Gold Prices Under Pressure as Strong US Jobs Data Revives Rate Hike Expectations
Gold prices have been under pressure due to stronger-than-expected US jobs data, which has revived expectations of higher interest rates. The latest labour market data has complicated expectations around the Federal Reserve's policy path, with a rate increase this month still on the table.
The employment reading showed 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. The unemployment rate remained at 4.1%, exactly as expected, while average hourly earnings increased 3.1% year-on-year.
Experts predict that gold prices will remain under pressure over the next two weeks, with the September 16 Federal Reserve decision being a key trigger. A rate hike or even a hawkish hold could lift Treasury yields and make non-yielding gold less attractive, according to Rajeev Sharan of Brickwork Ratings.
Gold's near-term direction is likely to depend on how investors balance expectations for interest rates against geopolitical and inflationary risks. The US economic data calendar will be crucial in determining the next important triggers.