Gold Falls from June High as USD Firms Up on Disappointing Jobs Report

Gold prices retreated from their highest level since June 17 on Friday, as the US Dollar firmed up following the disappointing release of the July Nonfarm Payrolls report. The report showed that the US economy unexpectedly lost 23K jobs in July, while the previous month's reading was revised down to 20K from 57K.

This unexpected drop in employment figures weighed heavily on the US Dollar, which initially weakened after the report. However, uncertainties surrounding the Middle East crisis and the reopening of the Strait of Hormuz offered some support to the safe-haven Greenback, exerting pressure on gold.

The geopolitical risk premium remains in play due to Iran's conditions for a full reopening of the critical waterway, including an end to the US naval blockade, removal of sanctions, and compensation for war damage. Tehran has also ruled out direct talks with the US, citing alleged violations of the interim peace agreement reached in June.

Meanwhile, the ongoing US-Iran standoff is supporting crude oil prices, which could rekindle inflationary pressures and force major central banks to adopt a more hawkish stance. The CME Group's FedWatch Tool indicates that traders are still pricing in a greater chance of a rate hike by the year-end.