Gold Prices Slide as US Jobs Data Boosts Rate Hike Odds to 60%
Gold prices extended their decline after stronger-than-expected U.S. employment data lifted expectations for a Federal Reserve interest-rate increase in September. The odds of a rate hike now stand at about 60%, with markets pricing in higher rates as a negative factor for gold.
The sharp increase in payrolls and stable unemployment rate reported on September 4 bolstered the case for a Fed rate increase, which could lead to tighter monetary policy. This is typically bearish for gold, as it does not pay interest and higher rates tend to weigh on prices.
Market analyst Hebe Chen at Vantage Markets noted that gold is moving back into the center of another macroeconomic storm, with surging oil prices, elevated U.S. Treasury yields, and strong jobs data reviving familiar headwinds for bullion.