Gold Slumps as Strong US Jobs Data Puts Rate Hike Bets into Overdrive

Gold prices fell on Friday after strong US jobs data boosted expectations of an interest rate hike by the Federal Reserve, making gold less appealing. Spot gold dropped 1.1% to $4,422.91 per ounce at 10:50 a.m. EDT (1447 GMT), putting it on track for a mild weekly decline.

The US labor market showed a sharp acceleration in job growth in August, while the unemployment rate remained steady at 4.1%. This has increased the likelihood of an interest rate hike by the Fed this month.

Independent analyst Tai Wong said that gold stumbled badly after the strong jobs report, making a September rate hike more likely unless there is a weak CPI report next week.