Gold experienced a sharp and aggressive decline following Friday’s Non-Farm Payroll (NFP) release. The precious metal dropped from around 4471 to a low near 4310, wiping out more than 160 points in a matter of hours. At the time of writing, Gold is trading around 4328, showing only a limited recovery from the selloff.
The stronger-than-expected U.S. employment data strengthened the U.S. Dollar and reduced expectations of near-term Federal Reserve rate cuts. As a result, investors rushed out of Gold positions, triggering heavy selling pressure across the market.
While many traders may be looking for buying opportunities after such a significant drop, caution is advised. Large one-day moves often create unstable market conditions, and the first trading day of the week can be particularly difficult to predict. Liquidity conditions during the Asian session are typically lower, and sudden price swings can occur as the market digests Friday’s move.
For this reason, I prefer to avoid trading Gold during Monday’s Asian and London sessions. The market may continue to experience volatile and erratic price action before establishing a clearer direction. Waiting for confirmation and allowing the market to stabilize can often be a smarter approach than chasing early moves.
Key Levels to Watch:
• Resistance Zone: 4350 – 4380
• Major Resistance: 4400+
• Support Zone: 4310 – 4300
• Breakdown Area: Below 4300
As always, risk management should remain the top priority. After such a significant selloff, preserving capital is more important than forcing trades in uncertain market conditions.
Remember: Opportunities will always be available, but protecting your trading capital comes first.
