Gold Tumbles as Strong US Jobs Data Boost Rate-Hike Bets

Gold prices declined on Monday as strong US jobs data reinforced expectations of higher interest rates. The robust employment figures led to a surge in rate-hike bets, with traders pricing in a 58.4% chance of a Fed hike at the September 15-16 meeting.

The data showed that US job growth accelerated sharply in August, while the unemployment rate remained steady at 4.1%. This improvement in the labor market kept a rate increase this month on the table and put pressure on gold prices.

Market participants are now awaiting key US inflation prints due later this week for further clarity on the Federal Reserve's policy path. The Producer Price Index (PPI) data is scheduled to be released on Thursday, followed by the Consumer Price Index (CPI) data on Friday.

According to Tim Waterer, chief market analyst at KCM Trade, a strong inflation print would reinforce expectations of a Fed hike and weigh more heavily on gold. While gold is typically viewed as an inflation hedge, higher interest rates tend to reduce its appeal due to the opportunity cost of holding non-yielding bullion.