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Gold closes the week at $4,140 as weak payrolls fail to break the sell-off

What moved overnight

Friday's session was the story. September nonfarm payrolls came in at just 29,000 against expectations near 90,000, and the unemployment rate ticked up to 4.2% from 4.1%. Revisions took another 60,000 jobs out of the prior two reports, with July flipping to a 10,000-job loss. Gold spiked more than 1% on the print as October Fed hike odds collapsed from around 70% earlier in the week to roughly 14-22%.

The rally did not hold. A firm dollar and record Treasury yields did the heavy lifting through the rest of the session. The 10-year yield touched 5.34% on Thursday, its highest since 2002, settling near 5.25% on Friday. The dollar index spiked to a session high around 102.13, eased to about 101.74 after the jobs data, and still finished the week higher, holding above its 50-day moving average near 99.94. Spot gold gave back the early gains and closed around $4,140-4,146, down roughly 0.8-0.9% on the day. US gold futures settled at $4,162.30, down about 0.9%. For the week, gold lost about 3.4%, its second straight weekly decline.

One cross-current worth watching: reports say Iran is preparing a broader and more forceful response if the US resumes large-scale military attacks, keeping the Strait of Hormuz and energy prices a live geopolitical risk into the week.

Levels I'm watching

$4,110this week's low, the floor underneath if selling resumes
$4,138-4,142Friday's close zone, recent support that is now first resistance on any Monday bounce
$4,230the 61.8% retracement level where Friday's post-payrolls spike stalled
$4,319-4,327the 50% retracement and the 50-day moving average stacked together, the ceiling for any real recovery

Today's calendar

Sunday: markets are closed. OPEC+ meets today. China remains on Golden Week holiday through October 7, so Asia liquidity stays thin.

Monday: final S&P Global services and composite PMIs at 9:45 AM ET; September ISM Services at 10:00 AM ET.

Tuesday: August trade balance at 8:30 AM ET; Fed speakers Williams, Bowman, Logan.

Wednesday: FOMC minutes from the September 15-16 meeting at 2:00 PM ET.

Thursday: jobless claims at 8:30 AM ET.

Friday: University of Michigan consumer sentiment at 10:00 AM ET.

Further out: September CPI drops October 14; next FOMC decision at the end of October. Traders are pricing a high probability of another hike in December.

The read

The jobs report gave gold every excuse it needed, weaker payrolls, lower hike odds, a softer dollar, and it still could not get through $4,230. That tells me the path of least resistance is still lower while the 10-year sits above 5% and the dollar holds its gains. I am watching $4,110 first. Until the bond market stops selling off, rallies in gold are fades, not trend changes.

Not financial advice. Educational commentary only. You make your own trading decisions.