Gold Falls Over 2% as Strong Jobs Data Boosts Rate Hike Expectations

Spot gold took a hit on Friday, falling by over 2% after stronger-than-expected U.S. jobs data was released, which boosted expectations of an interest rate hike from the Federal Reserve this month.

The August jobs report showed that job growth accelerated sharply while the unemployment rate remained steady at 4.1%, indicating a still stable labor market and making it more likely for the Fed to raise rates in September.

Independent analyst Tai Wong said, 'Gold stumbles badly as a huge headline print, and an overall strong report, makes a September rate hike much more likely unless we get a weak CPI report.'

Short-term interest-rate futures prices now imply about a 65% chance of an increase in the U.S. policy rate at the Fed's September 15-16 meeting, up from around 55% before the Bureau of Labor Statistics report.