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  • The US economy added 136K jobs in September and the unemployment rate fell to a 50-year low.
  • Softer earnings growth data was largely offset by an upward revision of the previous month’s reading.
  • Recovering US bond yields, equities, a modest USD uptick – all contributed to the intraday downfall.

Gold finally broke down of its daily consolidative trading range and tumbled to levels below key $1500 psychological mark post-US jobs data.
 
The precious metal initially ticked higher and refreshed daily tops near the $1515 region in reaction to a slight disappointment from the headline NFP print, showing that the US economy created 136K jobs in September as against 145K expected.

Mostly upbeat US jobs report exert fresh pressure

However, the fact that last month’s reading was revised higher sharply, now showing an addition of 168K jobs as compared to 130K reported earlier, provided a modest lift to the US Dollar and exerted some pressure on the dollar-denominated commodity.
 
Adding to this, the US unemployment rate unexpectedly dropped to 50-year low level of 3.5% from 3.7% previous, which helped offset average hourly earnings growth data and raised hopes that the economy can avoid a recession.
 
The US Treasury bond yields recovered a major part of their early slide to one-month lows and the US stocks rose in reaction to mostly upbeat employment detail, which further collaborated towards driving flows away from the non-yielding yellow metal.
 
Meanwhile, possibilities of some short-term trading stops being triggered on a sustained break below the Asian session swing lows support, near the $1505-04 region, further aggravated the intraday bearish pressure surrounding the precious metal.
 
It will now be interesting to see if the commodity is able to attract any fresh buying at lower levels or the current pullback marks the end of this week’s goodish rebound from near two-month lows and sets the stage for a further intraday downfall.

Technical levels to watch