Gold Slumps as Jobs Report Favors September Rate Hike

Gold prices plummeted by over 2% on Friday after a stronger-than-expected August US jobs report increased speculation about a Federal Reserve interest rate hike in September. The employment data showed hiring picked up in August and unemployment remained at 4.1%, solidifying the possibility of a rate increase.

The Bureau of Labor Statistics' report pushed derivatives tied to the Fed's policy rate towards a 65% chance of a hike at the upcoming September 15-16 meeting, up from about 55% before the release.

This shift in expectations has significant implications for gold investors. Since gold doesn't pay interest, it tends to lose appeal when investors anticipate higher returns on short-term instruments.