The July non‑farm payrolls data released on Friday showed negative growth, which significantly cooled market expectations for further Fed rate hikes. U.S. Treasury yields and the U.S. Dollar Index fell in tandem. Boosted by this, gold surged to around $4371 and closed firmly above the $4300 threshold.

Nevertheless, excessive optimism is unwarranted amid the rally. The RSI indicator has entered overbought territory. This upward move has been driven largely by short‑covering, building up substantial profit‑taking positions in the market. Selling pressure from profit realization should not be underestimated, and a pullback could be triggered at any time.

From a fundamental perspective, core inflation has not seen a meaningful decline. Although the Fed has slowed its rate‑hiking pace, multiple officials have signaled that further rate hikes remain on the table. The high‑interest‑rate environment is far from over. Besides, no high‑impact economic data is due out next Monday, so market sentiment will tend toward caution. Investors will turn their focus to Wednesday’s CPI inflation report.

All things considered, chasing highs blindly is not recommended for Monday. The market is more likely to enter a consolidative phase with a mild bearish tilt. After a sharp rally, pullback risks are building, and short‑selling opportunities have emerged at current levels.

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