Gold Tumbles as Strong US Jobs Data Raises Fed Rate Hike Bets
The price of gold fell to near $4,395 on Monday during the early Asian session as strong US jobs data increased the likelihood of a Fed rate hike. The US Nonfarm Payrolls (NFP) climbed by 162K in August, exceeding market expectations of 56K and beating July's increase of 21K.
Independent analyst Tai Wong stated that gold 'stumbles badly' due to the robust jobs data, which makes a September rate hike more likely unless there is a weak Consumer Price Index (CPI) report. Traders will be looking at the US Producer Price Index (PPI) and CPI inflation reports later this week for further clues on the Fed's policy path.
The rising bets on a rate hike in September have increased to 58.3%, according to the CME FedWatch tool, from an even chance earlier in Friday's session. Escalating tensions in the Middle East may also contribute to the yellow metal's downside as oil-driven inflation fears increase.