Gold Plunges as Strong Jobs Data Revives Rate Hike Fears

Gold prices fell by 0.5% to $4,405.47 an ounce in early Asian trading on Monday after a strong US jobs report released Friday revived expectations that the Federal Reserve could raise interest rates this month.

The August payroll data showed employers added 162,000 jobs, exceeding market expectations and marking a significant improvement from subdued hiring seen earlier in the summer.

While unemployment held steady at 4.1%, the jobs report reduced concerns about tighter monetary policy causing serious damage to the labour market.

With more room to focus on inflation, futures markets assigned a 58% probability to a rate increase at the September 15-16 meeting, which would be bad news for gold as higher rates are typically a headwind for bullion.