Gold Tumbles as Strong US Jobs Data Boosts Rate Hike Expectations

Gold prices fell on Monday following a stronger-than-expected US jobs report. The data showed that employers added 162,000 jobs in August, exceeding market expectations and reducing concerns about tighter monetary policy hurting the labor market.

The Federal Reserve now has more room to focus on inflation, which could lead to higher interest rates. Futures markets are assigning a 58% probability to a rate increase at the September 15-16 meeting, according to current estimates.

Peter Grant, senior metals strategist at Zaner Metals, believes that persistently firm inflation data this week could strengthen expectations for another Fed increase, putting additional pressure on gold. The metal generates no income, making higher rates a headwind.