Gold Tumbles as Strong Jobs Data Bolsters Rate Hike Bets

Gold prices edged lower on Monday as strong US jobs data reinforced expectations for higher interest rates. The metal's appeal is often seen as an inflation hedge, but it tends to lose value when interest rates rise.

Spot gold was down 0.5% at $4,405.47 per ounce, while U.S. gold futures for December delivery were also down 0.5% at $4,452.20.

The latest US jobs data showed a sharp acceleration in job growth in August, with the unemployment rate holding steady at 4.1%. This has kept a rate increase this month on the table and put pressure on gold.

Traders are pricing in a 58.4% chance of a rate hike at the Fed's September 15-16 meeting, according to CME's FedWatch tool. A strong inflation print due later this week would reinforce expectations of a Fed hike and weigh more heavily on gold.