Gold Price Under Pressure as Strong US Jobs Data Boosts Rate Hike Bets

The gold price remains under pressure as strong US jobs data boosts expectations of a Federal Reserve rate hike in September. The latest employment report showed nonfarm payrolls increased by 162,000 in August, surpassing expectations for an increase of just 55,000. The unemployment rate remained steady at 4.1%, and the Labor Force Participation Rate also rose.

The stronger labor market has heightened expectations that the Federal Reserve could raise interest rates next month. Markets are now pricing in around a 58% chance of a rate increase, which would weigh on gold due to its lack of interest income. The precious metal is already under pressure after its recent decline, and rising oil prices have added another layer of uncertainty.

The US Dollar has continued to decline despite stronger employment data, helping to limit further pressure on gold. However, markets now focus on the upcoming US inflation figures, which could either increase or reduce expectations for a September rate hike. A stronger inflation report would likely strengthen rate hike bets and put more downward pressure on gold.