Gold Prices Plummet Amid Strong Jobs Data and Rising Dollar
The US dollar's decline yesterday was short-lived as the jobs data for August showed stronger-than-expected numbers, increasing the odds of a Fed rate hike in September.
On Thursday, gold prices surged to their best day in weeks after Fed Governor Waller said he would lean towards holding off on a rate hike if August inflation shows progress. However, this optimism was short-lived as the August payrolls printed 162,000 against a consensus of 55,000, pushing the odds of a hike back above 60%.
Gold prices plummeted by almost as much as they had rallied yesterday, and silver led the decline, falling faster than gold. This morning's move is similar to what was seen in mid-August, with both consolidations potentially being the shoulders of a head-and-shoulders top formation.
The dollar held its retracement level based on the late-August rally, reversing higher on the payrolls data. The yen remains near 155, and the Bank of Japan is still expected to hike on September 18, but the dollar is rising anyway.