Gold Prices Fall Under Pressure from Stronger US Jobs Data

Gold prices have been under pressure due to stronger-than-expected US jobs data, which has revived expectations of higher interest rates. This has complicated the Federal Reserve's policy path and increased the possibility of a rate hike this month.

The latest labour market data showed that nonfarm payrolls increased by 162,000 in August, nearly three times the Street's forecast of around 53,000. This represented the strongest monthly gain since March.

Ashish Rajodiya, Commodity Research Analyst at PL Capital, noted that the stronger employment reading pushed market-implied odds of a September Fed rate hike to around 59-60%, compared with about 50% before the report.

Rajeev Sharan, Head of Research at Brickwork Ratings, expects gold prices to remain under pressure over the next two weeks. He pointed to healthy FCNR(B) deposit inflows as one factor that has helped the rupee remain strong, with a stronger rupee generally keeping domestic gold prices in check even when global gold prices remain stable.