Gold falls as strong US jobs data boosts rate-hike expectations

Tehran - BORNA - Spot gold dropped 1.2% to $4,419.09 an ounce.

The precious metal fell more than 2% after the US jobs report was released, touching an intraday low of $4,364.99.

US gold futures for December delivery settled 1.4% lower at $4,476.60 an ounce.

US employment growth accelerated sharply in August, while the unemployment rate remained unchanged at 4.1%, pointing to continued resilience in the labor market and keeping the possibility of a Federal Reserve rate increase this month in focus.

The US dollar jumped after the report. A stronger dollar makes greenback-priced gold more expensive for holders of other currencies.

Independent metals trader Tai Wong said gold retreated sharply because the very strong jobs data and broadly favorable labor-market report increased the probability of a September rate hike, unless the upcoming US consumer price index report comes in weak.

Short-term interest-rate futures now imply roughly a 65% chance of a US rate increase at the Fed’s Sept. 15-16 meeting, up from about 55% before the Bureau of Labor Statistics report was released.

Investors are now turning their attention to US consumer and producer price inflation data due this week for further clues about the Federal Reserve’s policy path.

Han Tan, chief market analyst at crypto exchange Bybit, said the latest jobs report, coming after Federal Reserve Chair Kevin Warsh’s Jackson Hole speech, had increased the likelihood of a Fed rate hike, potentially as soon as this month.

He added that with price stability remaining policymakers’ main priority, the upcoming US CPI data could have a significant impact on gold prices.

Among other precious metals, silver fell 1.7% to $65.83 an ounce, palladium dropped 2.5% to $1,385.50, and platinum declined 0.8% to $1,810.96.

All three metals also posted weekly losses.

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