportunity cost of holding a non-yielding asset.

The main pressure came from Monday’s ISM Manufacturing PMI, which climbed to 55.5 in October from 54.5 in September, exceeding market expectations and marking the sector’s tenth consecutive month of expansion. The stronger reading has strengthened the argument for continued monetary restraint, making it more difficult for gold to attract buyers. Although the US Dollar has struggled to gain meaningful traction ahead of the midterm elections, the recovery in Treasury yields has been sufficient to weigh on bullion.

Political uncertainty is adding another layer of complexity to the currency and precious metals markets. Prediction markets currently favour a Democratic victory in both chambers of Congress, while an unexpected Republican sweep could trigger a stronger reaction in Treasury yields and the Dollar. At the same time, hopes of a diplomatic breakthrough between Washington and Tehran are limiting aggressive demand for the Greenback. President Donald Trump indicated that Iran was interested in reaching an agreement, while Iranian Foreign Minister Abbas Araqchi described consultations through mediators as intensive.

However, the diplomatic picture remains uncertain. Negotiations involving Iranian officials and Qatari mediators have yet to produce a breakthrough, despite proposals concerning the temporary reopening of the Strait of Hormuz. Meanwhile, renewed tensions between Russia and Ukraine continue to sustain geopolitical uncertainty. These competing developments leave gold caught between reduced demand for defensive assets and persistent concerns about a potential escalation in global conflicts.

For now, the balance of risks appears tilted against bullion. Stronger US economic activity and expectations of further Fed tightening are providing a more immediate influence on prices than geopolitical uncertainty. The upcoming US JOLTS Job Openings report could offer another indication of labour-market conditions, but Friday’s Nonfarm Payrolls report is likely to carry greater weight. Unless incoming data weakens the case for tighter monetary policy or revives expectations of rate cuts, gold may struggle to establish a convincing recovery above $3,900.

Technical Analysis

Gold remains firmly bearish on the H4 chart, with price action continuing to form lower highs and lower lows following the breakdown from the 4,200 region. The recent decline has pushed bullion below the 4,080 support zone and subsequently through the 3,970 area, confirming that sellers are maintaining control. Although price has attempted a recovery from around 3,869, the rebound has so far failed to establish a meaningful bullish reversal.

The immediate resistance area sits around 3,940–3,975, where the previous support zone has turned into potential selling territory. Gold's latest recovery toward this region was met with renewed selling pressure, suggesting that buyers are struggling to regain momentum. A rejection below this resistance would reinforce the bearish structure and could expose the recent low around 3,869. A decisive break beneath that level would open the way toward the next downside target near 3,720.

The preferred scenario is a temporary recovery toward the 3,940 region followed by another bearish move. However, a sustained H4 close above 3,975 would weaken this setup and could expose the higher resistance around 4,060–4,080. For now, the broader structure favours selling rallies rather than attempting to catch a bottom, particularly while price remains below the broken support zone.

TRADE RECOMMENDATION

SELL XAU/USD

ENTRY PRICE: 3905.00

STOP LOSS: 3980.00

TAKE PROFIT: 3725.00

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Warren Takunda

Analysts

Warren Takunda, a seasoned finance leader specializing in the Middle East, is a trusted senior analyst with a proven track record. As head of the finance team, he excels in financial planning, analysis, and reporting. Warren's expertise in financial modeling and investment analysis delivers valuable insights to clients.

Rank

Articless

3200

Win Rate

63.82%

P/L Ratio

0.73

Focus on

XAUUSD, GBPUSD, EURUSD

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