On October 5, last Friday's nonfarm payrolls came in at only 29,000 new jobs, far below the expected 90,000, a strongly bullish reading for gold that initially drove prices up to 4228, but a wave of heavy selling quickly erased those gains, with gold rapidly piercing the prior high of 4220 before failing to hold and plunging to around 4125, returning the metal to its previous broad trading range.

The low of 4125 reached after Friday's post-nonfarm pullback now serves as a key support level today, and a first test there could spark a rebound, but a break below would almost certainly lead to further downside, in which case 4110 would be difficult to defend and a faster decline could open up, while on the resistance side, the first key barrier sits in the 4260/70 dollar zone, and for gold to genuinely reverse its weakness, holding above that area is the primary prerequisite.

On the hourly chart, gold printed three large bearish candles on Friday, with the top of the final one near the prior resistance-turned-support level around 4165, and in today's Asian session gold rebounded to 4163 before stalling, at which point a direct short from 4158 was flagged, with prices now around 4135 and profits taken, and the focus ahead is on whether last Friday's low of 4125 holds, since a pullback that finds support there would justify a short-term long, followed by attention to the 4160/70 zone for a potential short once resistance caps the bounce.