Gold Prices Plummet as Strong Jobs Report Boosts Rate Hike Bets
Gold prices plummeted on Friday after a stronger-than-expected US jobs report sent interest rate hike bets soaring. The Federal Reserve's next meeting is now seen as increasingly likely to raise rates, with futures prices implying a 65% chance of an increase at the September 15-16 meeting.
The data showed US job growth accelerated sharply in August, while the unemployment rate held steady at 4.1%. This has made a September rate hike much more likely, according to independent analyst Tai Wong.
Gold prices fell as much as 2% to an intraday low of $4,364.99 per ounce, with spot gold down 1.1% to $4,422.91 per ounce. US gold futures for December delivery dropped 1.5% to $4,469.80 per ounce.
The focus now shifts to next week's US consumer and producer price inflation data, which could provide further clues on the Federal Reserve's policy path. Analysts note that this latest jobs report follows Chair Warsh's hawkish speech at Jackson Hole and has cracked open the door for a rate hike as soon as this month.