Spot gold broke back above $4,100 an ounce in early Asian trading on Monday, recovering ground lost after stronger-than-expected United States jobs data sent the metal sharply lower at the end of last week.

The metal reached $4,101.26 an ounce, up 0.76% on the day, as trading resumed for the new week. Gold then held near the $4,100 level during the early Asian session, clawing back losses suffered when Friday's employment report landed.

The rebound came despite a jobs report that, on the face of it, was bad news for gold. The US economy added 165,000 jobs in October, according to the Bureau of Labor Statistics, up from 60,000 in September and far above the 65,000 economists had expected. The unemployment rate fell to 4.1%, down from 4.2% in September.

Stronger hiring reinforced expectations that the Federal Reserve will keep interest rates higher for longer, or even raise them. Traders now see around 79.6% odds of a rate rise in December, according to the CME FedWatch tool, up from 72.8% before the jobs report. Higher rates raise the cost of holding gold, which pays no interest, and tend to support the dollar.

Even so, buyers stepped back in. Independent metals trader Tai Wong said gold had "gapped lower on a stellar employment report (that was) strong across the board, but is trying to claw back higher", calling the move "a litmus test for this week's rally".

Political developments in Washington also supported the metal. Bloomberg reported that Democrats, who won majorities in both the House and Senate in the midterm elections, are strongly opposed to President Donald Trump's proposed $1.5 trillion defence budget and appear determined to block it. A source familiar with the discussions indicated Democrats were likely to approve a figure of only around $1 trillion, anxious not to be seen funding continued war against Iran. Speculation that the incoming Congress will push to end the Iran war lifted gold, which investors buy as a shelter in times of geopolitical tension.

Analysts at OCBC noted that gold had risen to a two-week high above $4,140 at one point overnight before paring gains, with a rebound in oil prices and some stabilisation in the dollar limiting further upside, even as softer US Treasury yields continued to lend support. They warned that the deepening sell-off in artificial intelligence and semiconductor shares warranted some near-term caution, adding that if weakness in equities triggered broader selling to raise cash, gold might not be spared. But they also described gold's relative resilience despite the sharp equity sell-off as encouraging, suggesting the metal may be gradually regaining some of its safe-haven appeal after the recent correction and a reduction in speculative positioning.

On technical levels, gold was last seen around $4,088, with immediate resistance at the 100-day moving average near $4,200 and the upper Bollinger band around $4,225. Support sits near $4,095, with the middle Bollinger band at $4,065 and a deeper floor near $3,900.

For European investors, the metal's recovery sets the tone ahead of the London open, with gold miners among the FTSE 100's most watched shares whenever bullion moves sharply. The next major test comes on Tuesday, when the United States publishes October consumer price data, a release that could reshape expectations for interest rates and, with them, the direction of gold.