Fed Hawks Take Charge as Gold Tumbles on Strong Jobs Report

Gold prices took a hit on Monday after the US jobs report exceeded forecasts. The XAU/USD pair fell over 0.40% to $4,412, with some traders speculating that this could signal the Federal Reserve's return to tightening monetary policy if inflation reaccelerates in the coming days.

The strong payrolls data showed a gain of 162K jobs in August, significantly higher than the expected 56K. The Unemployment Rate remained steady at 4.1%. This sparked an increase in US Treasury yields and pushed the US Dollar Index up 0.25% to 98.91.

The reaction was swift, with money markets raising the odds of a Federal Reserve interest rate hike at the September 15-16 meeting to 60%, according to Prime Terminal.