Investors waiting for an opportunity to enter the gold market found their chance on Friday, when the US released an unexpectedly strong employment report for January. The data said 517,000 jobs were created in January, well above the expected gain of around 193,000. This led to prices falling by more than 2%.

However, some analysts said there was a downside risk because the growing momentum in the US labor market could force the Fed to keep its aggressive policy longer than expected. The central bank mentioned before that it needs to see a softening of the labor market before they become confident that inflation is under control.

A survey was conducted last week in which 44% of participants were bearish in the short term. 17% were optimistic, while 39% believe that prices will trade horizontally. There was also an online poll, where 61% said gold will rise this week. 25% said the price will fall, while 14% were neutral.

This mixed view on gold is due to the fact that prices fell by 3.5% at the end of the week. It went under $1,900 an ounce, making analysts foresee support around $1,850 an ounce.

Bannockburn Global Forex managing director Marc Chandler said gold's correction could last until February 14, when the next inflation data will be released. This could give the Fed an opportunity to slow its aggressive monetary policy. Darin Newsom, a senior technical analyst at Barchart.com, said $1,850 could be the first stop in this correction.

However, some analysts, such as Adrian Day, president of Adrian Day Asset Management, see near-term downside potential for gold prices.