Gold Plunges After Strong US Jobs Data Reignites Rate Hike Fears

Gold prices took a hit on Monday after the US released stronger-than-expected jobs data. The report, which showed 162,000 new jobs in August and an unchanged unemployment rate of 4.1%, sparked concerns that the Federal Reserve could raise interest rates this month.

The strong payroll numbers reduced worries about tighter monetary policy causing labor market damage. July's payrolls were revised to a 21,000 increase from a previously reported decline, while June was also revised higher.

This leaves the Fed with more room to focus on inflation. Futures markets had assigned a roughly 58% probability of a rate hike at the September 15-16 meeting before the jobs report. Higher rates typically weigh on gold as it generates no income.