Gold Prices Plummet Amid US Jobs Data and Rate Hike Expectations

Gold and silver prices plummeted on the Multi Commodity Exchange as stronger-than-expected US jobs data reinforced expectations of higher interest rates. The US Labor Department reported that job growth accelerated sharply in August, with the unemployment rate remaining steady at 4.1%. This improvement in the labor market kept a rate increase at the Federal Reserve's September meeting on the table.

The upcoming US producer price index (PPI) data on Thursday and consumer price index (CPI) on Friday will provide further clarity on the Fed's policy outlook. Investors await these key events, with the current market sentiment pricing in a 58.4% chance of a rate hike at the Fed's September 15-16 meeting.

Higher interest rates tend to reduce the appeal of non-yielding bullion, making gold less attractive as an inflation hedge. As a result, spot gold fell 0.5% to $4,405.47 per ounce, and US gold futures for December delivery declined by 0.5% to $4,452.20.

Gold and silver have fallen Rs 3,600 and Rs 6,000, respectively, over the past two sessions. Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, notes that gold has support near $4,280 and resistance near $4,520, with a clear break above $4,520 needed to signal resumption of the uptrend.